Dom Finance secures $90m bank lines

Dominion Finance Holdings has secured $90 million in bank lines, even though it says incoming investment funds continue to exceed that of the same period last year.

Dominion announced today the bank 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).

Dominion Finance Holdings' chief executive Terry Butler said it was important to ensure that both operating companies were not totally reliant on money raised from private investors through the issue of debenture stock.

"Although I am happy to report the current inflow of investment funds continues to exceed that of the same period last year and this reflects the investor confidence in the group and its subsidiaries," he said.

In light of recent failures by two 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.

Neither DFG nor NSF operated in the vehicle finance area, and Dominion operated under the strict requirements of continuous disclosure required by the New Zealand stock exchange.

Dominion would also support and encourage any initiatives for an acceptable credit rating measurement system for the non-bank finance sector in New Zealand, Mr Butler said.

It was essential such a system was mandatory for all companies issuing debt securities, based specifically on New Zealand investments, and would need to be easily understood and not confusing to the investing public.

"There is no doubt that investors need to be vigilant in determining which finance company they should support, but in my opinion the majority of the major finance companies are under good management," Mr Butler said.

For the year to March 31, Dominion reported profit up 17.2 per cent to $8.96 million, with total revenue for the year up 23.5 per cent to $30.6 million.

In contrast, Provincial Finance was placed in receivership last month owing 14,000 debenture stock holders $324 million. National Finance 2000 went under in May owing investors $25.5 million.

On Friday Tauranga-based Western Bay Finance Ltd said it had been searching for alternatives to receivership for a month.

It was selling assets to try to repay $48 million debenture stock principal to about 3000 investors.

Western Bay stopped making loans last month after its supply of debenture stock funding dried up.

- NZPA