Hanover calls for international credit ratings

Hanover Group says all financial services companies owed it to their investors to confirm they were operating to the highest financial and prudential standards, as evidenced by an international credit rating.

Tuesday, 3 July 2007

"International credit ratings are like an independent scorecard of the financial health of the company. Banks are required to have them – why not finance companies? They give investors the opportunity to make informed choices against global benchmarks. Frankly, we believe investors deserve the confidence, and comfort, these ratings would bring."

While Hanover welcomed the Government's recent moves to make credit ratings mandatory, it believed they had to be international to be meaningful.

Muir stressed that minimum capital adequacy ratios were also essential to ensure that New Zealanders could invest with confidence.

"Financial services companies seeking public funds owe it to their investors to ensure they meet the very highest prudential and governance standards, and that they have the size and scale, balance sheet strength, specialist expertise, capital adequacy and governance, and professional management that are fundamental requisites in this industry."

Muir said Hanover itself was in a very strong financial position, having just closed the financial year with record unaudited pre-tax profits for Hanover Finance and United Finance. Hanover Finance has an international Fitch rating of BB+.

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