The ANZ Bank-owned UDC Finance says an 18 per cent increase in lending on motor vehicles helped it lift annual net profit 6 per cent.

The finance company's net profit for the year ended September 30 was $65.3 million and that overall lending rose 11 per cent, or $311m, to $3.22 billion.

Motor vehicle lending accounted for $217m of the growth while commercial lending grew by $50m, or 4 per cent and equipment dealer lending rose $12m, or 6 per cent.

"This is another strong result for UDC and reflects loan growth across the wide range of industries we work will as well as attention to credit quality and careful cost management," says UDC chief executive Wayne Percival in a statement.


However, costs grew 7 per cent, mainly due to the cost of assessing "the future strategic options for UDC, including a potential initial public offering."

At the end of October, ANZ announced UDC was no longer for sale.

It was a long time on the block for UDC with ANZ first confirming it was for sale in April 2016, about six months after it sold its Australia-based finance company, Esanda Dealer Finance.

The idea of floating the finance company emerged after ANZ's plan to sell the business to China-based HNA Group for $660m was blocked by the Overseas Investment Office in December 2017 because it said it couldn't work out who owned HNA.

Percival says the results reflect the strength of the economy, even though growth has slowed in the automotive sector and business confidence has deteriorated.

Earlier this month, the Motor Industry Association reported a 1.4 per cent increase in new vehicle registrations in the 11 months ended November.

However, the nation's largest seller of used cars, Turners Automotive Group, said it had a dreadful October, blaming that on the rising cost of living, particularly petrol prices.

Petrol prices peaked in October – the price of 91 octane peaked at $2.489 a litre on October 5, but has since dropped below $2 in parts of Auckland.

Percival says in the coming year, UDC will have a strong focus on "the high-demand road transport and construction sectors, particularly in the Auckland market."

UDC's charges against profit for bad debts rose by $5m to $10.9m, although that's still at historically low levels.

"We have the best and most experienced asset finance team in New Zealand and our focus remains on understanding the needs of our customers and (to) ensure they're in the best position to take advantage of growth and build long-term resilience and value in their businesses," Percival says.