UDC Finance posts record net profit
08 December 2016
Media Release
UDC Finance has posted a record net profit after tax of $58.5 million for the year to 30 September 2016, a 3% increase on the previous financial year.
A key contributor to the result was strong lending growth across a diverse range of industries, improved credit quality and a focus on containing costs.
Improved lending quality and lower provisions were partly offset by a decline in net interest margin, resulting in revenue being down 1% on the previous year.
Wayne Percival, UDC’s CEO, said: “During 2016 UDC helped customers throughout New Zealand - particularly in the motor vehicles, forestry, transport and construction sectors – take advantage of sustained economic growth and strong business opportunities.
“The housing and infrastructure build across New Zealand, along with record new car sales, created robust demand for our asset financing expertise, and drove the good result for our business.
“Strong competition among banks for quality lending and deposits put pressure on margins. However, that is now stabilising and with good lending growth we are well positioned heading into the new financial year.”
Focus on cost control through efficiencies that improve and streamline the customer experience saw total expenses reduce 2% compared to FY15 and cost-to-income reduce to 26.3%.
While cost productivity remained a priority, UDC continued to invest in its on-line proposition through UDC Live in order to meet customers’ needs.
The quality of customer businesses, coupled with responsible lending, resulted in a 29% reduction in provision expenses (to $7.4 million) and overall credit quality remains high.
“We have the best and most experienced asset finance team in New Zealand, and our focus remains on understanding the needs of our customers and ensure they’re in the best position to take advantage of growth and build long-term resilience and value in their businesses,” Mr Percival said.
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UDC Finance is a wholly owned subsidiary of ANZ Bank New Zealand Limited, and has a Standard & Poor’s* credit rating of A-.*Credit ratings issued by Standard & Poor’s Ratings Services are solely statements of opinion and not statements of fact or recommendation to purchase, hold or sell any securities or make any other investments decisions. Latest ratings can be found at www.standardandpoors.com