HGH - Heartland Group Holdings

[Under Surveillance]

Hi guys, is anyone an interest.co.nz member and has access to this subscriber-only article they could share on the web somehow? Thanks!

http://www.interest.co.nz/business/81660/heartland-bank-cfo-details-how-any-big-purchase-such-udc-could-be-funded-says-reverse

If the article lives up to the headline given it by interest.co.nz, one might ask why it was not covered by an HBL announcement to the market:
Heartland Bank CFO details how any big purchase such as UDC could be funded, says reverse mortgage book picking up momentum

[kizame]

If the article lives up to the headline given it by interest.co.nz, one might ask why it was not covered by an HBL announcement to the market:
Heartland Bank CFO details how any big purchase such as UDC could be funded, says reverse mortgage book picking up momentum

Announce what? There is nothing to announce I would have thought? YET.

Momentum in the reverse mortgage business is normal course of events for this growing bank,it's just a sector of their business.

[kizame]

If HBL could pick up UDC it would be an amazing purchase for them,but I seriously doubt with the competition out there that they would pay enough for it.Plus I think ANZ just toying with the marketplace to see what they MAY be able to get for it,I don't know whether they would seriously let it go.
Then there's MTF...

But.. They could sell for short term profit and start another finance company...

[percy]

If HBL could pick up UDC it would be an amazing purchase for them,but I seriously doubt with the competition out there that they would pay enough for it.Plus I think ANZ just toying with the marketplace to see what they MAY be able to get for it,I don't know whether they would seriously let it go.
Then there's MTF...

But.. They could sell for short term profit and start another finance company...

HBL CEO Jeff Greenslade was on the board of UDC.A couple of senior HBL staff members are ex UDC.So HBL know UDC.UDC would be a great fit with HBL.HBL would have to raise capital to buy UDC,,while they could buy MTF with their existing surplus capital.
REL is just another sector HBL are doing well in.I believe new online "open for business" is tracking very well too.Concentrating on new channels customers want will see more customer driven product being offered.The momentum is building.

[nextbigthing]

The momentum is building.

As usual, you're not wrong. All the way to $1.60 by Christmas apparently.

[percy]

I don't know where the sp will be at Christmas,but with "consensus forecast of 9 cents fully imputed in year 2017", I know future growing dividends will go down very nicely every Christmas.
If we go back to the 2/6/2016 Heartland presentation we can see why this momentum is building.
page 6 Heartland Strategy.
Priorities;
Market leadership in digital distribution and digital marketing, to deliver a radically better customer experience based on ease and speed.
Strong systems infrastructures to support Heartland's ambition for growth.

[macduffy]

If HBL could pick up UDC it would be an amazing purchase for them,but I seriously doubt with the competition out there that they would pay enough for it.Plus I think ANZ just toying with the marketplace to see what they MAY be able to get for it,I don't know whether they would seriously let it go.
Then there's MTF...

But.. They could sell for short term profit and start another finance company...

And I seriously doubt that ANZ is just toying with the marketplace here. Esanda, the (much bigger) Australian equivalent of UDC was "let go" recently in what was a clear indication of ANZ's intentions regarding finance company subsidiaries. Certainly, they will be in no hurry if offers don't meet their expectations but a full price from HBL, or others, would see a deal made. IMO.

[Snoopy]

Well I think Snoopy's book is going to be a world first.
A runaway best seller.
Unique.
A business story,along the lines of a murder mystery ,but where the readers have to tell the author who dunit.!!..

Not quite a murder, but certainly a 'Where did the money go?' mystery, now revised and updated into a less than exciting second edition!



Date'Stressed' Loans on the books (X)
Net Financial Receivables (Impairments deducted) (Y)
(X)/(Y) Impaired Asset Expense (V)Write Off (W)
Gross Financial Receivables (Z)
(V)/(Z)
(W)/(Z)


EOHY2012$87.728m$2,075.211m4.23%$1.854m$13.823m$2, 104.591m0.09%0.66%


EO2HY2012$90.489m$2,078.276m4.35%$3.788m$3.993m$2, 105.702m0.18%0.19%


EOHY2013$80.383m$2,044.793m3.93%$5.254m$4.824m$2,0 72.270m0.25%0.23%


EO2HY2013$48.975m$2,010.393m2.43%$17.313m$8.836m$2 ,060.867m0.84%0.43%


EOHY2014$42.498m$1,905.850m2.23%$3.325m$19.046m$1, 940.064m0.17%0.98%


EO2HY2014$41.354m$2,566.039m1.59%$2.570m$19.472m$2 ,631.754m0.10%0.74%


EOHY2015$33.469m$2,722.433m1.23%$5.102m$1.426m$2,7 49.232m0.19%0.05%


EO2HY2015$32.824m$2,862.070m1.15%$7.003m$3.465m$2, 893.724m0.24%0.12%


EOHY2016$29.147m$2,928.601m1.00%$5.610m$14.272m$2, 951.075m0.19%0.48%


Total$51.819m$89.157m


Average0.25%0.43%



I have made this tale less exciting by slowing down the story. It is now told exclusively in bite sized half yearly chunks.

Critically acclaimed by two well known Heartlanders

Percy: "This is the story that no-one wanted to hear, let alone rehear."
Paper Tiger: "Conceived at the bottom of a P G Wodehouse pond. Should have remained there."

Lot's of numbers here. So what does it all mean?

SNOOPY

[K1W1G0LD]

Not quite a murder, but certainly a 'Where did the money go?' mystery, now revised and updated into a less than exciting second edition!



Date'Stressed' Loans on the books (X)
Net Financial Receivables (Impairments deducted) (Y)
(X)/(Y) Impaired Asset Expense (V)Write Off (W)
Gross Financial Receivables (Z)
(V)/(Z)
(W)/(Z)


EOHY2012$87.728m$2,075.211m4.23%$1.854m$13.823m$2, 104.591m0.18%1.32%


EO2HY2012$90.489m$2,078.276m4.35%$3.788m$3.993m$2, 105.702m0.18%0.85%


EOHY2013$80.383m$2,044.793m3.93%$5.254m$4.824m$2,0 72.270m0.50%0.46%


EO2HY2013$48.975m$2,010.393m2.43%$17.313m$8.836m$2 ,060.867m0.84%0.42%


EOHY2014$42.498m$1,905.850m2.23%$3.325m$19.046m$1, 940.064m0.34%1.96%


EO2HY2014$41.354m$2,566.039m1.59%$2.570m$19.472m$2 ,631.754m0.03%1.46%


EOHY2015$33.469m$2,722.433m1.23%$5.102m$1.426m$2,7 49.232m0.38%0.10%


EO2HY2015$32.824m$2,862.070m1.15%$7.003m$3.465m$2, 893.724m0.24%0.12%


EOHY2016$29.147m$2,928.601m1.00%$5.610m$14.272m$2, 951.075m0.38%0.96%



Your literary skills are improving Snoopy , even I can understand that. End result, not getting any worse then, comparatively speaking.

