UDC Finance's deposits shrank in the latest financial year as the question mark hanging over Australia & New Zealand Banking Group's ownership of the country's biggest finance company saw a reduction in investments by external advisers.
The Auckland-based non-bank deposit taker's debenture funding shrank to $1.59 billion as at September 30 from $1.74b a year earlier, reducing its share of deposits among finance companies to 57 per cent from 61 per cent a year earlier. At the same time, UDC's loan book expanded 9.6 per cent to $2.57b, helping generate a record profit of $58.3 million.
The finance company funded that credit growth by increasing its use of a $1b facility with parent ANZ, drawing down $595m as at September 30 from $280m a year earlier.
ANZ has been reviewing its ownership of the finance company this year, which triggered Standard & Poor's to downgrade UDC's credit rating to A- from AA-. NZX-listed Heartland Bank has indicated an interest in buying UDC, though the Australian Financial Review's Street Talk column last week reported ANZ was likely to announce a sale to China's HNA Group before its annual meeting on Friday.
"UDC remains an attractive and secure place to invest with a S&P rating of A-, but while there's a strategic review being conducted about UDC Finance there has been a decline in investments from external advisors," an ANZ spokesman said in an emailed statement. "Reinvestment from direct investors remains high."
