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's (HGH) 1H25 result was as weak as expected. Our focus was on NIMs and opex growth, with large impairments pre-announced. </li><li>NIMs were slightly better than expected, driven by Australia, and while underlying costs were in line, reported opex was higher.</li><li>This confirmed our suspicion that HGH has stepped up its opex in FY25, but management indicated cost growth should moderate from here. </li></ul>

Heartland Group's (HGH) 1H25 result was as weak as expected. Our focus was on NIMs and opex growth, with large impairments pre-announced. NIMs were slightly better than expected, driven by Australia, and while underlying costs were in line, reported opex was higher.This confirmed our suspicion that HGH has stepped up its opex in FY25, but management indicated cost growth should moderate from here. 

Heartland Group - 1H25 Result—Inspecting the Damage

<ul><li>Heading into Heartland Group's (HGH) 1H25 result we thought there were downside risks, but the pre-announcement of a ~-NZ$50m impairment charge and 1H25 NPAT guidance of NZ$2m–$5m was worse than expected.</li><li>Significant impairments in motor and business lending are disappointing, especially given the known economic softness and the lack of further material deterioration in the economy since HGH’s late-November 2024 update.</li><li>Rising costs have also pressured profitability. </li></ul>

Heading into Heartland Group's (HGH) 1H25 result we thought there were downside risks, but the pre-announcement of a ~-NZ$50m impairment charge and 1H25 NPAT guidance of NZ$2m–$5m was worse than expected.Significant impairments in motor and business lending are disappointing, especially given the known economic softness and the lack of further material deterioration in the economy since HGH’s late-November 2024 update.Rising costs have also pressured profitability. 

Heartland Group - Car Crash Crushes Confidence

<ul><li>Heartland Group (HGH) reported a softer-than-expected four-month trading update, as the challenging conditions at the end of FY24 have spilled into FY25.</li><li>In particular, receivables growth has been lower than expected.</li><li>Through the first quarter of FY25, Heartland Bank NZ saw non-performing loans increase ~+14 bps, and took an additional NZ$6.6m of provisioning (~13 bps of NZ receivables). </li></ul>

Heartland Group (HGH) reported a softer-than-expected four-month trading update, as the challenging conditions at the end of FY24 have spilled into FY25.In particular, receivables growth has been lower than expected.Through the first quarter of FY25, Heartland Bank NZ saw non-performing loans increase ~+14 bps, and took an additional NZ$6.6m of provisioning (~13 bps of NZ receivables). 

Heartland Group - Holding On — Trading Update

<ul><li>Heartland Group Holdings (HGH) reported a weak FY24 result, which was characterised by compressed net interest margins (NIM) and higher impairments.</li><li>Importantly, progress has been made on key strategic initiatives, with the completion of the Challenger Bank acquisition, having its Australian authorised deposit-taker license granted, and completing work on its core banking system upgrade in NZ.</li><li>The operating backdrop remains challenging, particularly for the motor and business lending portfolios, which is expected to continue into FY25. </li></ul>

Heartland Group Holdings (HGH) reported a weak FY24 result, which was characterised by compressed net interest margins (NIM) and higher impairments.Importantly, progress has been made on key strategic initiatives, with the completion of the Challenger Bank acquisition, having its Australian authorised deposit-taker license granted, and completing work on its core banking system upgrade in NZ.The operating backdrop remains challenging, particularly for the motor and business lending portfolios, which is expected to continue into FY25. 

Heartland Group - FY24 — Strategic Ticks, Operational Crosses

<ul><li>Heartland Group (HGH) has received indicative regulatory approval to acquire small Australian bank, Challenger Bank, with an expected completion date of 30 April 2024.</li><li>The last significant hurdle to clear is raising ~NZ$210m, roughly half of which is to capitalise the Australian bank.</li><li>Whilst we see this as a positive, execution on its strategy and delivering on the promised growth and earnings is now the key. </li></ul>

Heartland Group (HGH) has received indicative regulatory approval to acquire small Australian bank, Challenger Bank, with an expected completion date of 30 April 2024.The last significant hurdle to clear is raising ~NZ$210m, roughly half of which is to capitalise the Australian bank.Whilst we see this as a positive, execution on its strategy and delivering on the promised growth and earnings is now the key. 

Heartland Group - Challenger Cleared for Launch

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 - 1H25 Result—Inspecting the Damage

Heartland Group's (HGH) 1H25 result was as weak as expected. Our focus was on NIMs and opex growth, with large impairments pre-announced.

Forsyth Barr

Heartland Group - Car Crash Crushes Confidence

With its recent impairment track record and lending exposure to the soft NZ economy, risks remain skewed to the downside.

Forsyth Barr

Heartland Group - Holding On — Trading Update

Heartland Group (HGH) reported a softer-than-expected four-month trading update, as the challenging conditions at the end of FY24 have spilled into...

Forsyth Barr

Heartland Group - FY24 — Strategic Ticks, Operational Crosses

Heartland Group Holdings (HGH) reported a weak FY24 result, which was characterised by compressed net interest margins (NIM) and higher impairments.

Forsyth Barr

Heartland Group - Challenger Cleared for Launch

Heartland Group (HGH) has received indicative regulatory approval to acquire small Australian bank, Challenger Bank, with an expected completion...

Forsyth Barr

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