[Snoopy]

Lot's of numbers here. So what does it all mean?


Just to confuse readers, I will start in the middle of the story and ask them to look at column V and column W.

Column V is a measure of what management decide they want to do to adjust the size of the impaired balance bucket, to keep things running smoothly.

Column W is a measure over the same period of what is leaking out of the impaired balance bucket, actual loans written off over that period.

We can expect Column W to be far more lumpy that Column V. This is because actual right offs and the timing of those would not be expected to follow a regular pattern. OTOH taking a longer timeframe and a portfolio view of the loans, we might expect the proportion of loans that become impaired to converge around a steady figure. The impairment provisions are there to bring everything back to this management predicted 'steady state':

Smaller adjustments are needed on average, than actual write offs over the same period.

So if this is what we might expect, what do the numbers actually tell us?

On a half yearly period basis, what I see is pretty much what I expect. But the two totals tell a different story.

Over time I would expect the impairment expenses (what is adding to the bucket) and the write off expenses (what is leaking out of the bucket) to balance out. That doesn't seem to be happening here though. This sort of imbalance can happen over the short to medium term with a healthy total impairment provision (big bucket size). However, over the longer term even the biggest bucket will run dry.

Normalising the results tell a similar story. In proportional terms too, a lot more is flowing out of the impairment bucket than is flowing into it. There are at least a couple of different ways to explain this:

1/ The quality of loans could be getting ever increasingly better.
2/ The annual loan provisioning on average is being underdone, and consequently profit on average is being overstated.

Depending on whether you are a 'fan' or not, that will decide which explanation you choose to accept.

SNOOPY

[Snoopy]

Lot's of numbers here. So what does it all mean?


Our second comparison is between two buckets that have little directly in common. "Stressed Loans" is one of those statistics that I have made up. Making up a statistic can be useful. Because if I am measuring something that management don't measure, it is very unlikely that management will be trying to manipulate it.

"Stressed loans" are a wider collection of problem loans that specifically exclude the impairment provision. All the actual "write offs" come out of the impairment provision. So there is no particular reason for a "stressed loan" measure should correlate with a "write off" measure in any particular period.

Longer term, you might expect that impaired loans arise out of stressed loans. So you might expect some correlation in the "normalised" trend X/Y vs W/Z.

Now X/Y shows a beautifully monotonic reducing proportion, down to a mere 1% at the latest reporting period. The trend for W/Z is less clear, as might be expected from the more highly expected volatility. W/Z numbers tend to be less than X/Y values. That is also expected, because you wouldn't expect all the stressed loans to turn into write off amounts. Many of those stressed loans would eventually recover or at least be eased off the books with no loss for Heartland.

With X/Y representing 'Normalised Stressed Loan Percentage" and W/Z representing "Normalised Write Off Percentage", a table compiled from the above table might make things clearer.



Date
Normalised Stressed Loan Percentage (J)
Normalised Write Off Loan Percentage (K)
(K)/(J)


EOHY20124.23%0.66%16%


EO2HY20124.35%0.19%4.4%


EOHY20133.93%0.23%5.9%


EO2HY20132.43%0.43% 18%


EOHY20142.23%0.98%44%


EO2HY20141.59%0.74%47%


EOHY20151.23%0.05%4%


EO2HY20151.15%0.12%10%


EOHY20161.00%0.48%48%



The table above shows that in general, the actual half yearly right offs (a yes/no decision by management) is looking higher as a proportion of stressed loans (a management qualitative decision). If there were more stressed loans then this broad trend would not be apparent. So even looking outside of the impaired loan box, it seems that the stressed loans are unexpectedly lower than they should be. One conclusion from this is that there is a culture of systematic underestimation of risk that is progressing right through the Heartland loan book. Is this an imminent problem for Heartland? No. But once again the comparative trend implies that declared profits on average are higher than they should be.

SNOOPY

[percy]

Not quite a murder, but certainly a 'Where did the money go?' mystery, now revised and updated into a less than exciting second edition!



Percy: "This is the story that no-one wanted to hear, let alone rehear."


Lot's of numbers here. So what does it all mean?

SNOOPY

After all said and done there has been more said than done.
The answer you are looking for is;
Bad debt ratio.2012 0.5%..2013 0.04%.2014 0.03% and 2015 0.02%..It is clear the ratio is reducing,which is very positive..
A postscript ,
While bad debt ratio has been decreasing The Net Interest Margin has been increasing.
NIM ratio.2012 4.0%.2013 4.2%.2014 4.2%,2015 4.4%.Fantastic.
Makes me look forward with a sense of excitement to the 2016 result which will be announced late August.Just over two months away.
Be careful your book is not out of date before you finish it.!.lol.

[Snoopy]

The answer you are looking for is;
Bad debt ratio.2012 0.5%..2013 0.04%.2014 0.03% and 2015 0.02%..It is clear the ratio is reducing,which is very positive..


The above is from p8 in the June 2nd shareholder presentation Percy. The small print foot note gives more information you should consider.

"(1) Bad debt ratio includes: Impaired asset expense and Decrease in fair value of investment properties; 2013 added back change in strategy provisions ($18.0m)"

Look at note 19e in the annual report Percy (AR2015). The impaired asset expense comes from there. This figure is actually a judgement from management. It bears little relation to the actual write off of bad debts in each year. Management can manipulate this "Impaired Asset Expense" figure within certain boundaries to present a picture they want shareholders to see.

SNOOPY

[percy]

. Management can manipulate this "Impaired Asset Expense" figure within certain boundaries to present a picture they want shareholders to see.

SNOOPY

As do every bank in Australasia.
They all have their accountants audited .I can't remember any of them having them qualified.
Investors and shareholders do have "the peace of mind security" in knowing all banks in NZ have to report quarterly to The Reserve Bank of New Zealand,are monitored by rating agencies,KMPG and brokerage houses.

[Snoopy]

As do every bank in Australasia.
They all have their accountants audited. I can't remember any of them having them qualified.
Investors and shareholders do have "the peace of mind security" in knowing all banks in NZ have to report quarterly to The Reserve Bank of New Zealand,are monitored by rating agencies, KMPG and brokerage houses.


