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UDC boosts profit 11pc ahead of sale

NZ Newswire logoNZ Newswire 6/06/2017 Sophie Boot

ANZ Bank's UDC Finance unit lifted first-half profit 11 per cent as it prepares for its sale to China's HNA Group.

Net profit rose to $30.2 million in the six months to March 31, from $27.3m a year earlier.

Revenue was flat at $60.4m, and the company said the profit growth was "driven by low provision charges and lending growth across a range of industries".

ANZ announced the planned sale of UDC in January.

The deal is subject to various approvals and is expected to be completed late in the second half of the year, and will deliver a net gain to ANZ of A$100m.

The sale price was $235m above UDC's net assets, or a price-to-book ratio of 1.6 times, at the point it was announced.

UDC's loan book expanded to $2.73 billion as of March 31 from $2.48b a year earlier. Bad debt provisions dropped 61 per cent, the company said.

"We're well positioned as we move into a new period of HNA Group ownership, which will bring more growth and investment to UDC," chief executive Wayne Percival said.

"UDC is experiencing growth in lending to vital sectors including transportation, construction and forestry."

Hainan, China-based HNA, which evolved from a regional airline to a global conglomerate with more than US$90b of assets, plans to preserve UDC's existing operations, keeping all staff and customers, it has said.

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