Net profit reaches $95.1m
Heartland Group Holdings Limited has enjoyed a bumper financial year, including a record net profit after tax of $95.1m in FY22, an increase of $8.1m compared to the previous year.
The New Zealand-owned company, which includes Heartland Bank in New Zealand and Heartland Finance in Australia, also announced a $200m equity raise.
This is made up of a $130m fully underwritten placement and a $70m non-underwritten share purchase plan to shareholders in New Zealand and Australia, with the ability for Heartland to accept oversubscriptions at its discretion.
Heartland Bank general manager - retail and reverse mortgages Andrew Ford (pictured above) said the bank had enjoyed excellent results and was excited for future growth opportunities.
“We have seen a strong increase in demand for reverse mortgages as a higher cost of living putting pressure on older homeowners as well as acceptance and recognition of a product such as a reverse mortgages,” Ford said.
“I believe we are still only scratching the surface when it comes to reverse mortgages.”
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Ford said mortgage advisers helped create awareness for an offering such as reverse mortgages.
“There is a huge need for them and there is a lot of misconceptions around them,” he said.
“They provide flexibility and options for people to help make an informed decision. It presents as a well-rounded offering.”
Ford said in a recent home loan survey, 98.1% of Heartland Bank customers would recommend the bank to a friend or family member.
“We pride ourselves in being different from the other banks that people are used to. We research internationally and believe we have the right mix of products that will best suit our customers.
“This in turn is reflected in our results and the brilliant team we have. It makes me proud to reflect on the growth we have achieved and is a huge endorsement for the work that we do.”
Read next: Heartland Bank wins prestigious award
Further highlights for FY22 include:
- Gross finance receivables (receivables) of $6.2bn, up 15.3% ($765.9m)
- Return on equity of 12.1%, up 21 basis points;
- Net interest margin of 4.16%, down 19 basis points
- Net interest income of $250.1m, up 7.1%
- Impairment expenses as a percentage of average receivables decreased from 0.31% in FY21 to 0.25% in FY22.
As of June 30, 2022, the final dividend of 5.5c per share which takes the FY22 total dividend to 11c per share. This was flat on FY21 with a payout ratio consistent with the average over the last three years.
Heartland Bank reported a 120% increase in users of its mobile app. It was also awarded Canstar Savings Bank of the Year 2022 for the fifth consecutive year and awards for its Direct Call, 32 Day Notice Saver and 90 Day Notice Saver accounts.
It also received the New Zealand Reverse Mortgages Award Consumer Trusted Accreditation (fifth consecutive year) and helped its 20,000th customer.
Ford said Heartland remained focused on ensuring support was provided to customers who might be struggling in the current environment.
“Notwithstanding these pressures, Heartland’s loan portfolios have performed strongly.
“Underlying impairment expense ratio was 29bps in FY22, which was two bps lower than in FY21.”
Ford said asset finance reached $30.6m, an increase of $2.1m compared with FY21.
“Asset finance receivables increased $62.6m to $633.6m during the last 12 months,” he said.
“Despite the impacts of COVID-19, new business growth in FY22 exceeded expectations as Heartland continues to build its intermediated partnership strategy and delivery processes. Demand from the logistics and other productive sectors remained resilient through variable conditions and activity remains focused in these segments.”
Ford said home loans receivables increased $224.8m (450.8%) to $274.7m in FY22.
“Rising interest rates drove a high volume of applications in FY22 as customers sought to lock in competitive rates,” he said.
“Heartland’s rates were frequently market-leading across standard residential mortgage products throughout the year and remain in a phase of rapid growth. We are targeting a book size of $495m by the end of FY23.”
