1 Comment 1 CommentInstead, BNZ will replace public investment for the purposes of funding the Oxford Finance lending business.
Oxford Finance executive director John Yeoman said the decision to move away from offering debt securities was not taken lightly. He said the company was aware of the large group of loyal investors who had entrusted their investments with the company, some going back 23 years to its origin.
However, he said the reform in the financial services industry in the wake of the global financial crisis has resulted in a significant increase in the level of disclosure and adequacy requirements, including changes to the Non-Bank Deposit Takers regulations.
"While these reforms are a positive thing for investors, it does come at a considerable additional cost to organisations offering debt securities to the public," he said.
"Unfortunately, for small to medium deposit takers, these increased compliance costs can have a significant impact on profitability."
As part of the larger Electra Group - which has assets of more than $269 million - Oxford Finance has been able to secure more favourable lending arrangements.
"Our ownership structure provides the company with access to business opportunities that many similar sized finance companies simply don't have. The opportunity to significantly lower compliance costs and free up capital for further growth opportunities was the right decision to make from a commercial perspective."
"Aside from the change to our funding arrangements, all other business will continue as normal," Yeoman said.
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