HGH - Heartland Group Holdings

[mike2023]

Something else bad? I thought we had a list? Credit raise,  more bad debts, maybe a pink font?

[Cod]

Something else bad? I thought we had a list? Credit raise,  more bad debts, maybe a pink font?

If we know and have a list then it's priced in.

[Rawz]

HGH invested in Harmoney a while back.

HMY.asx is largely an unsecured lender charging rates 10%+.
They just reported HY today, key item:


Improved credit performance: Credit losses down to 3.7% from 4.2%, with low arrears at 0.64%


How on earth does HMY get through the recession with write offs shrinking and low arrears. Just goes to show how poor HGH lending systems were

[Basil]

Their systems are still appallingly bad as is their risk mis-management.

I'd go so far as to say the best thing they. can do for shareholders is to stop all lending apart from reverse mortgages and wind the book down and fire two thirds of the staff.

Everything apart from reverse mortgages is just a bloody train wreck.

[Red Baron]

HGH invested in Harmoney a while back.

HMY.asx is largely an unsecured lender charging rates 10%+.
They just reported HY today, key item:

Improved credit performance: Credit losses down to 3.7% from 4.2%, with low arrears at 0.64%

How on earth does HMY get through the recession with write offs shrinking and low arrears. Just goes to show how poor HGH lending systems were

Are you zure you are reading zhose announcments right?  Ze Heartland announcment reads (and I quote)

---------------------

Writing off these arrears is expected to result in Heartland Bank's non-performing loan (NPL) ratio decreasing
from 3.65% as at 30 June 2024 to 3.40% as at 31 December 2024 and will enable more resources to continue to focus
on addressing earlier stage arrears

----------------------


Zo even before ze latest Heartland writedown, non-performing loans vere in better shape at Heartland (3.65%) zhan Harmoney non-performing loans are today (3.7%)

RB

[Rawz]

RB, what i am saying is HMY write offs during the recession is shrinking vs HGH increasing dramatically.
HMY systems are clearly on point. Writing good credit. HGH motor and asset lending is clearly terrible.

One would think it would be the opposite. I.e. how does a non secured lender with 9% NIM achieve better credit outcomes than HGH..

[Basil]

TA suggests HGH will run down to 61c and loiter for a while, unless something else bad happens.

You cannot view this attachment.

61 cents is all they're worth and only if they fire half the clueless overpaid Muppets in management.

[Red Baron]

RB, what i am saying is HMY write offs during the recession is shrinking vs HGH increasing dramatically.
HMY systems are clearly on point. Writing good credit. HGH motor and asset lending is clearly terrible.

Harmoney made no comment on zheir write offs een zheir announcment.    HGH had write offs of $50m.  No-one is zaying ze Heartland announcement eez good.   But another vay of looking as zhis eez to say Heartland are being realistic about vhat they can collect, vheras Harmoney are choosing not to zhink about it.

One would think it would be the opposite. I.e. how does a non secured lender with 9% NIM achieve better credit outcomes than HGH..

It didn't.  As I zaid before  Credit losses at Harmoney 3.7%.  Credit losses at Heartland 3.65% (prior to any write off adjustment).  I.e. Heartland credit losses vere less.

RB

[Rawz]

RB, it is because HMY write offs are BAU..

[Rawz]

It didn't.  As I zaid before  Credit losses at Harmoney 3.7%.  Credit losses at Heartland 3.65% (prior to any write off adjustment).  I.e. Heartland credit losses vere less.

RB

HMY NIM 9% vs HGH 4%. HMY credit losses should be far far higher than HGH. HGH not charging for the risk?

[KW]

How on earth does HMY get through the recession with write offs shrinking and low arrears. Just goes to show how poor HGH lending systems were

Oh, thats easy.  

Harmoney has a highly diversified funding panel with warehouses being provided by three of the "Big 4" banks across Australia and New Zealand

With $900M at risk, the big banks are peering over HMY's shoulder and making sure they have good lending practices. Who provides oversight of HGH? 

[Red Baron]

RB, it is because HMY write offs are BAU..

Ze norm vith vinance companies eez to have a 'provision for bad debts' against vhich 'annual bad debt expenses' are 'written off'.   You are zaying zhat Harmoney does zhings differently?  Please explain.

RB

 

[Red Baron]

HMY NIM 9% vs HGH 4%. HMY credit losses should be far far higher than HGH. HGH not charging for the risk?

Vith hindsight, vhich eez vhere zhese 'one off impairment expenses' come in, I vould agree vith you.   However at Heartland ze risk base has now been reset.

RB

[Basil]

Vith hindsight, vhich eez vhere zhese 'one off impairment expenses' come in, I vould agree vith you.  However at Heartland ze risk base has now been reset.
RB

I am somewhat surprised that you would "buy" the latest B.S. they are spinning.

[Red Baron]

I am somewhat surprised that you would "buy" the latest B.S. they are spinning.

Deed I zay I bought ze reset?  No, I just reported vhat they did.   Vhether the reset eez adequate, time vill tell.   But eet zounds like chasing up 'motor vehicle' and 'Open for Business' loans, vhere zhere has not been a payment made vor more zhan a year eez probably not a good use of Heartland ztaff time.    Best to vocus zhat ztaff time on loans 'less overdue' zhan zhat.

However, ze counter point to your comment Basil eez, eef you zuggest zhat ring fencing out loans more zhan a year overdue eez not adequate, vhere vould you build your, "This position is adequate' vence?

RB