HGH - Heartland Group Holdings

[Muse]

Why do they need to raise more money? It makes no sense. Keep paying dividends and keep raising cash?

I dont think its a case of “needing” to raise capital - more that if/when it occurs - it will have been a conscious decision to grow AU faster. Stockco historically capital constrained as privately owned and had unsophisticated funding. Mgmt believe they can triple the size of the book which is capital intensive. And want to improve the funding from relatively expensive wholesale funding to cheap deposits. That requires an ADI which os effectively what they are buying.

They obviously dont have to go gung ho and try to triple the book in the next few years. They could fund the status quo probably comfortably for the next few years. They could mix and match - optimise funding while pursuing slower growth. AU reverse mortgages could benefit from both initiatives.

Dont forget the capital requirements in NZ are rising so there will be less surplus dosh to invest in AU.

Dont have a crystal ball of what Jeff or the Board are thinking. Clearly optimising and securing sufficient capital for growth are priorities.

Good that some of the board and mgmt have chunky shareholdings.

[Muse]

There are two changes going on to the capital adequacy regime - both on core capital and reverse mortgages. The later is a newer development

https://businessdesk.co.nz/article/f...erse-mortgages

Suspect its more pertinent to long term performance then the short term jitters from capital raising

[alokdhir]

I have heard this many times on various threads but mainly ATM and FPH ...when trouble comes to stock then it comes from all sides and it keeps coming ...

HGH below all MAs for a reason ...in downtrend for a reason ...once in downtrend then takes time to get out of it ...FPH / ATM still struggling

But if all goes as planned they will emerge stronger ...yield if provided and stable will make it easier to hold

[winner69]

Dairy prices down again over night

Allowing for the lag HGH might come under pressure in December

[Rawz]

New director

Looks solid!

Good stuff

https://www.nzx.com/announcements/401567

"Simon will bring to Heartland Bank’s Board his extensive banking skills. His experience spans more than 35 years with particular expertise in treasury, including holding senior treasury and financial markets roles within the National Bank of New Zealand and the RBNZ. More recently, Simon was Chief Executive of the Government Superannuation Fund Authority and the National Provident Fund. Simon is currently an independent director on the audit committee of IHC New Zealand, a director of Palliser Estate Wines of Martinborough Limited, and is a trustee of the Fale Malae Trust and the University of Otago Foundation Trust.Simon’s appointment will provide Heartland Bank with an additional independent director, further contributing to the depth of skills and experience of the Board."

[percy]

Pleasing that HGH attracts top people.

[winner69]

Jeez the PM really got stuck into the banks today because they making record profits - Probably headlines grom ANZ and Westpac that's making her pick on banks but Heartland continues to make RECORD PROFITS as well

PM said “Are they demonstrating social license and commitment to the communities by taking the profits that they are? / “This is not a one-off. We’ve seen them consistently taking record profits.”

Our Chair Geoffrey or CEO Jeff probably too nice to come out and rebuke the PM at tomorrows ASM

Looks awfully complicated to ask a question virtually / online but I might give it a go if I haven't found something more exciting to do (like they always seem to have it on NZ Cup day)

This a good question? - "I congratulate Heartland for making record profits year after year, well done. However the Prime Minister yesterday asked whether the likes of Heartland are 'demonstrating social license and commitment to the communities by taking the profits that they are? . What is your response to those comments?"

[850man]

Jeez the PM really got stuck into the banks today because they making record profits - Probably headlines grom ANZ and Westpac that's making her pick on banks but Heartland continues to make RECORD PROFITS as well

PM said “Are they demonstrating social license and commitment to the communities by taking the profits that they are? / “This is not a one-off. We’ve seen them consistently taking record profits.”

Our Chair Geoffrey or CEO Jeff probably too nice to come out and rebuke the PM at tomorrows ASM

Looks awfully complicated to ask a question virtually / online but I might give it a go if I haven't found something more exciting to do (like they always seem to have it on NZ Cup day)

This a good question? - "I congratulate Heartland for making record profits year after year, well done. However the Prime Minister yesterday asked whether the likes of Heartland are 'demonstrating social license and commitment to the communities by taking the profits that they are? . What is your response to those comments?"

While attacking banks, no mention given of the additional $6 billion in tax the government took from kiwis this year vs last.

[Bjauck]

Good point about the extra tax.

What is the "social licence"? As the PM raises it, how is it defined and does it change over the years? Do all public companies have to operate according to an uncodified "social licence"? In periods yielding good profits, extra "socially good" actions must be performed. In periods of average or poor results, shareholders suck it up.

Meanwhile, the government can cream off the tax arising from the inflation effect in interest earned on bank deposits. Inflation that its policies have helped create and inflation baked into its remit to the Reserve Bank.

[percy]

Better for the country the banks making huge profits rather than huge losses.
Then we would really have something to worry about.