Well I'm calling out the figures that you have transcribed from the Heartland presentation Percy as being ten times less that Heartland said! I have also redone my own calculated figures on an annual basis so you can see how they match up with Heartland's claims:



FY2012FY2013FY2014FY2015


Bad Debt Ratio (Heartland)0.5%0.4%0.3%0.2%


Actual Write Off Ratio (Snoopy)0.84%0.66%1.46%0.17%



Now you could say that even my actual write off ratio is showing a favourable trend, if you take out the FY2014 blip. But we already have a high figure for HY2016 (not shown in my annual chart) which will see my 'downward trend' well and truly broken once the FY2016 results come in.

I am not accusing Heartland of putting out 'wrong' figures. I am sure they are satisfying all their legal requirements as regards reserve bank compliance. I am saying that selecting the figures they have, and massaging out one off property losses in 2013, such that bad debts are apparently on a steady downward trend is a disingenuous presentation of the facts.

There is no reserve bank requirement to present the multi year table they did, for reserve bank reporting purposes. And if they produce the same table incorporating FY2016 results for this year's results presentation, I think it will show the downward trend in bad debts - in the most general sense- has well and truly ceased, if it ever existed.

SNOOPY

[percy]

Take your concerns up with HBL's auditors.

[Arbroath]

Snoopy,

I really enjoy reading your posts as it is always important to consider alternative or critical points of view. My summation of Heartland would be as follows (disc: I'm an ex-banker)...
- the company in its present state represents something of a roll-up with the mergers and acquisitions that have occurred over the past 5 years. This clouds the trend analysis and there is no doubt they have neutralised several areas of weakness in property and the loan book but there will likely be some pockets of weakness they are still carrying.
- in my view management have done a sound job tidying up the loan books and growing new business lines and this has been rewarded with increased profits, dividends and a rising share price.
- however, in the next downturn there will definitely be some skeletons in the closet. It is natural for management to underestimate provisioning if there is a sharp recession but remember economists have predicted 9 of the last 3 recessions and Australian and NZ bank management generally overestimate provisioning across the cycle and are only caught out in a late 80's bubble (BNZ) or severe recession (1991-92).
- the equation to consider is overall loan quality across the book keeping in mind the NIM is 4%+. Heartland should suffer higher loan write-offs than the main banks due to the nature of there lending book. All of this can be factored into the price one pays for the stock. My personal opinion is $1.20 or thereabouts compensates for the risks around loan quality given their capital position and profit generating ability. Of course a sharp recession would probably see the share price back to $0.70-0.80 maybe if it started now but if its another 5 years away that's 5 years of 9-10cps dividends and a share price that might be retreating from $1.50+

As they say timing is everything and who knows when the next economy wide recession will be (as opposed to just dairy)

[kizame]

Snoopy,

I really enjoy reading your posts as it is always important to consider alternative or critical points of view. My summation of Heartland would be as follows (disc: I'm an ex-banker)...
- the company in its present state represents something of a roll-up with the mergers and acquisitions that have occurred over the past 5 years. This clouds the trend analysis and there is no doubt they have neutralised several areas of weakness in property and the loan book but there will likely be some pockets of weakness they are still carrying.
- in my view management have done a sound job tidying up the loan books and growing new business lines and this has been rewarded with increased profits, dividends and a rising share price.
- however, in the next downturn there will definitely be some skeletons in the closet. It is natural for management to underestimate provisioning if there is a sharp recession but remember economists have predicted 9 of the last 3 recessions and Australian and NZ bank management generally overestimate provisioning across the cycle and are only caught out in a late 80's bubble (BNZ) or severe recession (1991-92).
- the equation to consider is overall loan quality across the book keeping in mind the NIM is 4%+. Heartland should suffer higher loan write-offs than the main banks due to the nature of there lending book. All of this can be factored into the price one pays for the stock. My personal opinion is $1.20 or thereabouts compensates for the risks around loan quality given their capital position and profit generating ability. Of course a sharp recession would probably see the share price back to $0.70-0.80 maybe if it started now but if its another 5 years away that's 5 years of 9-10cps dividends and a share price that might be retreating from $1.50+

As they say timing is everything and who knows when the next economy wide recession will be (as opposed to just dairy)

Or maybe 3 of the last 9 recessions. You would think they could do better than that.

[kiora]

Or maybe 3 of the last 9 recessions. You would think they could do better than that.

Or maybe economists predicted 9 recessions but there was only 3 ? :confused:

[percy]

Motor Trade Finance has rejected all offers from parties looking to acquire all or part of their business,saying they undervalued the business.
Interesting?

[winner69]

Or maybe economists predicted 9 recessions but there was only 3 ? :confused:



Phrase attributed to the Nobel-winning economist Paul Samuelson in the 60's when he quipped that the stock market had “predicted nine out of the last five recessions,” .......and since then the phrase is often used to to disparage the predictive power of markets (and economists)

[iceman]

Motor Trade Finance has rejected all offers from parties looking to acquire all or part of their business,saying they undervalued the business.
Interesting?

Where did you find this info ? I can't find anything about it in online media

[Joshuatree]

The source of course:) NZX website go to NZDX where MTF is listed and made the announcement MTF Market testing process concludes (https://www.nzx.com/companies/MTF/announcements/284515)

[winner69]

Abit more

http://www.nbr.co.nz/article/motor-trade-finance-rejects-takeover-offers-too-low-b-190719

[King1212]

Where did you find this info ? I can't find anything about it in online media

http://www.nbr.co.nz/article/motor-trade-finance-rejects-takeover-offers-too-low-b-190719

[King1212]

A bit of selling today...maybe snoopy scared them off?

[zs_cecil]

no MTF buy out means HBL share buy back is back on the table?

[King1212]

Good job snoopy...you got what u wish for....

[Bjauck]

no MTF buy out means HBL share buy back is back on the table?
What about UDC?

[zs_cecil]

What about UDC?
Even if ANZ is seriously selling UDC, not sure if HBL really wants to go down the path of massive capital raise to do this kind of takeover considering its current level of excessive capital and the market value of UDC.

Maybe it is more realistic for HBL to look for an MTF alternative other than UDC?

[Snoopy]

- the equation to consider is overall loan quality across the book keeping in mind the NIM is 4%+. Heartland should suffer higher loan write-offs than the main banks due to the nature of there lending book. All of this can be factored into the price one pays for the stock. My personal opinion is $1.20 or thereabouts compensates for the risks around loan quality given their capital position and profit generating ability.


