Haley Van Leeuwen.
Listed bank Heartland New Zealand produced a solid result
in line with guidance with the real catalyst being the recently
announced acquisitions, Forsyth Barr broker Haley Van Leeuwen
Heartland said it was on the lookout for more acquisitions.
The company reported an operating profit of $26.7 million for
the six months ended December, up 32% on the $20.2 million
reported in the previous corresponding period.
An interim dividend of 2.5c a share will be paid.
The reported profit of $16.7 million was a 56% increase on
the $10.7 million reported in the pcp.
Operating income of $59.1 million in the period was up more
than 13% on the pcp.
Mrs Van Leeuwen said the operating income was in line with
Interest income fell 3%, reflecting a reduction in finance
receivables from $2 billion to $1.9 billion over the
Non-core residential mortgages and property assets fell by
$104.5 million while the motor vehicle book increased by
However, Mrs Van Leeuwen said the purchase of Seniors Money
International's Australian home equity release mortgage
businesses was a catalyst of growth.
Heartland would pay $87 million and under the agreement,
would acquire the Sentinel New Zealand and Australian Seniors
finance businesses, including their respective mortgage
portfolios with an aggregate asset value of about $760
Heartland managing director Jeff Greenslade said the bank
believed the timing was right for home equity release
products and was confident it would offer strong and
sustainable growth potential in the future.
Significant progress was achieved in running down the legacy
non-core property book and, as a result of the measures taken
in the past financial year, those assets had no impact on the
earnings in the current reporting period.
Operating costs of $32.4 million for the period were an
increase of $500,000 from the pcp.
The higher costs were due to expenses arising from
The operating expense ratio of 55%, compared with 62% in the
pcp, reflected higher operating income, he said.
Net operating income increased in Heartland's business, rural
and retail and consumer divisions during the period.
Mr Greenslade said Heartland expected asset growth to remain
challenging given increased competition in the business and
But growth in households through both motor vehicle and home
equity release products looked strong.