Heartland New Zealand reported an improved operating profit
for the year ended June but its reported profit was hit hard
after incorporating charges to take control of distressed
assets previously managed by Pyne Gould Corp.
The operating profit was up 24% at $37 million on improved
revenue of $107.4 million.
The reported profit of $6.9 million, down 71% on the previous
corresponding period, included an increase of $16.9 million
of impaired asset expense. The increase in costs came mainly
in the non-core property division.
Forsyth Barr broker Suzanne Kinnaird said the result was
broadly in line with her expectations.
''The underlying business continues to exhibit improving
trends in net interest income, expense ratio and impairment
Net finance receivables fell by $67.9 million to $2 billion,
driven by a reduction in non-core legacy property and
mortgage assets. Core net finance receivables including
rural, business and motor vehicles, increased by $76.1
Heartland intended paying a final dividend of 2.5 cents per
share to take the total dividend to 6cps for the year.
Heartland managing director Jeff Greenslade said the bank's
performance continued to improve during a period of
significant strategic activity including Heartland achieving
Heartland confirmed its earlier forecast of reported profit
for the June 2014 financial year of between $34 million and
The expectations for the next financial year reflected
ongoing reductions in the cost of funds, lower impairments,
continued focus on cost reductions and asset growth in core
assets, in line with credit growth expectations, he said.