Liberty plays down jump in distressed loans
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4/11/2009 9:00:00 AM
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Accounts filed with ASIC show that loans 91 days past their due date have jumped from $43m to $253m at specialist lender Liberty Financial
As a result Liberty has raised its provisions for defaults from $19m to $60m, the AFR reported.
Despite this tripling in provisions, managing director Sherman Ma said it was not necessarily a sign that the lender was expecting a blowout in arrears.
He said Liberty held $42m 'collateral value' for the purpose of recovering impaired loans, but said the shortfall between this and provisions was not a concern.
"We are working with clients in a more involved basis where hardship is experienced and someone may have lost a job," Ma said.
He said a drop in demand for residential loans had been offset by demand for Liberty's other products, which include car loans, debtor finance and commercial loans.
Liberty posted a 4% drop in net profit to $35m for the year to June. Its loan book stands at $2.5bn, compared with a portfolio worth $3.2bn a year ago, a drop of 23%..
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