Motor Trade Finances, the Dunedin-based car lending cooperative with almost NZ$600 mln of lending, has announced it plans to raise new capital from its shareholders and convert to a conventional shareholder owned company to comply with new IFRS accounting rules and prepare for Reserve Bank regulation. MTF has relied on its New Zealand bank funding lines through an A 1 rated asset backed securitisation programme in the last year because of difficulties in the European Commercial paper market, where MTF previously funded most of its loans. MTF's banks include Bank of New Zealand, ANZ National, Westpac and Commonwealth Bank of New Zealand Australia and at last measure were providing almost NZ$400 million worth of funding for MTF. "MTF continues to trade profitably, in a slowing economy, and will deliver a result in line with expectations and historical performance, for the year ending 30 September 2008," MTF said. "New loans written are marginally behind last year to date, with the reduction reflecting the slow down in vehicle sales, in more recent months. The loan book continues to perform well, with arrears within internal benchmarks, marginally above last year and performing better than expected, as greater pressure comes on households and businesses in the current economic climate," it said. *This report was first published yesterday in our daily Banking and Finance email, which is available for an annual subsription of NZ$365 here. Email me at bernard.hickey@interest.co.nz to set up a one week free trial.
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