New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

Heartland Group Holdings / Equity Bottom-Up

<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