BNZ Finance poised to grow
Profit increases for BNZ Finance will require asset growth, says the chairman, Mr Rob Campbell, in the company’s annual report. The company, 77 per cent-owned by the Bank of New Zealand, was strong financially, with conservative gearing, high liquidity, and good trading profitability, he said. The company also had a sound base for expansion when the economy improved. “Should the market continue to exhibit the many negative characteristics of the last year then a demonstrated ability to trade profitably in tough conditions justifies confidence in the company’s future.” The directors were conscious of maintaining adequate liquidity and matching the maturities of assets and liabilities, he said. Total assets at March 31 were $1,229 billion, of which $485 million were in assets comprising of securities issued or guaranteed by the Government, registered bank negotiable securities, and short-term deposits. A further S2OIM was securities held by BNZ Finance, collateralised by registered
bank securities, letters of credit, or guarantees. Excluding producer board and State-owned enterprise securities, the company had a balance of S47IM in loans and advances, mainly to commercial and personal customers. This area “is clearly the area of genuine credit risk for the company and is the source of the baddebt write-offs and increased specific provisions” during the last year. Although the writeoffs and provisions were higher than budgeted more normal provisions were expected in the current financial year. During the year under view, the general provision for financial financing losses had been maintained at $10.5M and specific bad debt provision increased from $2.310M to $8.698M. In spite of a nervous investment market caused by the collapse of highprofile publicly-listed companies and smaller finance companies, BNZ Finance still retained strong depositor support for its call accounts and retail term debentures. Outstanding debenture stock rose 7.7 per cent to $1.0068.
BNZ Finance poised to grow
Press, 29 May 1989, Page 12
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