Hanover may sell finance business

Mark Hotchin

Finance company Hanover, half-owned by entrepreneur Eric Watson, is mulling over the sale of its Nationwide Finance business.

Hanover chairman and half-owner Mark Hotchin told the Business Herald: "We are just not sure if it is going to fit long term, but no decision has been made."

Hanover received what Hotchin described as a "good offer" for the business six weeks ago but turned it down. The company will discuss the future of Nationwide at its board meeting tomorrow.

Nationwide is a specialist capital and equipment financier with a $200 million loan book. In the year to March, pretax profit rose from $2.75 million to around $5.3 million. This suggests the business could be worth as much as $60 million.

Hanover wants to focus its business in specialist areas where it can earn higher profits by tailoring loans to suit client needs. Nationwide's lending is largely standardised and, therefore, faces more competition.

Hotchin said it was not clear Nationwide business would easily transplant to Australia, where Hanover is trying to expand.

Potential buyers include offshoots from the US conglomerate General Electric, particularly its GE Commercial Finance arm, which has a significant presence in equipment financing here and in Australia. UDC, owned by the ANZ National Bank, may also be interested.

Hanover, including Nationwide, has more than $1 billion of assets and more than 30,000 investors and also operates the Hanover, FAI, Australian Finance Direct, United and United Home Loans finance brands.

It lends to market sectors including property, agriculture, manufacturing, retail tourism, healthcare and consumer finance. It also develops and invests in property.