S&P upgrades Geneva, but turns negative
Standard & Poor's has increased Geneva Finance's rating three notches, but remains negative on the company.
Tuesday, 29 April 2008
"The proposal will provide more funding certainty in the short term, and will materially strengthen the company's capitalisation," S&P says.
The outlook on the ratings has moved from CreditWatch with developing implications to negative.
S&P acknowledes that Geneva has taken steps to reduce overheads by closing down all but one of its branches and retrenching staff. It has also tightened its credit policy by not extending new loans to higher-risk segments, and by increasing resources on collections activity.
"While the company's immediate prospects have improved, we expect that Geneva will face increasing challenges within the segment that it operates. The New Zealand economic conditions have become more difficult and Geneva's clients will likely face more tightening pressures on their household budgets, which could result in higher credit delinquencies," S&P says.
"The negative outlook reflects our view that over the next two years, economic and operating conditions will become more challenging for the finance sector including Geneva," S&P credit analyst Sharad Jain said. "In addition, the closure of most of Geneva's branches means that it has reverted to being a mainly centralised business.
"This change has resulted in a number of one-off material losses over the past several months. Consequently, a return to profitability has yet to be proven and the company will need to manage its operations, cash position, and banker relationship carefully. The rating could be lowered if credit conditions or financial performance does not improve significantly or if Geneva's banker withdraws its support."
Commenting is closed
Weekly Updates including news and commentary
Today's Best Bank Rates
Today's Top 5 Deposit Rates
Find a Rate
Cash PIE Rates
3 July 2017
21 June 2017
6 June 2017
4 May 2017
10 April 2017
Disclaimer - Every possible effort has been made to keep the information in the tables and on this site as accurate as possible, however, neither the publisher, Tarawera Publishing, nor anyone engaged to compile the rates and this site accept any liability for inaccuracies or any loss suffered as a result. It is strongly advised that readers check loan details with providers. The full terms and conditions of this site can be found here.
© Copyright 1997-2020. Tarawera Publishing Ltd. All Rights Reserved.