Geneva's banker is BOS International, a unit of the UK's HBOS, which is about to have the British government as a shareholder. A spokesman for BOS in New Zealand declined to comment and a spokesman in Perth couldn't immediately be reached.

Borrowers on the old ledger had been squeezed by rising food and petrol prices, eating into their disposable incomes and increasing defaults, Geneva said. At the same time the global credit squeeze had driven up costs and reduced availability of funds.

"Over the last six months there has been an unprecedented upheaval in the world and the New Zealand economy," Geneva said in a statement. "These events and the related credit impact have had a significant impact on the collectability of the old ledger."

Geneva is in talks with BOS International, after breaching covenants of its financing facility as at Sept 30. BOS also is involved with the management buyout of Strategic Finance from Allco Hit, which today said that deal has come off the rails and the parties will resume talks.

Excluding the one-time charge, earnings this year would be $1.9 million, Geneva said.

Geneva posted a $7.9 million loss in the 12 months ended March 31, 2008, reflecting the network closure, restructuring costs associated with its moratorium and charges to adopt IFRS accounting.

Geneva has divided its loan book in two, with the new ledger comprising people with better credit records. As at Sept 30, old ledger loans were $43.7 million, or 43% of the total.

The company has a moratorium on some $138 million of deposits.