New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

Heartland Group Holdings / Equity Bottom-Up

<ul><li>Heartland Group (HGH) provided a solid 1Q26 update, slightly ahead of our expectations.</li><li>Quarterly NPAT was ~28% of the bottom end of its reiterated FY26 guidance.</li><li>There was a lot for investors to like in the update: opex in NZ appears under control; reverse mortgages in Australia and NZ continued to grow well; and it is making real progress on reducing its non-strategic assets, which could've proved troublesome.</li></ul>

Heartland Group (HGH) provided a solid 1Q26 update, slightly ahead of our expectations.Quarterly NPAT was ~28% of the bottom end of its reiterated FY26 guidance.There was a lot for investors to like in the update: opex in NZ appears under control; reverse mortgages in Australia and NZ continued to grow well; and it is making real progress on reducing its non-strategic assets, which could've proved troublesome.

Heartland Group 1Q26—A Solid Quarter In The Bank

<ul><li>The Reserve Bank of New Zealand’s (RBNZ) proposed changes to its capital settings for banks should be positive for Heartland Group’s (HGH) NZ bank.</li><li>We anticipate HGH will benefit from a lower required minimum tier 1 capital ratio and lower risk weights on a segment of its lending.</li><li>These changes would increase HGH’s buffer to its minimum capital requirements, reducing the risk of an equity raise should impairments rise, and increasing HGH’s competitive position versus non-bank lenders in its niche lending segments.</li></ul>

The Reserve Bank of New Zealand’s (RBNZ) proposed changes to its capital settings for banks should be positive for Heartland Group’s (HGH) NZ bank.We anticipate HGH will benefit from a lower required minimum tier 1 capital ratio and lower risk weights on a segment of its lending.These changes would increase HGH’s buffer to its minimum capital requirements, reducing the risk of an equity raise should impairments rise, and increasing HGH’s competitive position versus non-bank lenders in its niche lending segments.

<ul><li>Heartland Group (HGH) delivered a soft but in-line FY25 result.</li><li>Guidance for FY26 (NPAT &gt;NZ$85m) was marginally ahead of our prior expectations.</li><li>HGH’s new-originations momentum is strong despite a competitive market.</li></ul>

Heartland Group (HGH) delivered a soft but in-line FY25 result.Guidance for FY26 (NPAT &gt;NZ$85m) was marginally ahead of our prior expectations.HGH’s new-originations momentum is strong despite a competitive market.

Heartland Group FY25 Result—Accelerating In Reverse

<ul><li>We view Heartland Group (HGH) in two parts; firstly an attractive, high returning reverse mortgage book, worth a premium to net tangible assets (NTA), and secondly a combination of other lending that generates lower returns on equity and worth a discount to NTA.</li><li>A re-rating would likely require: (1) HGH allocating more capital to reverse mortgages, and ensuring excess returns in that segment hold.</li><li>We expect HGH to be able to meet the RBNZ's 2028 increased capital requirements, but the margin for error is low if profitability recovers slower and HGH's additional 2% capital requirement is not removed.</li></ul>

We view Heartland Group (HGH) in two parts; firstly an attractive, high returning reverse mortgage book, worth a premium to net tangible assets (NTA), and secondly a combination of other lending that generates lower returns on equity and worth a discount to NTA.A re-rating would likely require: (1) HGH allocating more capital to reverse mortgages, and ensuring excess returns in that segment hold.We expect HGH to be able to meet the RBNZ's 2028 increased capital requirements, but the margin for error is low if profitability recovers slower and HGH's additional 2% capital requirement is not removed.

Heartland Group Banking On Reverse Mortgages

<ul><li>Heartland Group (HGH) reiterates FY25 guidance with &gt;NZ$45m in underlying NPAT, maintaining focus on lending quality and portfolio rationalisation.</li><li>Economic conditions in NZ pressure business lending, with non-performing loans rising +5% to NZ$91m in 3Q25; 4Q25 impairments are key to achieving FY25 guidance.</li><li>Neutral stance retained with high economic uncertainty and 12-month forward PE at a modest discount to history.</li></ul>

Heartland Group (HGH) reiterates FY25 guidance with &gt;NZ$45m in underlying NPAT, maintaining focus on lending quality and portfolio rationalisation.Economic conditions in NZ pressure business lending, with non-performing loans rising +5% to NZ$91m in 3Q25; 4Q25 impairments are key to achieving FY25 guidance.Neutral stance retained with high economic uncertainty and 12-month forward PE at a modest discount to history.

Heartland Group - 3Q25 Update: Not Out of the Woods Yet

New Zealand

Heartland Group Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides banking services which includes savings and deposits, mortgage, business loans, consumer financing, and Internet banking services. Heartland Group Holdings serves clients in New Zealand.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Heartland Group Holdings (HGH NZ)

Heartland Group 1Q26—A Solid Quarter In The Bank

Heartland Group (HGH) provided a solid 1Q26 update, slightly ahead of our expectations. Quarterly NPAT was ~28% of the bottom end of its reiterated...

Forsyth Barr

Heartland Group RBNZ Lends a Hand

The Reserve Bank of New Zealand’s (RBNZ) proposed changes to its capital settings for banks should be positive for Heartland Group’s (HGH) NZ bank.

Forsyth Barr

Heartland Group FY25 Result—Accelerating In Reverse

Heartland Group (HGH) delivered a soft but in-line FY25 result.Guidance for FY26 (NPAT >NZ$85m) was marginally ahead of our prior expectations.

Forsyth Barr

Heartland Group Banking On Reverse Mortgages

A re-rating would likely require: (1) HGH allocating more capital to reverse mortgages, and ensuring excess returns in that segment hold.

Forsyth Barr

Heartland Group - 3Q25 Update: Not Out of the Woods Yet

Heartland Group (HGH) reiterates FY25 guidance with >NZ$45m in underlying NPAT, maintaining focus on lending quality and portfolio rationalisation.

Forsyth Barr

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)