by Paul McBeth
Chairman Gary Paykel told shareholders at the annual meeting the finance unit "stuck to its knitting" by concentrating almost exclusively on point-of-sale consumer credit, and had managed to lift its operating revenue as interest rates came down in a tight credit environment.
Still, the credit crunch didn't leave the finance company unscathed, with F&P Finance needing to write down more bad debt and boost its level of provisioning against rising levels of delinquencies.
The unit "operated in a niche market in which it has sound industry knowledge, an established track record, and unique skills and competencies," Paykel said.
Chief executive John Bongard said the expiry of the government's retail guarantee deposit "will likely have an impact on the level of funding" and that there were still uncertainties as to whether it will end in October next year, or be extended under new terms.
"We shall position our retail investment funding to maximise this opportunity once we are aware of how the current scheme is changed," he said.
The Reserve Bank's soon-to-be-announced requirements for non-bank deposit takers will force the unit to boost its capital, acquire a credit rating, appoint independent directors and meet new reporting requirements. Still, Bongard said the finance company is well-placed to meet these extra burdens.
F&P Finance recently introduced new fraud detection software to help reduce bad debts, but still expects ongoing defaults while the economy remains in a downturn, he said.
Paul is a staff writer for Good Returns based in Wellington.
| « General Finance improves quality of its loan book | Westpac warns of waning rates » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved