Heartland flags profit at top end of guidance

Thursday 21st May 2015

Heartland New Zealand, the bank formed through the merger of Canterbury and Southern Cross building societies with Marac Finance, says it expects full year profit to be at the upper end of its guidance range.

The Christchurch based lender expects profit to be at the top end of its range of $46 million to $48 million in the 12 months ending June 30, 2015, compared to profit of $36 million in the 2014 year, it said in a statement.

Unaudited net profit for the company's Heartland Bank unit was $30.9 million for the nine months ended 31 March, 2015, compared with net profit for Heartland NZ of $36.1 million, primarily due to the portion of Heartland’s reverse mortgage book that is held outside Heartland Bank, it said.

The lender is targeting expansion through niche markets, particularly in the consumer finance sector. Last year it bought the reverse mortgage business from Seniors Money and it has also taken a 10 percent stake in peer-to-peer lender Harmoney Corp for $3.5 million to accelerate growth. The lender estimates its stake in Harmoney is now worth $5 million. Some $17 million has been lent through the online platform.

Shares of Heartland were unchanged at $1.29 and have gained 14 percent since the start of the year.

BusinessDesk.co.nz

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