Friday 19th August 2011 2 Comments
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Heartland New Zealand, which aims to become a bank, reported full year net profit of $7.1 million and one-off costs of $6.8 million.
Among the one-off costs were expenses for the merger between Marac, CBS Canterbury and Southern Cross Building Society to form Heartland, which was completed in January, and costs for the listing of Heartland on the NZX.
Net operating income for the period to June 30 was $70.6m, with consumer business the major driver. The operating environment was challenging which saw net receivables down marginally, Heartland said.
Business and rural divisions were in varying stages of development and were anticipated to have a greater contribution in future.
Past due and impaired assets remained at elevated levels due to non-core legacy property development loan assets, which management was continuing to manage down, Heartland said.
The impaired assets charge for the year of $13.3m was 0.95 percent of average net finance receivables, a considerable improvement over the combined positions of the three merged entities' impaired asset charges during the past two years, which were about $30m a year.
Retail funding was the mainstay of Heartland's funding base, with the retail deposit book stable at $1.6b, and reinvestment rates averaging 77 percent since the merger, the company said.
More than half Heartland's investors had voluntarily moved to non-guaranteed deposits or term deposits with maturities beyond the expiry of the Crown guarantee at the end of 2011 -- including 95 percent of new funds and 79 percent of reinvestments.
"The quality of the retail deposit base has progressively improved with the purging of hot money or guarantee chasers, and is now significantly more loyal and stable," Heartland said.
"This purging will continue but growth in new depositors bodes well for the future."
Heartland said its intention was to be a regular dividend payer no later than in the financial year starting July 2012, provided profit targets and regulatory capital requirements were met.
Previously it announced a profit forecast of between $20m and $24m for the 2012 financial year, and intended to update that after the end of the September quarter.
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