About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Wednesday, February 26th, 10:19PM
rss
Latest Headlines

Hanover hits standstill

Hanover Finance has put itself into what it calls a "standstill" freezing interest payments and refusing to accept new investments.

Wednesday, July 23rd 2008, 7:54PM

by Philip Macalister

The company has total assets of $550 million and a deposit book of $465 million. Currently it is believed to have around $15 million of cash in the bank.

It is not due to make its next quarterly interest payment to investors until September 30.

Hanover part-owner Mark Hotchin says he is "very disappointed" with this situation. "We are not in a place we thought we would be."

He says Hanover's "standstill" is the result of a number of factors, including a loss of investor confidence in the sector and a weak property market.

This is demonstrated by a number of factors.

Reinvestment rates have fallen to levels of around 20-25%. Hotchin says that is far too low to survive.

He says if rates held up at the 45-50% mark the company could "manage its book pretty comfortably".

He says a year ago it had rates of around 70%.

Hotchin says new investments had plummeted to. Recent rates are around 10% of what they were a year ago. Back then it was getting around $30 million a month in the door – now it is more like $3 million.

The company has capital of about $85 million which means that its capital backing wasn't too poor. The general view is that a ratio of between 10 and 12% is acceptable.

Hotchin says that Hanover had worked hard to find both a wholesale funding line and a shareholder.

These efforts have come to nothing, due partly to the "systematic collapse of the banking sector."

He also points out the ideal situation would be to have had a partner who provided capital and funding.

The company has been exposed to plenty of rumours in months and Hotchin admits these haven't helped the market.

However today's situation is "more about the collapse of (the finance company) sector as a whole."

At the end of the day Hanover's problems are partly a market failure.

Hotchin says you can "fight the market" in these sorts of conditions, but it's very hard to win.

COMMENT: Answering the big Hanover question

Read Hanover statement here

« Regional mortgage managers upbeat despite CMT suspensionSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 3.95 4.15 4.49
ANZ Special - 3.45 3.65 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - 3.49 3.55 3.89
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
Lender Flt 1yr 2yr 3yr
China Construction Bank Special - 3.19 3.19 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.65 4.80 -
HSBC Premier 5.24 3.54 3.20 3.69
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 3.97 4.05 4.39
Kiwibank 5.15 4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Lender Flt 1yr 2yr 3yr
Pepper Money Near Prime 5.64 - 5.44 5.44
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.45 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 3.55 3.89
Sovereign 5.30 3.89 4.05 4.39
Sovereign Special - 3.39 3.55 3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
Lender Flt 1yr 2yr 3yr
TSB Bank 6.09 4.19 4.35 4.69
TSB Special 5.29 3.39 3.55 3.89
Wairarapa Building Society 5.50 3.95 4.05 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.55 3.99
Median 5.34 3.96 4.09 4.39

Last updated: 21 February 2020 4:32pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com