Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Heartland lifts third-quarter profit 11%

Heartland lifts third-quarter profit 11%, upbeat on annual guidance

By Rebecca Howard

May 18 (BusinessDesk) - Heartland Bank lifted third-quarter profit 11 percent on continued lending growth and said it expects annual earnings to be at the upper end of its previously advised range of $65 million to $68 million.

The Auckland-based lender generated a profit of $17.5 million in the quarter, taking net profit to $48.6 million in the nine months ended March 31, up from $44.9 million a year earlier.

"While growth has been maintained overall, Heartland's strategy has been to grow those areas which are core to future growth, including motor, reverse mortgages, small business, livestock and personal lending. This has meant a reduced focus on larger business and rural relationship lending which, as a result of some significant repayments, has reduced the net growth in receivables for business and rural," it said.

According to the bank, net finance receivables stood at $3.9 billion as at March 31, versus $3.6 billion as at June 30, which equates to 13 percent annualised growth.

Heartland also said it saw a continued strong net interest margin of 4.49 percent in the three months to March 31, bringing the net interest margin to 4.43 percent for the nine-month period, which is consistent with the half year.

Non-performing loans improved to 1.7 percent of gross receivables as at March 31 compared to 1.8 percent as at June 30.

The bank said that news that the Australian government is extending the Pension Loans Scheme, an income supplement reverse mortgage, is "not expected to have an impact on Heartland's business, with demographics overwhelmingly positive for continued growth in demand."

While the changes increase the eligibility of the scheme, according to Heartland, it remains an income supplement with no ability for a lump sum drawdown.

According to the bank, its Australian business Heartland Seniors Finance provides a full reverse mortgage product with additional features, including the ability to draw on a lump sum. It also includes the option of a Cash Reserve Facility for future needs, something not available in the PLS.

Heartland said the changes may actually "result in increased awareness and greater acceptance of reverse mortgages."

The shares rose 1.2 percent to $1.75 and have dropped 17 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Retail: International Websites To Pay GST

New rules would be aimed at imported goods valued at or below $1,000. Customs would retain responsibility for collecting GST on imported parcels valued more than $1,000. More>>

ALSO:

Improving: Report Shows New Zealand Air Quality 'Good'

Our air 2018, produced by the Ministry for the Environment and Stats NZ, shows that while some previously known issues persist, progress has been made and levels of some pollutants are declining. More>>

ALSO:

Greenpeace: Govt Extends OMV Exploration Permit

The Government has just granted oil giant OMV a two-year extension to drill in the Great South Basin, despite issuing a ban on new oil and gas exploration permits in April. More>>

ALSO:

Collective Bargaining For Contractors: Working Group's Model For Screen Sector

A recommended model to allow collective bargaining for contractors in the screen sector has today been unveiled by the Government-convened Film Industry Working Group. More>>

ALSO:

Kauri Dieback: DOC Closing Tracks To Protect Trees

The Department of Conservation will close 21 tracks across kauri land to help prevent the spread of kauri dieback. An additional 10 tracks will also be partially closed and the open sections upgraded... More>>

Price Of Cheese: Dairy Product Prices Descend

Dairy product prices fell at the Global Dairy Trade auction as whole milk powder slid amid the prospect of increased supply. More>>

ALSO: