HGH - Heartland Group Holdings

[Basil]

The Australian NIM is down and they mention full pass on of OCR cuts to reverse mortgages. As Muse has pointed out they were going on about the banks cost of money going down so why is it low?

Good question.  Any takers to answer it ?  Maybe a good question for someone to ask at the forthcoming AGM.  From memory there was heaps of promotion by the company around their recent capital raise and driving down the cost of Australian funding, ($30m annual savings rings a bell for me), was touted as one of the key reasons for the capital raise.  So where have these savings gone in FY25 ?  More concerning is the forecast for FY26 of only $85m on a massively expanded number of shares on issue.  Surely this does not include a $30m funding cost reduction as otherwise the profit forecast would have only been a pitiful $55m...surely not ?

What they didn't talk about very much was the cost of the new convoluted management and board structure with the huge cost of senior management teams on both sides of the Tasman, as well as a group management team and separate boards for each country's operations.  Is this a key reason their cost to income ratio has climbed so alarmingly ?  So how are they going with progress on that cost to income ratio they talked about going down to 35% by FY28 ?

I've followed this company for many years and I can't ever recall it being over 50% before but it is now and was 52.4% in Q1 FY26 compared to 41.9% in 2H FY22.  That's a massive increase since they started this process of growing their Australian operations with their own registered bank there.  All the talk of getting the CTI down has come to nothing, in fact their operational costs have grown at a truly alarming rate in recent years so that begs the questions.  Are they still on track for their $200m profit target in FY28 and CTI ratio of 35% or have these goals been quietly dropped / about to be pushed out to FY30 and watered down ?

Just a few questions to ask at the annual meeting.   I did my bit last year including pushing the directors and management on why they continue lending on residential mortgages on a pathetic 65 bps margin and why they haven't tightened their approvals for motor vehicle loan approvals, (both policies have now been changed after I suggested they should be).  Hopefully someone else asks the hard questions this year. 

[Shareguy]

Craigs added to conviction portfolio

At this juncture we are adding Heartland Group (HGH) with a 5% weight and NZX with a 2.5% weight. HGH, under new management, is re-allocating capital to auto loans and reverse mortgages, where it is the market leader in NZ and Australia and generates higher returns. The NZX offers leverage to both a short-term NZ market recovery and long-term growth in KiwiSaver. These positions are being funded by removing PCT (5%) and reducing our FPH position from 12.5% to 10%. The Gentailers

[Greekwatchdog]

Geez this was great buying/adding to holding from the late $0.70's.

Economy now has more green shoots, finally, job market getting a little more traction all off lows.

Be an interesting Investor day next week to see if there is any further news from 1st quarter update

[LaserEyeKiwi]

Geez this was great buying/adding to holding from the late $0.70's.

Economy now has more green shoots, finally, job market getting a little more traction all off lows.

Be an interesting Investor day next week to see if there is any further news from 1st quarter update

Farmers getting $4 Billion in 2026 from the brands sale also de-risks the rural sector somewhat.

[winner (n)]

FPH getting the cold shoulder while HGH gets the love ...wow this time really is different

[Greekwatchdog]

FPH getting the cold shoulder while HGH gets the love ...wow this time really is different

Hey maybe if HGH management outperform and Shareholders do well you can make one of your requests to have them Knighted.....

[winner (n)]

I see Heartland not a finalist in the Best Growth Strategy in this years big biz awards

That's a good sign

[Shareguy]

https://newsroom.co.nz/2025/11/11/heartland-bank-repossesses-a-vehicle-a-day-amid-tougher-loan-enforcement/

[Basil]

The bank begins engaging with customers almost immediately after they fall behind on their loan repayments, contacting them by text and email. Five days after non-payment they will begin calling the customer, which continues through to day 45.

At this point the vehicle may be seized by two companies that contract to Heartland. The customer has a further 14 days following repossession to redeem the vehicle by paying the arrears or by engaging with the bank to find a solution.

Since February 2025.  Hmmm.  This is the sort of policy that makes sense and that they should have been doing ever since they started lending on motor vehicles.

[LaserEyeKiwi]

Since February 2025.  Hmmm.  This is the sort of policy that makes sense and that they should have been doing ever since they started lending on motor vehicles.

well yes, hence why the new CEO has implemented the change shortly following his appointment, along with other sensible moves like getting out of traditional home loans and selling other non-core assets.

[Basil]

well yes, hence why the new CEO has implemented the change shortly following his appointment, along with other sensible moves like getting out of traditional home loans and selling other non-core assets.

Leanne Lazarus was appointed CEO of Heartland Bank N.Z. in August 2022 and she is responsible for N.Z. lending so this was always her purview.  You're getting confused with the timing of the new Group CEO who was the former Group CFO and should have been providing Lazurus with support and directional guidance from the get-go.  My contention is that no matter how you try and frame it more positively, the groups loan arrears management processes appear to have been too loose until quite recently.

[winner (n)]

A year ago at last years ASM I recall Basil getting stuck into Leanne Lazarus telling her their collecti9n process was pretty disgraceful. Basil suggested they start contacting overdue punters much sooner and keep nagging them to pay up or else

Obviously Leanne took this on board and after returning from her Christmas break got things moving ..in February

Well done Basil ...shaming them into action. Bravo, shareholders need to thank you.

PS .... That's one reason why this years ASM is in Ashburton ..keeping the likes of Basil out of the way

[Pierre]

It's always easy to lend money - much, much harder to collect it. Just ask Shane Jones!

[Greekwatchdog]

ASM meeting data attached. Seems the mood is positive

https://www.nzx.com/announcements/462563

[LaserEyeKiwi]

- Investor day is now going to be in March, following Feb earnings.
- 2026 guidance re-iterated (no change)

EDIT: actually a slight upgrade in guidance depending on where you look in the document: NPAT guidance is listed as equal to or greater than $85 million, but in some remarks it says "above $85 million"