Demand for financing up: Credit Corp

THE Credit Corp Ltd (CCL) is experiencing increased demand for finance flowing from minerals developments and spin-off businesses related to the liquefied natural gas project.
In particular, heavy equipment leasing has grown the loan book and increased margins, according to a BSP Capital Ltd (BSPCL) research released yesterday.
“We expect the growth to continue for at least the next three to five years,” BSPCL said.
“Finance companies like Credit Corp benefit from lending non-traditional banking areas such as leasing. 
“The value of property portfolio increased by K46.0 million as part of the regular three-year evaluation,” BSPCL said.
There is sustained growth in the CCL total assets to K811.36 million, up 4% from K779.74 million last year.
The sum of K58.54 million was booked against the profit-and-loss account due to the increase in the value of BSP shares from  85  toea to 99  toea by  the end of last year.
Credit Corp Ltd owns 414,380 932 BSP shares representing 9.09 % of the BSP shares.
Meanwhile, BSPCL has released its profit forecasts for this year and next year for BSP.
The company believes that this year’s profits will reach K280 million and 2011 profits will improve to K360 million.
On that basis, BSPCL contends that BSP’s share price should be valued around K1 within 18 months.
Profits for the investing financial institutions should increase sharply in that time barring any unforeseen shocks.
“We believe BSP can better our forecasts but we remain cautious until the half-year’s results are released.
CCL has equity interests in the BSP (9.09%), City Pharmacy (1.27%) and Airlines PNG Ltd (0.9%).
“The dividends paid by Credit Corp depend on the dividends paid to it from its investments and subsidiaries,” BSPCL  said.