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) 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

<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

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 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

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

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