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Hanover's rating reconfirmed

Monday 21st of April 2008

Fitch says Hanover Finance accounts for around 70% of the parent company's assets and 65% of its revenues. It says Hanover Finance has a "solid position in New Zealand's non-bank financial institutions sector," and acknowledges its "relatively small size and exposure to higher-risk property development and investment finance".

"Although Hanover Finance has a healthy appetite for risk, it has incurred only minimal credit losses over an extended period. This can be attributed to good risk controls and a relatively benign credit environment," Fitch says.

The rating agency says Hanover has strong profitability ratios – return on equity (ROE) is in excess of 30% and net interest margins above 5% – which somewhat compensates for the risk associated with property development lending.

Australia is a growing part of its business and now accounts for around 20% of revenue.

Hanover Group chief executive Bruce Gordon welcomed the rating review and said the company's priorities over the past year included "maintenance of a conservative cash position, selected lending on quality assets, and rigorous debt collection and provisioning."

"We remain vigilant in ensuring borrowers meet their loan obligations and outstanding monies are recovered, a point noted by Fitch Ratings in commenting that Hanover Finance demonstrates a level of expertise in minimising losses in this area," Gordon says.

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Latest Comments
FMA outlines its latest expectations for advisers
Paul Flood: The danger is that the 'goalposts' (regarding what is acceptable or unacceptable adviser conduct) may be susceptible to change. Our 'Principles based' legal/regulatory environment lends itself to “prevalence-induced concept change” over time, perhaps not so much in the written laws and Code, as in the interpretation of the prescribed principles.
2 days ago Steve Wright
FMA outlines its latest expectations for advisers
Just a tip, if you use more than six, six letter words in a sentence you lose most Kiwi's. So avoid client/adviser confusion when writing your post or article if you would like it read and understood. Ironically, my last sentence was not likely read.
2 days ago Backstage
FMA outlines its latest expectations for advisers
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4 days ago Jon-Paul Hale
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