New Zealand's third largest financial services group with assets of over $1 billion, Hanover Finance Ltd, today suspended repayment of its deposits.
"Against a backdrop of global credit uncertainties, falling property prices and lower reinvestment rates, the industry model has collapsed," said Mark Hotchin, joint owner of the company with Eric Watson.
About half the 49 companies finance companies operating in New Zealand 18 months ago have either collapsed or been unable to repay deposits on maturity and analysts have predicted the $18 billion sector will shrink to about 20 companies.
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