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UDC Finance CEO sees 'incredibly positive' outlook, continued drop in deposit rates and new competition from BNZ

Business
UDC Finance CEO sees 'incredibly positive' outlook, continued drop in deposit rates and new competition from BNZ

By Gareth Vaughan

UDC Finance, fresh from posting its highest annual profit since 2004, is off to a strong start in its new financial year with CEO Tessa Price saying where UDC goes so does the New Zealand economy.

Price told interest.co.nz in a Double Shot interview that October was UDC's strongest month for new lending since 2000.

"And we've just completed November and it has just continued on," said Price. "So we now have record $100 million months which just again shows the economy's improving. So when we grow it means New Zealand is growing."

The outlook for next year was "incredibly positive" with no visible clouds on the horizon, she added.

"Whether we look at agriculture and forestry, or we look at the transport segment, that's doing very well along with car finance and construction. They're all very active (and) healthy so there's reinvestment, there's roads that are being built and bridges. And obviously the agriculture market's doing well off the back of the dairy payouts. So all segments are doing well and business and consumer confidence is up."

UDC yesterday posted a 13% rise in annual profit to $42.9 million for the year to September 30. Featuring in the annual results was a $7.6 million, or 9%, rise in net interest income to $96.3 million. This was largely driven by a $6.6 million, or 7%, fall in interest expense - which is largely based on the interest paid on the company's debenture stock - to $83.2 million.

Debenture rates, along with bank deposit rates, have trended down this year. Price said this was likely to continue for the next six to 12 months because there was lots of money in the market.

Meanwhile, she said the lending markets UDC competes in are very competitive. In vehicle financing, for example, BNZ had entered the car market and was setting up through car dealers. According to the Motor Industry Association (MIA), new commercial vehicle registrations in November were 2,935, the highest November new commercial registrations since it began collecting records in 1981. MIA says it’s the third straight month in a row for this has happened with new commercial registrations.

"Year to date, there have been more new vehicles sold than for all of 2012 (104,408 year to date 2013 compared to 100,795 for full year 2012)," MIA says.

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1 Comments

Oh dear....no clouds?  buy scuba gear IMHO.

regards

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