Motor division eyes growth
Heartland Group has reported net profit after tax (NPAT) of $48.7 million for the six-months to the end of December 31, 2022, which was an increase of $1.1m, or 2.4 per cent, from the same period a year earlier.
The financial services company adds that on an underlying basis, NPAT for the first half was $54.7m, up $7.6m and 16.2 per cent.
“Overall credit quality remains good, benefiting from Heartland’s continued move towards higher quality and lower risk assets,” the company notes.
Jeff Greenslade, pictured, chief executive officer, says the result shows the resilience of its product portfolios despite economic challenges on both sides of the Tasman.
Net operating income for its motor finance division came in at $32.7m for the six-month period, which was down 9.9 per cent.
At the same time, receivables increased by $75.9m, or 10.9 per cent, to $1.46 billion as early repayments slowed.
Heartland notes the percentage of the motor book in arrears increased from 3.17 per cent at June 30, 2022, to 3.99 per cent at October 31, 2022.
“However, this has since moderated with the percentage of the motor book arrears falling to 3.73 per cent by December 31, 2022, reflecting the return to pre-Covid-19 levels of arrears at this point in the financial year for the portfolio,” adds Heartland.
“The subsequent seasonal increase in January 2023 was at a similar level to January 2022.”
Lending to “new generation vehicles” has increased to now account for 14 per cent of all vehicle loans in the half year and the company launched a green vehicle lending rate in December.
It says ongoing development and enhancements to the motor digital platforms are expected to contribute to improved efficiency, customer experience and growth for the portfolio in the second half of the 2023 financial year.
For the group as a whole, Greenslade says: “It is currently anticipated that 2H2023 will deliver a similar result to 1H2023 on an underlying basis. In particular, continued growth is expected in motor and asset finance.”
