heartland bank


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Unusual activity spotted in Heartland Bank Ltd

Heartland Bank Limited’s PPOH level is currently below zero meaning that energetic or technical traders might be very carefully monitoring the indicator to see if the posture is pointing to the stock as a sell.

Heartland Bank Limited has a current ROA of 1.60. This is a profitability ratio that measures net income generated from total company assets during a given period. This ratio reveals how quick a company can turn it’s assets into profits. 

A higher ROA compared to similar companies in the same industry, would suggest that company management is able to effectively generate profits from their assets. Similar to the other ratios, a lower number might raise a cause for concern.

Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. Heartland Bank Limited (HBL.NZ) currently has Return on Equity of 11.43.

ROE is a ratio that measures profits generated from the investments received from shareholders. Heartland Bank has a high ROE, which typically reflects well on management and that the company is running well at a high level. 

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Heartland Bank 2017 annual report released

Heartland Bank has released its 2017 annual review displaying a strong result for the bank across the board, and in motor vehicle finance.

Heartland’s net profit after tax is up 12 per cent on 2016. The bank says that their focus on niche products, coupled with distribution channels that extend customer reach, has delivered the healthy financial result.

The bank also saw growth of 14 per cent across all service divisions, and an increase in retail deposits of 13 per cent. Total shareholder return totalled 60.9 per cent.

Net operating income from the bank’s consumer division which includes motor vehicle loans, increased $1.9m, up 3 per cent from 2016 to $57.2m. Despite this, lower earning rates on motor vehicle and personal loans meant this increase was not reflected in net operating incomes.

Motor vehicle net receivables grew strongly, increasing by $72.0m, up 10 per cent to $824.3m during 2017.

Darryl Harnett is head of Heartland’s consumer division, and says that his bank’s approach is to make motor vehicle finance easy.

“We’re helping to get Kiwi families on the road. We have a significant nationwide distribution network of dealers and partners who help us to be in the right place at the right time to ultimately reach more Kiwis.”

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Heartland bank posts profit

Heartland Bank Limited (NZX: HBL) has achieved a net profit after tax (NPAT) of $60.8 million for the full year, ending June 30, 2017 (FY2017).

This is an increase of 12 per cent from the previous financial year, which ended June 30, 2016 (FY2016).

According to a statement, the increase in profitability was driven primarily by growth in receivables across all divisions. These included the household, business and rural sector. 

During this time, household net receivables increased by $227.8 million with reverse mortgages, motor vehicles loans and personal loans (including Harmoney) increasing by $126.1 million, $72 million and $40 million respectively. Meanwhile, business and rural divisions’ net receivables increased by $96.2 million and $123.0 million.

Throughout the year Heartland acquired a 25 per cent shareholding in Fuelled Limited, an online small-to-medium business (SME) lender.

Alongside this equity investment, a $2.0 million committed debt facility was provided to enable Fuelled to accelerate its Australasian growth plans.

Fuelled is a New Zealand-based business whose simple on-demand service enables SMEs to receive an immediate cash advance on their outstanding invoices.

Fuelled’s integration with Xero enables its advanced credit assessment engine to make real time credit and financing decisions online.

The directors of Heartland have resolved to pay a final dividend of 5.5 cents per share. The final dividend will be paid on 21 September 2017 to shareholders on the company’s register as at 5.00pm on 7 September 2017 and will be fully imputed. The Dividend Reinvestment Plan (DRP) will apply to the final dividend with a 2.5 per cent discount .

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Profit jumps at Heartland Bank

Heartland Bank has released its disclosure statement for the nine months ending March 31, 2017.

Unaudited net profit after tax was $44.9 million for the period, an increase of 13 per cent on the nine months ending March 2016.

Heartland said the rise in profit was driven by a growth across its household, business and rural divisions. Net finance receivables grew $340.8 million, or 10.9 per cent, over the period, which led to a seven per cent increase in net operating income.