I think this is the right way to look at things Arbroath.

Some here think my presence on this thread is to cut down Heartland at every announcement. But actually I am trying to get a good measure on any announcement hype. Then once I get a value on the hype, I can make an adjustment to the declared profit numbers. Once I have a measure of "Snoopy adjusted underlying profit" (SAUP), then I can make a decision on the value of an investment in Heartland at this time. You say that $1.20 is a sufficient discount to compensate for all the risks, and this is your considered view. Fair enough.

My measure of 'profit overhype' , I measure from the difference between the 'impaired asset expense' and the 'loans written off' over a longer period. We have representative results for four years or so now.

'Total impaired asset expense' - 'Total loans written off'

= $37.338m - $51.819m = -$14.481m over 4.5 years (pre tax)

This represents an annual profit adjustment of:

-$14.481m / 4.5 = -$3.218m /year (pre tax)

Post tax this will reduce NPAT by

-$3.218m x 0.72= -$2.317m per year

So at last we are in a position to look at the Heartland 'SAUP"!

SNOOPY

[Snoopy]

So at last we are in a position to look at the Heartland 'SAUP"!




FY2012FY2013FY2014FY2015FY2016(f)


NPAT (Heartland Adjusted)$14.006m$24.408m$36.039m$48.163m$55m


Snoopy Additional Annual Impairment Adjustment-$2.317m-$2.317m-$2.317m-$2.317m-$2.317m



Heartland SAUP$11.689m$22.181m$33.722m$45.846m$52.683m




Note: Heartland's own adjusted profits from declared results are calculated as follows:

2012: $22.606m - $9.6m = $14.006m
2013: $6.912m + 0.72($18.0m+$6.1m+$0.2m) = $24.408m

-----
No. shares on issue 476.5m (5th April 2016)
=> Historical eps = $45.846m / 476.5m = 9.6cps

Share price $1.26 (23rd June)
=> Historical PE valuation = 126/9.6 = 13.0
----

----
No. shares on issue 476.5m (5th April 2016)
=> Forecast eps = $52.683m / 476.5m = 11.0cps

Share price $1.26 (23rd June)
=> Forecast PE valuation = 126/11.0 = 11.4
----

In this current market that $1.26 closing price looks about right. Not cheap but neither is it expensive.

I like to buy banks on a PE of about 10. So my target investment price for Heartland is around $1.10. Personally, I am not interested in investment above that price level. But if I held already, I probably wouldn't sell at $1.26.

SNOOPY

[percy]

[QUOTE=Snoopy;625664].

Some here think my presence on this thread is to cut down Heartland at every announcement.

Well Snoopy go back over 4 years,and history would show people who thought that were right..
HNZ will not get a banking licence.
HNZ do not have enough capital.
HNZ will need to raise capital.
HNZ will not realise the legacy property.
HNZ will not be able to pay dividends.
The list goes on and on.
We have been lucky to have had posters such as Sparky the Clown,and Paper Tiger to correct your mistakes.You have wasted a lot of their time.
In the meantime Heartland Bank keep delivering on what they say they will do.

[Snoopy]

Snoopy wrote:
"Some here think my presence on this thread is to cut down Heartland at every announcement."

Well Snoopy go back over 4 years,and history would show people who thought that were right..
HNZ will not get a banking licence.


I am still puzzled by the timing of the issuing of Heartland's bank licence. Reserve Bank rules clearly state that three years of trading history is required. Heartland did not have this when granted their banking licence. The banking licence was granted by Graeme Wheeler, within weeks of the new Reserve Bank governor taking up office. I still think Wheeler came into his office, saw a pile of forms in his "in tray" and just signed them off! He didn't want to rock the boat during his first few days on the job you see...... But that's just my story!



HNZ do not have enough capital.
HNZ will need to raise capital.
HNZ will not realise the legacy property.


The above three are tied together. That Heartland were able to reduce their non core property portfolio so well was due to the rampant property market. If the property market had not gone so well, they may have indeed needed more capital.



HNZ will not be able to pay dividends.


If you are raising capital, it does not make sense to pay taxable dividends at the same time. I think all my comments made sense in context at the time I wrote them.

SNOOPY

[King1212]

I am still puzzled by the timing of the issuing of Heartland's bank licence. Because reserve bank rules clearly state that three years of trading history is required. Heartland did not have this when granted their banking licence. The banking licence was granted by Graeme Wheeler, within weeks of the new Reserve Bank governor taking up office. I still think Wheeler came into his office, saw a pile of forms in his in try and just signed them off.


You must be in high if you think like that?

[percy]

I think all my comments made sense in context at the time I wrote them.

SNOOPY

They never made sense to me. lol.

[K1W1G0LD]

I was sitting in front of the Corona late one balmy evening , picking my nose , just kicking the sh?t around; having just completed reading the last chapter of the “Never Ending Story”, Snoopy’s latest Tome about the famous in New Ziland little Heartland Bank.
When a thought occured , is this a glass half full scenario? No came the reply , the glass is only half full because you keep topping it up with whisky , it’s really leaking like a sieve , just like that worm eaten hulk you call a boat.
Yeah, what can I say, what with the downturn in pirating it does’nt pay as well as it used to and to earn a mouldy crust I had to turn my hand to something/no anything else????????
Whilst glancing at the latest Wormwood Scrubs Digest, I spied thru the monocle over my good eyepatch a tasty little position available for a freelance journalist at the local office of the esteemed “Shaggers Gazette” .
Aha, that’s the post for a man of my many unaccomplished talents I thought. So to make a short story long, here I sit reviewing Snoopy’s new unabridged pecial collectors/investors wordy masterpiece what he has writ the “Never Ending Story” for that well respected pillar of modern literary publishing the “Shaggers Gazette”.
Bloody good mate, wildly inaccurate but filled with spicy innuendo, meatballs and lashings of gravy and bacon, jargonistic/hedonistic claptrap but brilliantly conceived and executed all the same and sure to be another best seller and favorite at the little Heartland Bank Xmas barbeque and I’m sure a shoo in for a Pulitzer/book club daily award.
So there you have it Snoopy, well done , just don’t let this high praise go to your head, or anywhere else on your personage. And don’t spend all of the $5 voucher on booze and broads.


