by Paul McBeth
New Zealand Guardian Trust, which stopped writing mortgages last year because of liquidity issues, is planning to resume its lending business in the next month or so.
Deputy managing director Tony Morgan says one of the big institutional investors in its mortgage fund decided last year to shift its money to a different asset class. As a consequence of this decision, Guardian had to use its cash and inflows to redeem the institutional investor's holding.
Now that has been done, the fund has built up its cash position to about nine per cent of the fund and plans to activate mortgage lending again.
Morgan says the break in lending has been a bit disruptive for the business; however it will be business as usual soon.
Guardian will be offering its mortgages through its own branch network as well as through mortgage brokers, he says.
Guardian Trust concentrates on writing mortgages in the business and rural sector as opposed to residential mortgages. Morgan says the firm is primarily focused on security, as opposed to rates, and it only lends up to 55 per cent on a property.
"We want to make sure people get their principal back," he says.
Guardian Trust was rated the top mortgage manager by research house Morningstar in 1999, ahead of Equitable Life and ANZ.