Pyne Gould Corporation has lifted its profit forecast by 5% to $22 million for the year ending June, despite being hit by a higher than expected number of bad debts.
The South Island-based lender and fund manager says its recent $70 million purchase of GMAC's vehicle loan book is already paying off.
Pyne Gould says its operating earnings have been boosted by $17 million, thanks to a strong performance of the vehicle loan business of its finance arm, Marac.
The business has also benefited from a strategic alliance with the New Zealand Automobile Association.
Pyne Gould says its wealth management business Perpetual Asset Management and its investment fund Torchlight Investment Group have also also performed strongly.
However, the company says it has set aside $17.5 million to cover bad debts, which is more than it expected.
Pyne Gould says most of these bad debts are in property assets, and it is exiting that market in order to improve its earnings and loan book.
The impairments include the writedown of a $2.5 millon unauthorised loan made by a former staff member, discovered earlier this year.
Pyne Gould's full year results are released on Thursday.
