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Geneva Finance to write down more loans

Geneva Finance (GFNZ), says its annual results will show an increased level of provisioning in respect of old ledgers.

Monday, June 6th 2011, 8:24PM

by Jenny Ruth

"Geneva board advise that the company is in the process of finalising the 31 March, 2011 annual accounts and completing an in-depth review of the collectability of its old ledgers," the company told NZX late Friday.

In Geneva's latest debenture prospectus dated May 12, managing director David O'Connell says at March 31 this year, its residual balance of its old ledger, described as lending to lower socioeconomic, high-yield, high-risk customers before July 2007, had a gross book value of $36.7 million and a net book value after provisions of $14.9 million.

"This ledger is still yielding cash and is forecast to be collected via the legal process over the next three to five years," O'Connell says.

However, he warns collecting on the ledger remains a key risk because it is a costly exercise, there is a risk these debtors may have further changes in circumstances and be unable to maintain current repayment levels and there is a risk debtors may move overseas or elect to become bankrupt to avoid paying.

GFNZ reported a $0.9 million net loss for the six months ended September 2010, down from the $2.6 million loss in the previous first-half.

« NZF Group posts $4.8m annual lossHeartland faces obstacles to achieve bank status »

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