Sharechat Logo

Heartland FY profit slides 71 percent to $6.9 mln on charges to take distressed assets in-house

Monday 26th August 2013

Text too small?

Heartland New Zealand, the country's newest bank, reported a 71 percent slide in annual profit after booking charges to take control of distressed assets previously managed by Pyne Gould Corp.

Net profit fell to $6.9 million, or 2 cents per share, in the 12 months ended June 30, from $23.6 million, or 6 cents, a year earlier, the Christchurch-based lender said in a statement. That was in line with June guidance when Heartland said it was going to take an $18 million charge on writing down the value of loans and investments and to cover the risk of holding some of those assets over a longer timeframe.

Stripping out the one-off impairment, adjusted profit rose to $24.4 million and revenue gained 13 percent to 107.4 million. The bank affirmed its 2014 forecast for net profit of between $34 million and $37 million.

"The NPAT expectation for the next financial year reflects ongoing reductions in cost of funds, lower impairments, continued focus on cost reductions and asset growth in core assets in line with credit growth expectations," the company said.

The board declared a final dividend of 2.5 cents per share, with a Sept. 20 record date, payable on Oct. 4. That takes the total payout to 6 cents per share.

The shares were unchanged at 86 cents on Friday, and have gained 25 percent this year. The stock is rated an average 'buy' based on three analyst recommendations compiled by Reuters, with a median target price of 86 cents.

The bank increased its retail and consumer loan book to $987.8 million as at June 30 from $989.4 million and its business segment assets to $549.2 million from $540.2 million. The rural loan book shrank to $456.6 million from $478.6 million, and the non-core property loan portfolio fell to $107.4 million from $160.2 million.

As at June 30, Heartland's total assets were $2.5 billion, up from $2.35 billion a year earlier, and its deposits were $1.84 billion from $1.63 billion.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Heartland to buy ‘home equity release’ business for $87M, to raise $20M from shareholders
Heartland heads off low-ball offers with plan to pick up brokerage on small share parcels
Heartland shares rise to 2-year high, debt rating affirmed after taking control of bad loans
Heartland cuts 2013 earnings guidance, taking distressed assets in-house, sees growth in 2014
Heartland NZ lifts 1H profit by 9.2 percent on improved retail, business and rural earnings
Heartland gets approval for bank licence
Heartland sees flat profit in 2013, announces special dividend
Heartland investment grade credit rating affirmed, shares gain
Heartland will focus on high-margin business
Heartland triples annual profit, meets earnings guidance