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) reported a solid 1H26 result, providing another proof point that the business is steadily turning around.</li><li>Impairments dropped materially (aided by strong recoveries), non-performing loans stepped down in 2Q26, and the wind-up of the non-strategic asset book is ahead of schedule.</li><li>With reverse mortgages (RM) continuing to perform well, the only notable miss from our perspective was higher opex, which has also weighed on FY26 guidance remaining unchanged.</li></ul>

Heartland Group (HGH) reported a solid 1H26 result, providing another proof point that the business is steadily turning around.Impairments dropped materially (aided by strong recoveries), non-performing loans stepped down in 2Q26, and the wind-up of the non-strategic asset book is ahead of schedule.With reverse mortgages (RM) continuing to perform well, the only notable miss from our perspective was higher opex, which has also weighed on FY26 guidance remaining unchanged.

Heartland Group 1H26 Result—Climbing Out Of The Valley

<ul><li>Heartland Group (HGH) will report its 1H26 result on Thursday 26 February.</li><li>We expect a solid result that shows the business is in a much better position than 12 months ago, with the shift in receivables continuing towards reverse mortgages and away from its underperforming motor and business lending.</li><li>We also see a chance of a modest guidance upgrade. Our key focus areas will be: (1) reverse mortgage growth; we expect both NZ and Australian receivables to be up &gt;+7% versus FY25 on a constant currency basis; (2) a sequential improvement in non-performing loans in Motor and, more importantly, Business lending; and (3) continued opex control; our employee count indications have New Zealand employees up just +2%, with Australian employees +15% since its FY25 result.</li></ul>

Heartland Group (HGH) will report its 1H26 result on Thursday 26 February.We expect a solid result that shows the business is in a much better position than 12 months ago, with the shift in receivables continuing towards reverse mortgages and away from its underperforming motor and business lending.We also see a chance of a modest guidance upgrade. Our key focus areas will be: (1) reverse mortgage growth; we expect both NZ and Australian receivables to be up &gt;+7% versus FY25 on a constant currency basis; (2) a sequential improvement in non-performing loans in Motor and, more importantly, Business lending; and (3) continued opex control; our employee count indications have New Zealand employees up just +2%, with Australian employees +15% since its FY25 result.

Heartland Group 1H26 Preview—Back in Balance

<ul><li>The Reserve Bank of New Zealand's (RBNZ) capital review was largely in line with its proposed changes for Heartland Group (HGH).</li><li>Lower risk weights for a mix of rural and business lending are also likely to reduce HGH's capital needs.</li><li>We leave our earnings estimates unchanged for now, given HGH does not have excess capital until FY28 on our estimates, but acknowledge the RBNZ's changes to date and the possibility of lower reverse mortgage risk weights would give HGH excess capital to grow its reverse mortgage lending faster over the medium term, should demand remain strong.</li></ul>

The Reserve Bank of New Zealand's (RBNZ) capital review was largely in line with its proposed changes for Heartland Group (HGH).Lower risk weights for a mix of rural and business lending are also likely to reduce HGH's capital needs.We leave our earnings estimates unchanged for now, given HGH does not have excess capital until FY28 on our estimates, but acknowledge the RBNZ's changes to date and the possibility of lower reverse mortgage risk weights would give HGH excess capital to grow its reverse mortgage lending faster over the medium term, should demand remain strong.

Heartland Group RBNZ Deposits Some Good News

<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

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>Adding to last week’s concerns reiterated above, additional developments which have further dampened our overall outlook include a breakdown in the global Discretionary vs. Staples ratio, price and RS deterioration for mainland China, Germany, and European Technology, and new lows in the NASDAQ Global Automobile index. Aside from Germany, other major indexes remain above support in Europe/UK and Japan.  We highlight a number of attractive opportunities in “defensive” Financials including electronic exchanges/markets, insurance, commercial/consumer financing, and select asset managers.</p>

Adding to last week’s concerns reiterated above, additional developments which have further dampened our overall outlook include a breakdown in the global Discretionary vs. Staples ratio, price and RS deterioration for mainland China, Germany, and European Technology, and new lows in the NASDAQ Global Automobile index. Aside from Germany, other major indexes remain above support in Europe/UK and Japan.  We highlight a number of attractive opportunities in “defensive” Financials including electronic exchanges/markets, insurance, commercial/consumer financing, and select asset managers.

Global Equity Strategy: More Cracks Begin to Show

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.

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Heartland Group Holdings (HGH NZ)

Heartland Group 1H26 Result—Climbing Out Of The Valley

Impairments dropped materially (aided by strong recoveries), non-performing loans stepped down in 2Q26, and the wind-up of the non-strategic asset...

Forsyth Barr

Heartland Group 1H26 Preview—Back in Balance

We expect a solid result that shows the business is in a much better position than 12 months ago, with the shift in receivables continuing towards...

Forsyth Barr

Heartland Group RBNZ Deposits Some Good News

The Reserve Bank of New Zealand's (RBNZ) capital review was largely in line with its proposed changes for Heartland Group (HGH).

Forsyth Barr

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

Global Equity Strategy: More Cracks Begin to Show

Adding to last week’s concerns reiterated above, additional developments which have further dampened our overall outlook include a breakdown in the...

Vermilion Research

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