Geneva posts profits jump
Geneva Finance’s pre-tax profit for the first nine months of its current financial year have jumped by 97 per cent.
The total for the nine months up to December 31 came in at $5.9 million, which was an increase of $2.9m over the same period in 2023/24.
Quest Insurance achieved a pre-tax profit of $6.5m for the same period, up by $2.6m and 67 per cent from the September 2024 year-to-date result.
This result was mainly due to increased premium sales and static claim volumes over the period.
Quest’s total year-to-date premiums amounted to $41.7m, up by $7.8m and 22.8 per cent on the prior year, and it maintained strong solvency and solid cash holdings during the period.
Geneva’s lending operations in New Zealand posted a pre-tax loss of $2.3m for an additional $1m – or 76 per cent – loss when compared to September 2024’s result.
“Loan arrears continued to rise in the third quarter and for the full 12 months will likely be at similar levels to the previous financial year,” the company reports.
“The provisioning increase is mainly due to the additional impairment charges taken up against potentially uncollectable loans, based on current and projected arrears.
“While the finance industry is seeing an increase in arrears levels and the economy is showing increases in unemployment, we have moved to do what we can internally to address controllable factors.”
In January, management functions and responsibilities for credit sales and credit approvals were separated in a move to directly address arrears levels.
These roles are now managed under a head of sales, whose role is to drive up lending volumes and new business acquisitions, and a manager of credit, who is tasked with overseeing credit assessment and approvals to ensure all lending meets credit policy standards and to improve the overall loan book’s quality.
Lending volumes compared to last year increased by eight per cent to $44m with $14.5m lent over the last quarter. That compared with $11.4m over the same period in 2023/24. The total net receivable ledger, after provisioning, increased to $107.5m, up $5.2m.
The Tonga lending operations – FPF Tonga – performed well and is experiencing strong lending demand. It reported a pre-tax profit of $1.6m, up $0.3m on last year.
The group’s Westpac funding facility increased to $87.3m, up $2m from September and up $7m last year.
Its Kiwibank facility is being repaid with a further $0.5m repaid during the quarter to bring the total outstanding to $1m. Funding from wholesale investors amounted to $17.1m and was unchanged from the last quarter.
“The group’s overall results continued to improve over last year, but higher loan-book impairment charges and lingering high funding costs remain the main impediments to a much-improved performance for New Zealand lending operations,” says the company in a statement to the USX.
“It is expected that increased impairment provisioning will continue over the fourth quarter and will have an impact on the group’s full-year result.
“The recent and impending OCR interest-rate reductions are expected to positively impact on the group's funding costs, but will have a minimal impact in the current financial period.”
The company continues to refine its management control and reporting systems, which will benefit the company in the 2026 financial year and onwards.
It remains on target to launch, in quarter four, the newly acquired lending onboarding software system Credisense, and Quest’s new core insurance software system called Insured HQ.
Management is also in the process of recommending an upgrade to the company’s general ledger and financial reporting systems.