NEWSFLASH SNOOPY WINS BOOK OF THE DAY PRIZE

[percy]

[QUOTE=Snoopy;625669]I am still puzzled by the timing of the issuing of Heartland's bank licence. Reserve Bank rules clearly state that three years of trading history is required. Heartland did not have this when granted their banking licence. The banking licence was granted by Graeme Wheeler, within weeks of the new Reserve Bank governor taking up office. I still think Wheeler came into his office, saw a pile of forms in his "in tray" and just signed them off! He didn't want to rock the boat during his first few days on the job you see...... But that's just my story!

Heartland had been negotiating with The Reserve Bank for a considerable time.They knew what The Reserve Bank required from them.They were audited and audited and audited to make sure they complied with everything The Reserve Bank required of them.
They announced they were applying for a bank licence. I believe the way it works is you don't apply until The Reserve Bank tells you.
Heartland Chairman told shareholders at the agm they had applied for it and would get.I posted this information at the time,you may recall.
Your comments on Graeme Wheeler "just signing a pile of papers" don't make your story any more convincing.?

[iceman]

[QUOTE=Snoopy;625669]I am still puzzled by the timing of the issuing of Heartland's bank licence. Reserve Bank rules clearly state that three years of trading history is required. Heartland did not have this when granted their banking licence. The banking licence was granted by Graeme Wheeler, within weeks of the new Reserve Bank governor taking up office. I still think Wheeler came into his office, saw a pile of forms in his "in tray" and just signed them off! He didn't want to rock the boat during his first few days on the job you see...... But that's just my story!

Heartland had been negotiating with The Reserve Bank for a considerable time.They knew what The Reserve Bank required from them.They were audited and audited and audited to make sure they complied with everything The Reserve Bank required of them.
They announced they were applying for a bank licence. I believe the way it works is you don't apply until The Reserve Bank tells you.
Heartland Chairman told shareholders at the agm they had applied for it and would get.I posted this information at the time,you may recall.
Your comments on Graeme Wheeler "just signing a pile of papers" don't make your story any more convincing.?

Percy I appreciate your stamina with this debate. But I think people making comments like Snoopy has above should be directed a long way back on this thread to try to understand it better. But hang on, he was already commenting on it back then !!! It is not what we should be discussing today with Heartland. I'm more interested in whether we will get MTF or not or Heartland Directors down the track have been right to stick to their published view of not paying too much for any acquisitions

[percy]

[QUOTE=percy;625682]

Percy I appreciate your stamina with this debate. But I think people making comments like Snoopy has above should be directed a long way back on this thread to try to understand it better. But hang on, he was already commenting on it back then !!! It is not what we should be discussing today with Heartland. I'm more interested in whether we will get MTF or not or Heartland Directors down the track have been right to stick to their published view of not paying too much for any acquisitions

In post # 7797 Snoopy said,"Some here think my presence on this thread is to cut down Heartland at every announcement."
I only pointed out that history over the past 4 years would confirm that this was in fact the case,and gave some examples.
As far as MTF is concerned Heartland have been turned down because they are not prepared to pay too much.So as always they are doing what they say they will do.

[macduffy]

Hi Snoopy. I'm puzzled by your statement that the RBNZ requires three years' trading history before considering granting a banking licence. Where in the Act or the RB's published "requirements" do I find this?

[Snoopy]

Hi Snoopy. I'm puzzled by your statement that the RBNZ requires three years' trading history before considering granting a banking licence. Where in the Act or the RB's published "requirements" do I find this?

This is the link to the Reserve Bank's:

"Application for Status as a Registered Bank"

http://www.rbnz.govt.nz/-/media/ReserveBank/Files/regulation-and-supervision/banks/banking-supervision-handbook/3564868.pdf

Look at clause 10c. The 'parent company' at that time was the listed Heartland, because this was before the merger of what would become 'Heartland Bank' to listed Heartland.

SNOOPY

[macduffy]

Thanks, Snoopy.

"Financial accounts for the parent company or bank for the last three years."

A matter of interpretation of "parent company", I guess!

[Snoopy]

Thanks, Snoopy.

"Financial accounts for the parent company or bank for the last three years."

A matter of interpretation of "parent company", I guess!

Heartland formed on 7th January 2011, with the combination of CBS Canterbury, MARAC and Southern Cross Building Society. First balance date was 30th June 2011. First full year balance date was 30th June 2012. Graeme Wheeler takes top job at the Reserve Bank on 26th September 2012. Heartland becomes a registered bank on 17th December 2012. So final Heartland approval must have been underway as Wheeler was walking in the door.

Three years previous results must have come from FY2012, FY2011 and FY2010 (YE 30th June 2010, before Heartland existed). All I can say is the reserve bank must have been particularly generous in their interpretation of what Heartland was. They must have regarded "CBS Canterbury" as Heartland in drag!

SNOOPY

[winner69]

Market seems to have understood what Snoopy was saying about Heartland and rerating them as a consequence.

Share price below the 100MA and 200MA at the moment - TA signals could signal more of a sell off.

Next week could be interesting.

[percy]

Market seems to have understood what Snoopy was saying about Heartland and rerating them as a consequence.

Share price below the 100MA and 200MA at the moment - TA signals could signal more of a sell off.

Next week could be interesting.

I think you are correct.
The correlation between Heartland's fall of 4.8% has affect ANZ down 4.9% today,and Westpac down 4.5% .
As I think he holds ANZ you could say he has shot himself in the foot.!!!..
That should be good for at least another two chapters in his book?.lol..

[Baa_Baa]

Market seems to have understood what Snoopy was saying about Heartland and rerating them as a consequence.

Share price below the 100MA and 200MA at the moment - TA signals could signal more of a sell off.

Next week could be interesting.

Lol, what a load of nonsense. :t_down:

Conveniently you're ignoring Brexit Day on a crusade to discredit. Almost everything is down today, especially banks, and the 4.76% HBL collapse to $1.20 is below the 200MA at $1.23. In fact even without Brexit, HBL is in a confirmed long term down trend after failing June 14 at the long term declining price trend line and fell below the short term rising support trend line from Feb'16. Now because of Brexit it's just hurting more, so let's see if some tasty morsels are offered up around long support between $1.09 and $1.06.

[Beagle]

Lol, what a load of nonsense. :t_down:

Conveniently you're ignoring Brexit Day on a crusade to discredit. Almost everything is down today, especially banks, and the 4.76% HBL collapse to $1.20 is below the 200MA at $1.23. In fact even without Brexit, HBL is in a confirmed long term down trend after failing June 14 at the long term declining price trend line and fell below the short term rising support trend line from Feb'16. Now because of Brexit it's just hurting more, so let's see if some tasty morsels are offered up around long support between $1.09 and $1.06.

