Heartland Bank has decided not to proceed with a capital issue or the return of capital before June, focusing instead on acquisition opportunities presented by market volatility.
Chief executive Jeff Greenslade said in a NZX release yesterday that at last year's annual meeting, Heartland advised shareholders of its intention to undertake a regulatory capital issue and obtained shareholder approval to subsequently carry out a return of capital before June 30.
Shareholders were advised circumstances might arise where the return of capital would not proceed.
Since last year's annual meeting, there had been considerable volatility in financial markets, he said.
"Heartland believes this volatility creates greater opportunity for acquisition and wishes to assess opportunities - if any - that arise during this period.''
The bank remained focused on assessing opportunities and would continue to monitor its capital position.
corresponding period.
Craigs Investment Partners broker Chris Timms said the result was better than the expected $38million forecast by Craigs and suggested Heartland was well on track to deliver in the guidance range of $51million to $55million.
The loan book was up 9% to $3billion, driven by household and business lending. The net interest margin for the three months ended March was 4.4%, compared to the sector average of 2.21%. When adjusted for impairments, the net interest margin for the quarter was 4.17% compared to the sector average of 2.1%, as reported in the latest Financial Institutions Performance Survey.
Mr Greenslade said Heartland's sector-leading net interest margin, together with the focus on cost control and the differentiated product offering, had resulted in a continued trend of profit and asset growth.
It demonstrated the successful execution of Heartland's strategy, he said.
