Heartland says full-year profit soars after one-off charges wash through

Heartland New Zealand Managing Director Jeff Greenslade
Heartland New Zealand 12-month price history (NZX.com)

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

Heartland New Zealand [NZX: HNZ], the bank formed from the merger of Canterbury and Southern Cross building societies and Marac Finance, said annual earnings soared 421 percent after one-off charges in the prior year washed through and as it improved profitability.

Profit rose to $36 million in the year ended June 30, 2014, from $6.9 million and near the higher end of its forecast $34 million to $37 million range, the Christchurch-based lender said in a statement. Heartland's 2013 earnings were weighed down by charges to take control of distressed assets previously managed by Pyne Gould Corp, and it said increased operating income, and continued management of expenses and impairments helped lift the 2014 profit.

The earnings represent a return on average equity (ROE) of about 9 percent, compared to a previous ROE of 2 percent, and an adjusted ROE of 6.5 percent, Heartland said in a statement.

"Heartland will continue to investigate potential acquisition opportunities that are ROE accretive as well as assessing possible capital management options to improve ROE," the company said. "We will continue our product centric strategy focusing on higher yielding products where a leading market position can be achieved."

Earlier this year, Heartland bought a reverse mortgage business from Seniors Money International for $87 million, and at its February first-half report said it was looking for new acquisitions to accelerate growth. Last month it emerged that Motor Trade Finances, which has a loan book of some $438 million, had rejected a takeover bid from the bank.

The Seniors Money acquisition contributed about $1 million to net profit, it said.

In May Standard & Poor's raised the Christchurch-based lender's long-term issuer credit rating to BBB from BBB-, while retaining a negative outlook based on New Zealand's exposure to economic imbalances, it said in the upgrade.

Shares of Heartland were unchanged at 94 cents. The company will announce its annual results on Aug. 25.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6628 -0.0036 -0.54%
AUD 0.8957 0.0016 0.18%
EUR 0.6044 -0.0012 -0.20%
GBP 0.4298 -0.0012 -0.28%
HKD 5.1409 -0.0279 -0.54%
JPY 80.9160 -0.7260 -0.89%

Commods

Commodity Price Change Time
Gold Index 1152.6 -17.510 2015-07-07T00:
Oil Brent 57.4 -3.220 2015-07-07T00:
Oil Nymex 52.4 0.230 2015-07-07T00:
Silver Index 15.0 -0.793 2015-07-07T00:

Indices

Symbol Open High Last %
NZX 50 5804.6 5811.4 5803.2 -0.43%
NASDAQ 4993.8 5002.0 4991.9 0.11%
DAX 10930.0 10946.9 10890.6 -1.96%
DJI 17684.9 17793.5 17683.6 0.53%
FTSE 6535.7 6543.8 6535.7 -1.58%
HKSE 24411.3 24411.3 24975.3 -4.26%
NI225 20282.5 20310.9 20376.6 -1.52%