The cost-to-income ratio was 42 per cent for the nine-month period, compared to 47 per cent in the corresponding nine months ending March 2016. Heartland said this showed the benefit of the scale of economies the bank achieved from recent growth.

This latest announcement hasn’t changed profit forecasts for the year ending June 2017, and Heartland expect it to be at the upper end of $57 million to $60 million.

Shares rose 1.7 per cent immediately following the news, with the price sitting at $1.77. The stock has risen 55 per cent in the past year.

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Half-yearly profits up for Heartland

Jeff Greenslade, managing director of Heartland New Zealand Ltd.

Jeff Greenslade, CEO of Heartland NZ

Heartland Bank’s profit rose 14 per cent to $29.1 million according to the company’s latest interim report published this afternoon.

The increase in profit was driven by strong growth across the household, business and rural divisions of the bank. Net finance receivables grew $221 million, or seven per cent, in the six months ending December 2016, which in turn resulted in a seven per cent growth of net operating income, valued at $5.3 million.

Earnings for the half-yearly period delivered an annualised return on equity of 11.6 per cent, which is 0.5 per cent high than the previous financial year.

The increased returns means the Heartland Board has declared an interim dividend of 3.5 cents per share. In total, share prices have risen 40 per cent in the last 12 months to $1.61.

Operating costs were down $1.1 million to $36 million, reflecting a five per cent drop in cost-to-income ratio to 43 per cent when compared to the previous corresponding period.

Higher write-offs in the motor-vehicle loan books and a growth in personal and motor-vehicle loans saw a $1.3 million increase in impaired asset expenses, up to $6.9 million for the half-year.

Funding and liquidity remains strong, with retail deposits growing $229.8 million to $2.5 billion in the first half of the 2017 tax year.

Heartland’s household division, which includes motor-vehicle loans, personal loans (including funds lent through the Harmoney platform), reverse and residential mortgages, performed strongly in the six months ending December 2016. Net operating income rose 7 per cent compared to the previous period.

Net motor-vehicle loan receivables continued to grow, up four percent to $794.5 million. Heartland remained optimistic about the growing motor-vehicle loan market in the report.

Meanwhile, net operating income for the business division grew nine percent, with net receivables increasing five per cent to $947.5 million during the six-monthly period.

The Open for Business platform saw particularly healthy results, up 142 per cent to $27.3 million.

The rural division alsoa saw an increase in net operating income, up six per cent from the previous corresponding period. Net receivables grew 12 per cent to $616.8 million, with growth attributed to term loans to existing and new customers across the sector.

The bank expects end-of-year net profit after tax to be at the upper end of their previous forecast of $57 to $60 million. The current financial year ends on June 30.

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Heartland profits increase

Heartland Bank reported an after-tax net profit of $29.1 million for the six months ending December 31, a 14 per cent increase from the previous corresponding period. The increase of motor-vehicle loans resulted in a rise in net receivables, but relatively low income growth in the vehicle finance market.

One of the major movements was in household net receivables, which increased $106.1 million. Reverse mortgages increased $57.1 million, motor-vehicle loans $27.1 million and personal loans $29.9 million.

Despite the growth in household net receivables, particularly consumer receivables, net operating income only increased one per cent over the reported period. This is mostly due to lower earning rates on motor-vehicle and personal loans.

Heartland remained optimistic about continued growth of motor-vehicle loans, citing a lower costs and a competitive advantage over non-bank lenders in the vehicle finance market.

The bank noted higher levels of early repayments for motor-vehicle loans, which helped drive the net interest margin down to 4.4 per cent.

Impairment expenses, or diminishing asset values, in the household division has increased $2.2 million compared to the corresponding period. Heartland attributed this growth to higher write-offs in motor-vehicle loans, and a growth in personal and motor-vehicle loans. Impairments remain acceptable for motor-vehicle loans at 0.7 per cent.

An interim dividend of 3.5 cents per share has been set by the directors, and will be paid on April 7.

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