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Highlights

  • In FY24, interest income rose 25.3% YoY to NZD 661.03 million, while profit before tax declined by 22% YoY to NZD 104.54 million
  • Transition from wholesale funding to retail deposits is on track to conclude by 30 June 2025
  • The company targets an underlying return on equity of 12-14% and NPAT of NZD 200 million by FY28

Heartland Group Holdings Limited (NZX:HGH) is an NZX-listed financial services company. The company has operations in Australia and New Zealand. The company has a market cap of NZD 899.9 million.

Net interest margin of HGH has been improving with respect to NZ banking. The company is on track to achieve an exit NIM greater than 4% in the financial year 2025 (FY25).

Financial performance of HGH

In FY24, the company recorded 25.3% YoY rise in its interest income to NZD 661.03 million. However, the period saw a 6.6% YoY drop in net operating lease income to NZD 1.68 million and 22% YoY decline in profit before income tax to NZD 104.54 million.  

FY24 performance was affected by the rapidly deteriorating economic conditions in May and June 2024. During this period, HGH’s Asset Finance, Rural and Motor Finance portfolio witnessed the emergence of additional provisions. Notably, non-cash or one-off technical items had NZD 28.2 million impact on NPAT.

In the four months ended 31 October 2024 (YTD 2025), the bank transitioned from wholesale funding to retail deposit funding. It has been advancing well and is on track to be concluded by 30 June 2025.

During the reported period, reverse mortgages have performed well and have recorded an annualised growth of 14.5%.

Outlook

In the second half of FY25 (2HFY25), the company continues to manage credit quality carefully. It expects growth to return as credit demand increases and interest rates decrease. By the end of FY25, the company remains cautious in the near term and anticipates growth in core lending to return as the Australian and New Zealand economies improve.

In FY28, the company aims to deliver underlying return on equity of 12-14% with an underlying net profit after tax of NZD 200 million (by the end of FY28). These numbers are expected to be achieved through core lending portfolio growth, simplification and capital efficiency.  

Share performance of HGH

HGH shares closed 1.03% lower at NZD 0.96 per share on 9 December 2024. Over the past year, HGH’s share price has dropped by almost 40.45% and in the last three months, it has declined by 11.11%.

52-week high of HGH is NZD 1.63, recorded on 11 December 2023, and 52-week low is NZD 0.94, recorded on 5 December 2024.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is December 9, 2024. The reference data in this report has been partly sourced from EODHD/Others.