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Heartland Group lifts annual profit 9% on reverse mortage and other lending growth

Heartland Group lifted annual net profit 9 percent amid growth in its reverse mortgages, motor and business lending divisions.

Thursday, August 15th 2019, 12:28PM 1 Comment

by BusinessDesk

Net profit for the 12 months ended June 30 rose to $73.6 million from $67.5 million the previous year.

Lending growth overall rose 10.7 percent, or by 424.8 million, before foreign exchange adjustments with Australian reverse mortgages rising 24 percent, or by $163 million, New Zealand reverse mortgages up 11.4 percent, or by $52 million, and motor lending up 13.3 percent, or by $127.6 million.

Return on equity was unchanged from the 2018 financial year at 11.1 percent but rose from 10.3 percent in the first half to 12.2 percent in the second half.

Net interest margin eased to 4.33 percent from 4.42 percent, reflecting the strong growth in lower margin reverse mortgages.

The company, which includes the New Zealand registered Heartland Bank and its separate Australian reverse mortgage business, says its strategic focus remains on niche markets where it aims to deliver either best or only products to depositors and borrowers.

Heartland will pay a final dividend of 6.5 cents per share, up 1 cent on the previous year’s final dividend, taking the annual payout to 10 cents. The record date is Aug. 23 with payment due on Sept. 6.

The company says it expects continued asset growth this year, particularly in Australian and New Zealand reverse mortgages and small business lending while it continues a managed reduction in business and rural relationship lending.

While business intermediated lending grew 31.4 percent, or by $101.7 million in the year just gone but business relationship receivables fell by 16.1 percent, or $107 million, and rural relationship receivables fell 4.2 percent, or $23.4 million.

Heartland shares are down 1 cent to $1.61 and are up 3 percent from a year ago compared with the benchmark S&P/NZX 50 Index’s 21 percent gain.

Tags: Heartland reverse mortgages

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Comments from our readers

On 20 August 2019 at 1:23 pm Maxwell K said:
A very well run company with a great future.

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 ▼2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.15 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

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