Brexit puts significant pressure on the European banking system and by extension the worldwide banking system. In a risk averse market it seems quite logical to me that banks with a credit rating toward the lower end of the invest grade spectrum would get hit the hardest. Some of the other large NZX falls are much more difficult to understand.

[percy]

Brexit puts significant pressure on the European banking system and by extension the worldwide banking system. In a risk averse market it seems quite logical to me that banks with a credit rating toward the lower end of the invest grade spectrum would get hit the hardest.
So on your judgement ANZ is at the lowest end because it fell 4.9% today ,and Westpac is at the highest because it only only fell 4.5%!!!!!!!!!!!!!!!!.Heartland fell 4.8% so is better than ANZ,but not as good as Westpac?.
Maybe the fact ANZ has the largest exposure to the Auckland property market has added to their woes...lol.

[stoploss]

Think ASB has the largest exposure to the Auck market Percy ..., always seemed to be a bit like AMI & CHCH to me .....

[percy]

Think ASB has the largest exposure to the Auck market Percy ..., always seemed to be a bit like AMI & CHCH to me .....

I was going from The NZ Herald article headed;
"ANZ wins battle of the mortgages as Auckland's real estate market faces cut-throat rivalry."

[stoploss]

I was going from The NZ Herald article headed;
"ANZ wins battle of the mortgages as Auckland's real estate market faces cut-throat rivalry."
Have to read it carefully as a bit misleading . It does say ANZ set to take over as #1... But not there yet . However if they keep lending at current rates they will get there ....sorry to split hairs , probably a good thing for us if ASB scales its % back a bit

[percy]

Have to read it carefully as a bit misleading . It does say ANZ set to take over as #1... But not there yet . However if they keep lending at current rates they will get there ....sorry to split hairs , probably a good thing for us if ASB scales its % back a bit

Don't mind you splitting hairs and putting me right.!!
I am just really pleased Heartland Bank are not joining in the madness.
Do you think with the British exit ,the Australian Banks may have to pay the Europeans more for their wholesale funding?

[stoploss]

Don't mind you splitting hairs and putting me right.!!
I am just really pleased Heartland Bank are not joining in the madness.
Do you think with the British exit ,the Australian Banks may have to pay the Europeans more for their wholesale funding?
Think this has a long way to play out , but yes that is a distinct possibility .

[Beagle]

So on your judgement ANZ is at the lowest end because it fell 4.9% today ,and Westpac is at the highest because it only only fell 4.5%!!!!!!!!!!!!!!!!.Heartland fell 4.8% so is better than ANZ,but not as good as Westpac?.
Maybe the fact ANZ has the largest exposure to the Auckland property market has added to their woes...lol.

On the Australian market which had two more hours to absorb the news and is far more liquid with over 14m shares changing hands in ANZ today, they fell 4.1%. NAB down 3.8% and WBC on the Aussie market down 4.5%. Heartland trading had less time to absorb the bad news but fell more. I expect a flight to the safest possible banks and in particular deposits to Government guaranteed Kiwi bonds to gain strong momentum, (no lol, nothing to laugh about today).

[mouse]

On the Australian market which had two more hours to absorb the news and is far more liquid with over 14m shares changing hands in ANZ today, they fell 4.1%. NAB down 3.8% and WBC on the Aussie market down 4.5%. Heartland trading had less time to absorb the bad news but fell more. I expect a flight to the safest possible banks and in particular deposits to Government guaranteed Kiwi bonds to gain strong momentum, (no lol, nothing to laugh about today).

I think it is the best news for almost 40 years. Hurrah.

[percy]

On the Australian market which had two more hours to absorb the news and is far more liquid with over 14m shares changing hands in ANZ today, they fell 4.1%. NAB down 3.8% and WBC on the Aussie market down 4.5%. Heartland trading had less time to absorb the bad news but fell more. I expect a flight to the safest possible banks and in particular deposits to Government guaranteed Kiwi bonds to gain strong momentum, (no lol, nothing to laugh about today).

My figures were based on the NZ market as it is the only market where all three trade,.
Therefore the three had the same time to react to the same news.
Traded today on NZX;
ANZ $2,470,355
HBL, $1,518,348
WBC.$4,245,192

[ziggy415]

on the brighter side...at these prices Snoopy will now become a hbl holder and only positive posts will be in his book

[percy]

on the brighter side...at these prices Snoopy will now become a hbl holder and only positive posts will be in his book
I don't think so.
He will need to keep a good amount of money to one side,as he may have to defend himself, against the possibly libelous statements he made about The Governor of The Reserve Bank of New Zealand in his post #7800.
The directors of Heartland Bank would most probably join the party too.

[kizame]

I don't mind snoopy posting,but when I see his post is the last in the index I don't go there to read it,honestly it's just too technical for me.
if you analysed all the stocks like that,how many would you come away with that you could make a positive investment decision on.
I have made a bit of money from time to time with HBL,but if I took those sorts of posts seriously for my decisions I would be institutionalised,in the ward for people whom Just don't get it.

No offence Snoopy.

[King1212]

I don't mind snoopy posting,but when I see his post is the last in the index I don't go there to read it,honestly it's just too technical for me.
if you analysed all the stocks like that,how many would you come away with that you could make a positive investment decision on.
I have made a bit of money from time to time with HBL,but if I took those sorts of posts seriously for my decisions I would be institutionalised,in the ward for people whom Just don't get it.

No offence Snoopy.

agree with u...every stock has its own risks....if don't want the risks...put the money in term deposit the...isn't it?

[BlackPeter]

I don't mind snoopy posting,but when I see his post is the last in the index I don't go there to read it,honestly it's just too technical for me.
if you analysed all the stocks like that,how many would you come away with that you could make a positive investment decision on.
I have made a bit of money from time to time with HBL,but if I took those sorts of posts seriously for my decisions I would be institutionalised,in the ward for people whom Just don't get it.

No offence Snoopy.

Bit harsh .... while I don't always agree with Snoopy's sentiments do I see his posts as a great contribution to this forum (and thread).

Sure - it might be hard for everybody to do this level of analysis for every stock in a diversified portfolio ... but this makes it so valuable if others share their analysis with us on this forum. This does not mean that we should accept anything without own research and further scrutiny, but it means it gives us a first hint that there might be other things worthwhile to research ... or alternatively it might give us more confidence in one particular area.

