Harder times for Aust. Guarantee

Press, 7 May 1980, Page 22

Harder times for Aust. Guarantee

N’ZPA Sydney Australian Guarantee Corporation, Ltd, the finance subsidiary of the Bank of New South Wales, has reported a 7.1 per cent profit increase to sAust27.sM in the six months to March 31. However, the - directors said stagnation in the motor industry, further increases in interest rates, and continuing competition in the finance and insurance markets, will make it difficult for the group to achieve any significant increase in the second half-year. The interim dividend has been raised to 4.375 c, com-| pared with 3.75 c a share last'

year, payable on June 13. . Net receivables rose 15.& per cent to $2460M, aftet 3 gross receivables rose 14.21 per cent to $3130M. Leasing continued to show’ the strongest growth rate, and some, encouraging increases were seen in proper-’ ty loans but motor vehicle y lending did not increase dur’ ing the- six months, the' directors said. Profit growth failed to keep pace with increases in’ receivables, because of higher losses and provisions related to motor vehicles, and intense competition which prevented a full recovery of increased borrowing costs.