HGH - Heartland Group Holdings

[lorraina]

Big difference between Brian and Richard,one knows finance the other proved he did not.
If you do not know the difference ,pity you .

[Basil]

I think the point is that a lot of people trusted Richard Long's endorsement right up to the point he was proven wrong.  (Predicting the future is a very inexact science and it makes fools of all of us from time to time including so called expert financial commentators and every economist out there).

Perhaps more interestingly and more current is that according to CNBC the American regional bank index (an index of all listed regional banks above a certain market capitalization), is currently on a forward PE of just 7.  Index is down about a third in recent weeks.  According to anecdotal reports the rate of withdrawals and switching to larger banks and / or treasuries or money market funds is slowing.

[winner (n)]

Big difference between Brian and Richard,one knows finance the other proved he did not.
If you do not know the difference ,pity you .

Brian is a great guy and very good at what he does. I have had a few pleasant discussions with him over the years.

 But he is a scholar who researches, writes, works and teaches in economic, social statistics, public policy and New Zealand Studies. (His biography)

In spite of the high esteem I hold him in he is one who I'd go to for financial/investing advice ............ rate you percy ahead of him in this respect 

[lorraina]

Richard Long was a good news reader. Full stop.

[winner (n)]

Richard Long was a good news reader. Full stop.

And dont forget what Brian and percy say 'these days you need to choose financial institutions which are well supervised and regulated by the Reserve Bank of New Zealand."

[lorraina]

And I think most Americans ,who bank with regional banks, would wish their banks complied with The Reserve BanK of NZ's rules,supervision, and regulations.

[Basil]

And I think most Americans ,who bank with regional banks, would wish their banks complied with The Reserve BanK of NZ's rules,supervision, and regulations.

Agreed.  High probability everything will be fine with HGH, that's what a BBB credit rating suggests.
29 chances our of 30 in the next 5 years there won't be a default requiring some form of RBNZ intervention or support.  Completely understand that a lot of people will be quite comfortable with those odds and accept a higher return on their HGH accounts as reward for doing so.
Theoretically the big 4 which have better credit ratings are safer, with up to only a one in 150 chance of a default event in the next 5 years for an A rated bank, but frankly I don't believe that because I think they all have massive off balance sheet derivatives books and who really knows what could potentially go wrong with the world's financial system in the next 5 years?

Kiwibonds Govt guaranteed at 4.25% are not a bad place for those who are really risk averse, Mrs hound often seems to worry about financial things a lot so she has some of her money she inherited recently in there and feels safe and good on her. 

Possible Impact on Net Interest Margin is something to think about though.
A few months back what was on offer in terms of term deposit interest rates between HGH and the bigger banks, there really wasn't much in it.  Now HGH paying 50 bps more than the major banks for (for example), one year term deposits.  Pretty sure there will be a material effect on net interest margin going forward which in my opinion is something to think about when forecasting future eps....that and the state of the economy....

[lorraina]

NIM contracted during the course of the half and an underlying since it is at 4.02% and 3.97% in a reported sense, which is down just under 30 basis points. Now that's been caused by a range of factors, the mix of the book, particularly the growth we've seen in Reverse Mortgages has contributed to that, which is a positive. We've also seen the shift in the risk of the motor book, which has also resulted in a decline in lending yields, which has contributed.

But also, in an environment of rising interest rates, we did not take the opportunity to increase our margin. We were very prone to pass on the benefits of increased rates to our depositors; less so to our borrowers, we gave them time to adjust. And in the case of Reverse Mortgages in both countries, in some cases, we didn't pass on those increases at all.

[Crackity]

NIM contracted during the course of the half and an underlying since it is at 4.02% and 3.97% in a reported sense, which is down just under 30 basis points. Now that's been caused by a range of factors, the mix of the book, particularly the growth we've seen in Reverse Mortgages has contributed to that, which is a positive. We've also seen the shift in the risk of the motor book, which has also resulted in a decline in lending yields, which has contributed.

But also, in an environment of rising interest rates, we did not take the opportunity to increase our margin. We were very prone to pass on the benefits of increased rates to our depositors; less so to our borrowers, we gave them time to adjust. And in the case of Reverse Mortgages in both countries, in some cases, we didn't pass on those increases at all.

Your management team seems to be doing very well Percy and making good decisions - is your job a a full time role?

[lorraina]

Turning out that way...lol.

[winner (n)]

Independent economist Bagrie (whose actually worked for a bank once) says -

Bagrie said "everything's a possibility" but a GFC wasn't a reality in the current economic environment.

"Let's keep Chicken Little in the coup - the sky's a long way away from falling," he told AM host Ryan Bridge

Also added that the current failures are to a large extent due to 'mismanagement' ....can't say that about our Jeff can we.

https://www.newshub.co.nz/home/money/2023/03/economist-cameron-bagrie-reveals-what-it-would-take-for-another-global-financial-crisis-amid-banking-turmoil.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+29+March+2023

[lorraina]

Thanks for posting.
He makes good sense.

[Capt_Hook]

NZ.s 50 top Bosses richer than ever following big pay rises

CEO Pay 2022 Table
================
https://www.neighbourly.co.nz/public/auckland/mount-albert/message/69117733

No 10 .Jeffrey Greenslade Heartland Group Holdings $3,065,103

don't know how accurate this is but none of these using the Foodbanks !!

And just in case you were wondering that's Roughly $59,000 per week Jeffs earning . Bound to be higher this year.

[Recaster]

Independent economist Bagrie (whose actually worked for a bank once) says -

Bagrie said "everything's a possibility" but a GFC wasn't a reality in the current economic environment.

"Let's keep Chicken Little in the coup - the sky's a long way away from falling," he told AM host Ryan Bridge

Also added that the current failures are to a large extent due to 'mismanagement' ....can't say that about our Jeff can we.

https://www.newshub.co.nz/home/money/2023/03/economist-cameron-bagrie-reveals-what-it-would-take-for-another-global-financial-crisis-amid-banking-turmoil.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+29+March+2023

Find the consensus among economists. The outcome will be the opposite.

[Basil]

No 10 .Jeffrey Greenslade Heartland Group Holdings $3,065,103

Seems a lot for a company that's making ~ $100m per annum and not forecasting any eps growth this year, (real inflation adjusted eps falling 7%) and maybe none next year too with their costs of funding heading relentlessly north.

We are pleased to inform you that the interest rates on some of our savings products have increased on 29 March 2023.
Business Call account - 3.60% to 4.10% p.a.
Direct Call account - 3.60% to 4.10% p.a.
90 Day Notice Saver - 5.00% to 5.15% p.a.

It seems to me many of their accounts/ term deposits are now paying market leading interest rates by a pretty sizeable margin, often half a percent.
The new normal for smaller banks trying to attract funds going forward?