What Snoopy is essentially doing is just turning the torch into dark corners of the stock under question and shining some light into them. He tells us how he interprets what he sees - and we may or may not agree with his interpretation, but at least do we have than a choice to revisit the corners he looked into or we can choose to dismiss his findings (and yes, he is not always right, but than - who is)?

So - please Snoopy, continue to share your findings and analysis with us ... and for anybody who feels overwhelmed by some of his close scrutiny or who prefers to put the head into the sand ... there is always the ignore-list or you can just close your eyes and dream.

Discl: hold HNZ and think about accumulating (thanks to clown Boris & his idiots) ... but still prefer to learn about potential (and real) warts prior to them blowing up into my face;

[percy]

Researching stocks takes time and expierence.A great deal of reading,and understanding what you are reading.Attending annual general meetings,company presentations and speaking to the CEO or CFO to get clarity on any issue I do not understand.The better the research,the better the results.
It is very easy to compare what companies achieve, with what they say they will do.
The same came be done with sharetrader.Any one can read a thread from start to finish, and then they have an idea of who knows what they are talking about.Easy. Yet so many just don't bother and are left wondering why they get it wrong.

[King1212]

Researching stocks takes time and expierence.A great deal of reading,and understanding what you are reading.Attending annual general meetings,company presentations and speaking to the CEO or CFO to get clarity on any issue I do not understand.The better the research,the better the results.
It is very easy to compare what companies achieve, with what they say they will do.
The same came be done with sharetrader.Any one can read a thread from start to finish, and then they have an idea of who knows what they are talking about.Easy. Yet so many just don't bother and are left wondering why they get it wrong.


Percy,,I admire you in investing stock market...u did take time in researching companies that u invested....I remembered last time you recommended me TIL...when it was still $2 ish...I totally ignored it..n now...look at TIL....gutted...

[kizame]

Bit harsh .... while I don't always agree with Snoopy's sentiments do I see his posts as a great contribution to this forum (and thread).

Sure - it might be hard for everybody to do this level of analysis for every stock in a diversified portfolio ... but this makes it so valuable if others share their analysis with us on this forum. This does not mean that we should accept anything without own research and further scrutiny, but it means it gives us a first hint that there might be other things worthwhile to research ... or alternatively it might give us more confidence in one particular area.

What Snoopy is essentially doing is just turning the torch into dark corners of the stock under question and shining some light into them. He tells us how he interprets what he sees - and we may or may not agree with his interpretation, but at least do we have than a choice to revisit the corners he looked into or we can choose to dismiss his findings (and yes, he is not always right, but than - who is)?

So - please Snoopy, continue to share your findings and analysis with us ... and for anybody who feels overwhelmed by some of his close scrutiny or who prefers to put the head into the sand ... there is always the ignore-list or you can just close your eyes and dream.

Discl: hold HNZ and think about accumulating (thanks to clown Boris & his idiots) ... but still prefer to learn about potential (and real) warts prior to them blowing up into my face;

I don't think it's harsh at all,just telling it like it is, for me.
Snoopy has a right to post whatever he likes on the subject,but to delve into the balance sheet and financials so deeply really for me,is an aside to what is actually happening with the shareprice,and apart from basic fundamentals and the outlook for the company over the next year,that is all I need to make an investment for whatever timeframe I'm happy with. And I do presume others do enjoy the friendly banter with him regarding his analysis.

[beetills]

A lot of small trades today.iS THAT MORMAL OR HAVE I MISSED SOMETHING.

[Beagle]

Bit harsh .... while I don't always agree with Snoopy's sentiments do I see his posts as a great contribution to this forum (and thread).

Sure - it might be hard for everybody to do this level of analysis for every stock in a diversified portfolio ... but this makes it so valuable if others share their analysis with us on this forum. This does not mean that we should accept anything without own research and further scrutiny, but it means it gives us a first hint that there might be other things worthwhile to research ... or alternatively it might give us more confidence in one particular area.

What Snoopy is essentially doing is just turning the torch into dark corners of the stock under question and shining some light into them. He tells us how he interprets what he sees - and we may or may not agree with his interpretation, but at least do we have than a choice to revisit the corners he looked into or we can choose to dismiss his findings (and yes, he is not always right, but than - who is)?

So - please Snoopy, continue to share your findings and analysis with us ... and for anybody who feels overwhelmed by some of his close scrutiny or who prefers to put the head into the sand ... there is always the ignore-list or you can just close your eyes and dream.

Discl: hold HNZ and think about accumulating (thanks to clown Boris & his idiots) ... but still prefer to learn about potential (and real) warts prior to them blowing up into my face;

Good post BP. I also enjoy reading the results of the resident Beagle dog's foraging. He's get's his furry snout into places some don't like to examine and has a reasonably good nose for sniffing out decaying rat's lying in dark corners. Don't always agree with him but I enjoy watching his work just as much as watching the Beagle dog's at the airport go about their work.

[ziggy415]

Good post BP. I also enjoy reading the results of the resident Beagle dog's foraging. He's get's his furry snout into places some don't like to examine and has a reasonably good nose for sniffing out decaying rat's lying in dark corners. Don't always agree with him but I enjoy watching his work just as much as watching the Beagle dog's at the airport go about their work.

is snoopy happy with a rub to his tummy and a play with a string bone for all his hard work

[Beagle]

is snoopy happy with a rub to his tummy and a play with a string bone for all his hard work

I had the real pleasure of owning a beagle for 11 years so I think I can say with quite some authority that they seem to derive their own pleasure simply from getting their snout into all sorts of different places. They really seem to get off on discovering new scents and trails to follow and I think the resident beagle is no exception to the breed. Not so sure about the tummy rub thing, Kelly never seemed to like that all that much but I can assure you Sidney Silky Terriers absolutely love that :) All dogs like a good pat from time to time. I admire his tenacity.

[mouse]

A lot of small trades today.iS THAT MORMAL OR HAVE I MISSED SOMETHING.

DON'T PANIC!!!!!!!!!!!!!
Actually, it might become even cheaper. But, then again, could get much worse. Flick a coin for the answer!
BUT, if people want to get out of sterling or whatever, to put it into the Kiwi, they might put it in shares.
Again, flick a coin.
BUT there will be winners and losers from this lot.
I have no clue which I shall be!
Advice please.

[percy]

It is a fact that companies whose ROE and eps increase,have the capacity to pay increasing dividends, will see their share price increase.
In today's environment of on going low interest rates, the market is looking for companies with strong balance sheets,that are paying good dividends,and have the capacity to increase them.
I see Heartland fitting the bill on all measures.
No need for flicking coins when you have done sound research.I leave that to Tossers.

