HGH - Heartland Group Holdings

[lorraina]

Part of an article on Craigs website.

Our regulatory environment is robust, the banks have all been required to hold
more capital in recent years, while the liquidity and funding backdrop has
improved since the GFC days.
Even if this isn't a repeat of 2008, I doubt that SVB and Credit Suisse will be the last
casualties of the sharp tightening in monetary policy.
Whenever interest rates rise as rapidly as they have in the past 12 months, sooner or
later someone, somewhere finds themselves into trouble.
In the mid-1990s it was the Mexican crisis, in the early 2000s it was the bursting of
the dot-com bubble, and in 2007 it was the US housing market.
This time around it's been a few crypto operators and some banks that have taken
on too much risk.
So far, that is.

[Red Baron]

Yeah, nah you're wrong.  They're a bank.  The clue is in the name "Heartland Bank Limited."  They've been a New Zealand registered bank since 2012.

There is an old German proverb, that roughly translates as follows:
"If it looks like a duck, and quacks like a duck, there is a very good chance that what you have is - a duck."

Let's apply this 'duck test' to Heartland bank.

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

Bank teller bursts, by the external security guard (the one that isn't there) and goes straight up to the front desk at Heartland.    He is holding a gun in one hand and a swag bag for the loot in another.

Robber to Teller:  "Give me all your cash and stick it in here."
Teller to Robber:  "We don't have any cash, it is all down the road at Westpac."
Robber to Teller:  "All right then, keep your hands in the air and tell them at Westpac to be ready, I am  coming - no funny business."

Robber leaves Heartland Bank where he is immediately set upon by a policeman.

Policeman to Robber: "You are nicked for bank robbery."
Robber to Policeman:  "But, but I didn't take anything!"  (shows police officer empty swag bag)
Policeman to Robber:  "Oh yeah, you are free to go.  I have another call to attend to anyway.  Threat of a bank robbery at Westpac down the road....."

Does that 'Heartland office scene' sound like it was set in a 'bank' to you?  Heartland can register as a bank and call themselves a bank.    But I would argue that if it doesn't perform the functions of a bank, like managing their own accounts, it fails the duck test.

The fact is that if Heartland bordered up their doors tomorrow and refused to engage with you as a an account holder vhat vould you do?  The answer vould be go down the road and access your Vestpac/Heartland account as per usual.

RB

 

[lorraina]

Would a long line of Heartland depositors lining up outside Westpac branches to withdraw their funds,cause a run on Westpac?
I can just see TV reporting; huge crowds lining up to withdraw their funds from Westpac.

[Red Baron]

And could a bank robber get off -on a technicality- on a charge of robbing a Vestpac bank, by claiming he vas actually robbing Heartland Bank?  So many technicalities to be thought through!

RB

[Untamed]

You are just being ridiculous now.

In an effort to protect my sanity, I have emailed Heartland to request clarification.

"Assumptions are made and most assumptions are wrong." – Albert Einstein

And could a bank robber get off -on a technicality- on a charge of robbing a Vestpac bank, by claiming he vas actually robbing Heartland Bank?  So many technicalities to be thought through!

RB

[BlackPeter]

Transferred everything out of my Heartland Direct call account today. I'm sure everything's bang to rights but I got caught up in the Icelandic bank mess years ago and learnt that there's a time to chase a few points extra on yields and there's a time not to.

LOL - and put it all under your matrass?

Are you one of these bots programmed to create havoc? Otherwise - sounds pretty stupid behaviour to me.

By all means - diversify - and that's not just related to HGH. However - panicking is never a sensible reaction ...

[mcdongle]

This seems a little irrational and reactive to me. I can understand that one might wish to re-visit their current banking arrangements, and spread their eggs across multiple baskets, but withdrawing everything seems a little over the top to me. I'm assuming you are both invested in the company, not simply banking with them? If that is the case, surely pulling everything out of the bank you are invested in, is more than a little counter productive?

You assumed wrong...

Also i think people getting all wound up over what i do with my own money is strange..

[Untamed]

My apologies for assuming you were a holder. I don't think it was an unreasonable assumption to make though, that most people posting in an HGH thread, are probably holders.

I wasn't getting "wound up"about about what you do with your money, but as a holder of HGH, and a banking customer, I think I am fairly justified in being a little concerned that people appear to be panicking about a possible bank collapse. There is currently zero reason to believe Heartland Bank is likely to fail. I was merely expressing my opinion that making a decision out of a sense of panic, without any facts to support it, is probably not the best move.

You assumed wrong...

Also i think people getting all wound up over what i do with my own money is strange..

[Crackity]

I am fairly justified in being a little concerned that people appear to be panicking about a possible bank collapse. There is currently zero reason to believe Heartland Bank is likely to fail. I was merely expressing my opinion that making a decision out of a sense of panic, without any facts to support it, is probably not the best move.

