Heartland shares gain as 9-mth profit rises 13%

Wednesday 17 May 2017 11:56 AM

Heartland shares gain as 9-mth profit rises 13%, annual guidance affirmed

By Paul McBeth

May 17 (BusinessDesk) - Heartland Bank shares rose 2.3 percent after the NZX-listed lender said profit rose 13 percent in the first nine months of its year on an expanding loan book and affirmed guidance for annual earnings growth.

Net profit rose to $44.9 million, or 9 cents per share, in the nine months ended March 31 from $39.6 million, or 8 cents, a year earlier, the Auckland-based bank said in a statement. Net interest income rose 10 percent to $119.5 million as the bank's loans grew 11 percent to $3.45 billion from a year earlier. Deposits climbed 18 percent to $2.57 billion from a year earlier.

"The result was driven by growth in receivables across all divisions – Household, Business and Rural," chief executive Jeff Greenslade said in a statement. "The cost to income ratio was 42 percent for the reporting period compared to 47 percent in the previous corresponding period, showing the benefit of scale of economies achieved from growth."

Heartland operates much wider net interest margins than its larger Australian-owned rivals by limiting its exposure to the residential mortgage market and instead focuses on more profitable lines of business such as auto loans and rural lending.

The shares rose 4 cents to $1.78, near a record high set last week when the big four Australian banks came under pressure with the prospect of a federal government-imposed deposit levy across the Tasman squeezing their margins.

(BusinessDesk)

ends

© Scoop Media