Most core lending portfolios see continued growth
Heartland Group has disclosed its financial results for the first half of the 2024 fiscal year, ending Dec. 31, reporting a net profit after tax (NPAT) of $37.6 million and an underlying NPAT of $52.7m.
Compared to the same period last year, NPAT saw a decrease of 22.7%, with a slight 3.6% drop on an underlying basis. This shift is attributed to one-off or non-cash technical items impacting NPAT by $15.1m.
“In what has been a mixed environment in which to operate, Heartland’s 1H2024 result saw continued growth in most of its core lending portfolios, with good pipelines for further growth and to expand market share,” said Jeff Greenslade (pictured above), CEO of Heartland Group.
Portfolio growth amid challenges
Despite the financial downtick, Heartland witnessed a 4.2% increase in gross finance receivables, with significant expansions in New Zealand and Australian reverse mortgages, asset finance, and motor finance.
This growth comes as Heartland continues to navigate through operational challenges and higher funding costs, impacting short-term performance but maintaining strong potential for future expansion.
Strategic moves and operational updates
A major highlight for Heartland has been its progress towards establishing a banking presence in Australia, marked by the acquisition of Challenger Bank. This strategic move, coupled with the completion of Heartland Bank’s core banking system upgrade, positions the company for enhanced digitalisation and automation capabilities.
Adjusted guidance and future outlook
Heartland has adjusted its FY2024 NPAT guidance, accounting for the expected one-off impact from the Challenger Bank acquisition and operational challenges in specific finance sectors. However, the company remains optimistic about returning to profitability post-acquisition and continues to see good growth pipelines for its core lending portfolios.
Ambitious growth targets
Looking ahead, Heartland is focused on achieving significant growth and efficiency targets by FY2028, including an underlying NPAT of $200m and a cost-to-income ratio below 35%. These goals are supported by strategic initiatives like the Challenger Bank acquisition, increased digitalisation, and sustained growth across key lending areas.
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