Most bank runs don't need facts just panic.


Generally there are two kinds of problems for a bank. The most important or the most dangerous one is a solvency problem, where you've made loans, and you have other assets that get marked down in value dramatically, and you wipe out your equity, you are bankrupt.

The other kind of problem there is when you need liquidity to fulfill the obligations that you have to your depositors, and then that's a liquidity problem. Bad liquidity problems are in effect solvency problems as well.

A dangerous call to make that none of these issues could apply to Heartland

And I don't hold or bank with them

[Untamed]

I did not say none of these issues could apply to Heartland. I said - "there is currently zero reason to believe Heartland Bank is likely to fail."

When I typed that, I assumed it was clear that I meant anytime soon rather than never, given the context of this discussion.

I stand by that statement until such time as there is reason to believe otherwise.

Most bank runs don't need facts just panic.


Generally there are two kinds of problems for a bank. The most important or the most dangerous one is a solvency problem, where you've made loans, and you have other assets that get marked down in value dramatically, and you wipe out your equity, you are bankrupt.

The other kind of problem there is when you need liquidity to fulfill the obligations that you have to your depositors, and then that's a liquidity problem. Bad liquidity problems are in effect solvency problems as well.

A dangerous call to make that none of these issues could apply to Heartland

And I don't hold or bank with them

[Crackity]

I did not say none of these issues could apply to Heartland. I said - "there is currently zero reason to believe Heartland Bank is likely to fail."

When I typed that, I assumed it was clear that I meant anytime soon rather than never, given the context of this discussion.

I stand by that statement until such time as there is reason to believe otherwise.

Last published accounts to 31 Dec 2022

Statement of Financial position

Cash  - 385 million

Borrowings from Depositors ( Note 9 ) - 4.07 Billion of which 800.3 million are on demand ( Note 15 - titled Liquidity Risk )

I have no reason to suspect Heartland are likely to fail any time soon either but it is within the bounds of possibility....

[Breezy]

Last published accounts to 31 Dec 2022

Statement of Financial position

Cash  - 385 million

Borrowings from Depositors ( Note 9 ) - 4.07 Billion of which 800.3 million are on demand ( Note 15 - titled Liquidity Risk )

I have no reason to suspect Heartland are likely to fail any time soon either but it is within the bounds of possibility....

All things are possible to those that believe it but equally highly unlikely.

[kiwi2007]

Just to reply to a few points:

I lost 45,000 GBPounds in the Icelandic bank crash (albeit temporarily, as UK holders were eventually bailed out by the UK government) which makes me rather cautious, especially as NZ seems to be dragging its feet on deposit guarantees. Whether they'd bail depositors out in full if a bank did fail here seems unlikely.

No, I'm not a current shareholder. I sold several months ago.

I transferred out only my Direct Call account. I still have a couple of term deposits with Heartland. In truth I was very much overcommitted with them.

Yes, some will go under a 'mattress'. Most though is to be spread amongst my BNZ, KiwiBank and ASB accounts. Banks with an A in their credit rating.

[Untamed]

Thanks for clarifying. That makes a lot more sense to me, than my assumption (I'm making too many of those today) that you mean't "everything." I am actually on the same page as I am aware that my eggs are pretty much all in one basket, so I will probably be juggling things around tomorrow to better diversify across the three banks I bank with. Not because I believe for one moment that Heartland is about to fold, but simply because it spreads my risk a little better. I think sometimes we are focussed on doing that with our share holdings, but forget to do it with our banking.

Just to reply to a few points:

I lost 45,000 GBPounds in the Icelandic bank crash (albeit temporarily, as UK holders were eventually bailed out by the UK government) which makes me rather cautious, especially as NZ seems to be dragging its feet on deposit guarantees. Whether they'd bail depositors out in full if a bank did fail here seems unlikely.

No, I'm not a current shareholder. I sold several months ago.

I transferred out only my Direct Call account. I still have a couple of term deposits with Heartland. In truth I was very much overcommitted with them.

Yes, some will go under a 'mattress'. Most though is to be spread amongst my BNZ, KiwiBank and ASB accounts. Banks with an A in their credit rating.

[Breezy]

Thanks for clarifying. That makes a lot more sense to me, than my assumption (I'm making too many of those today) that you mean't "everything." I am actually on the same page as I am aware that my eggs are pretty much all in one basket, so I will probably be juggling things around tomorrow to better diversify across the three banks I bank with. Not because I believe for one moment that Heartland is about to fold, but simply because it spreads my risk a little better. I think sometimes we are focussed on doing that with our share holdings, but forget to do it with our banking.

I prefer to support kiwi business so only have money in Kiwibank/Heartland and SBS which has been around since 1869.