New role for Dominion Finance chief

The chief executive of Dominion Finance is to switch hats to deputy chairman to seek expansion opportunities while the industry consolidates.

Terry Butler said his new role would encompass strategic planning and merger and acquisition opportunities.

"The directors expect there will be continuing change in the non-bank finance sector with increased reporting and new securities regulations as well as the implementation of International Financial Reporting Standards early next year," he said.

"This will create further opportunities for Dominion Finance as some finance companies seek to exit the industry."

National Finance 2000 went into a very public receivership in May after failing to meet asset-to-debt ratios.

It was the first major finance company to collapse in recent years, raising concerns of wider problems in a sector weighed down by debt following several years of strong economic growth.

Accounting firm KPMG has also warned a shake-out in the finance lending industry was pending.

KPMG said the slowing economy and slowing property market was likely to lead to loan defaults, with new entrants -- some operating on margins of less than 4 per cent -- at the greatest risk in an economic downturn.

Chairman Rick Bettle said the new role would allow Mr Butler to focus on opportunities.

Dominion last month said it had secured $90 million in bank lines, even though incoming investment funds continued to exceed that of the same period last year.

The lines -- from The Bank of Scotland International (Australia) and ASB Bank -- were negotiated by its operating subsidiaries Dominion Finance Group (DFG) and North South Finance (NSF).

He said in light of recent failures of finance companies operating in consumer motor vehicle finance, the increased level of support from international banks confirmed the high regard in which Dominion and its subsidiaries were held.

In May, Dominion announced a 17.2 per cent increase in profit to $8.96 million for the year to March 31.

Total revenue for the year was up 23.5 per cent to $30.6 million.

Shares in Dominion were up 1c at $1.45 at midday, after trading between $1.06 and $1.50 over the year.

- NZPA