The chief executive of UDC is supporting ANZ’s move to sell its asset finance arm to Chinese conglomerate HNA for $660m after an Auckland finance consultant called the move a backwards step.
Auckland-based finance expert Simon Thompson told the New Zealand Herald that a credit downgrade of UDC’s rating from A minus to BBB with a negative credit watch by the Standard and Poors agency immediately after the sale announcement, would mean higher interest rate costs for UDC customers.
“Secondly HNA has no prior exposure to New Zealand markets and no direct finance experience so there must be concerns about their direction,” Thompson told the New Zealand Herald.
“Their primary interests are in airlines, and they may be more focused on big ticket lending rather than smaller high volume SME loans,” he says.
UDC boss Wayne Percival told the New Zealand Herald that ANZ had wanted for some time to simplify its business and focus on its core banking operations.
He says that the sale of UDC Finance was consistent with that strategy.
“The sale to HNA Group ensures ongoing competition in the asset finance market which can only be good for customers,” says Percival.
“While an existing local player would inevitably look to make efficiencies if it acquired UDC, HNA intends to operate UDC as a going concern,” he says
He says that HNA means to maintain existing lending and is offering jobs to UDC staff.
“We are confident that this is a good outcome for all customers and employees,” says Percival.