[janner]

No need for flicking coins when you have done sound research.I leave that to Tossers.

Well put :-)))

[ziggy415]

It is a fact that companies whose ROE and eps increase,have the capacity to pay increasing dividends, will see their share price increase.
In today's environment of on going low interest rates, the market is looking for companies with strong balance sheets,that are paying good dividends,and have the capacity to increase them.
I see Heartland fitting the bill on all measures.
No need for flicking coins when you have done sound research.I leave that to Tossers.

Has Brexit realy changed anything with regards to new zealand....the potential down the track maybe with regards to higher interest rates, but for now nz will keep trucking along....we will get trade deals with europe and britain on similar terms as now....bargains abound on the nzx

[Snoopy]

A problem is bank balance dates provide a snapshot of what is happening. But a 'snapshot of impaired assets' is just that. Impaired assets are dynamic and changing. From an investment perspective I want to know what will happen in the future.


For this morning's 'question of the day' I am reverting to my favourite subject - impairment :-) - and specifically the non-core property portfolio of FY2013 (or is that the non-core dairy portfolio of FY2017).

Now, a Heartland banker who makes an impairment provision is seen as

A/ prudent, far sighted, managing debts to best practice and responsible.

OTOH a Heartland banker who has to write off a loan is seen as

B/ reckless, lacking in due diligence, ill disciplined and squandering resources.

Now the curious bit. At the end of the day whether a loan is written off in advance by 'provisioning' or written off immediately in an 'expense' makes no difference to the long term position of Heartland bank. So my question is, are Heartland's senior loan managers best characterised by A/ or B/ ?

SNOOPY

[BlackPeter]

Has Brexit realy changed anything with regards to new zealand....the potential down the track maybe with regards to higher interest rates, but for now nz will keep trucking along....we will get trade deals with europe and britain on similar terms as now....bargains abound on the nzx

Well, yes - BREXIT has changed some things re NZ markets:

* NZD went up ... i.e. reserve bank likely to further drop interest rates.
* British consumers have less money (due to dropping pound sterling) - i.e. British consumers can buy less (including from us). This will impact our exports as well as tourism; Might impact as well on our housing market (potentially more UK immigrants but with less money), which may or may not be a good thing;
* British unemployment is going to rise (well, this is not just common sense, but as well what the crown analysts predicted (check out the links hoop posted) - i.e. less money for the British consumer - consequences see above.
* NZ just negotiating a free trade deal with EU. Getting too cosy with Britain during this time might impact on our chances to be successful with the continent. Will be an interesting balancing act;

Still agree, that we have at this stage likely some bargains in our stock market ... this is unless the British disease is spreading.

[winner69]

For this morning's 'question of the day' I am reverting to my favourite subject - impairment :-) - and specifically the non-core property portfolio of FY2013 (or is that the non-core dairy portfolio of FY2017).

Now, a Heartland banker who makes an impairment provision is seen as

A/ prudent, far sighted, managing debts to best practice and responsible.

OTOH a Heartland banker who has to write off a loan is seen as

B/ reckless, lacking in due diligence, ill disciplined and squandering resources.

Now the curious bit. At the end of the day whether a loan is written off in advance by 'provisioning' or written off immediately in an 'expense' makes no difference to the long term position of Heartland bank. So my question is, are Heartland's senior loan managers best characterised by A/ or B/ ?

SNOOPY

Good question

I reckon A ........as long s it's seen as proactive provisioning to smooth earnings growth

[percy]

Has Brexit realy changed anything with regards to new zealand....the potential down the track maybe with regards to higher interest rates, but for now nz will keep trucking along....we will get trade deals with europe and britain on similar terms as now....bargains abound on the nzx

Brexit and Heartland.
Funding;Unlike the Aussie banks HBL does not rely on any European wholesale funding.So no funding problems for Heartland,who have 38,000 individual depositors,19,000 of whom have been with Heartland for 10 years or more..
Interest rates;Should interest rates increase all banks, including Heartland, will do well as their margins increase.
....................;Should interest rates stay low,Heartland has been steadily improving their net interest margin over the past four years and that looks set to continue.
......................With their capacity to grow dividends [projected to be 9cents per share fully imputed for 2017] ,strong equity ratio,I would think investors will be attracted to Heartland.From what I have read The Reserve Bank of NZ is more likely to reduce interest rates than increase them

[mouse]

It is a fact that companies whose ROE and eps increase,have the capacity to pay increasing dividends, will see their share price increase.
In today's environment of on going low interest rates, the market is looking for companies with strong balance sheets,that are paying good dividends,and have the capacity to increase them.
I see Heartland fitting the bill on all measures.
No need for flicking coins when you have done sound research.I leave that to Tossers.

If everyone was an Accountant, then you would be right.
But people can become panicked. DON'T PANIC!
Markets can go all over the place.
However, we can be thankful that Heartland runs on cash borrowed in NZ. PLUS that they have a pretty diversified loan book.
The sp can go up, or more likely down. Since we in NZ cannot escape a Global Meltdown...Or even heavy rain.

[Beagle]

For this morning's 'question of the day' I am reverting to my favourite subject - impairment :-) - and specifically the non-core property portfolio of FY2013 (or is that the non-core dairy portfolio of FY2017).

Now, a Heartland banker who makes an impairment provision is seen as

A/ prudent, far sighted, managing debts to best practice and responsible.

OTOH a Heartland banker who has to write off a loan is seen as

B/ reckless, lacking in due diligence, ill disciplined and squandering resources.

Now the curious bit. At the end of the day whether a loan is written off in advance by 'provisioning' or written off immediately in an 'expense' makes no difference to the long term position of Heartland bank. So my question is, are Heartland's senior loan managers best characterised by A/ or B/ ?

SNOOPY

You forgot option C - With great reluctance and after a great deal of time has passed and considerable forbearance has been shown, reluctantly doing what is only done as an absolute last resort because all possible efforts aimed at recovery, rescheduling, restructuring, refinancing or otherwise avoiding recognising a loss have been completely and utterly exhausted and the loan has irrevocably failed with absolutely no chance whatsoever of even a partial recovery. This is only done after all channels of recovery have been fully exhausted including any proceedings taken against guarantor's if any and liquidation of all assets held as security.

That's how most finance companies and banks operate.

[mouse]

You forgot option C - With great reluctance and after a great deal of time has passed and considerable forbearance has been shown, reluctantly doing what is only done as an absolute last resort because all possible efforts aimed at recovery, rescheduling, restructuring, refinancing or otherwise avoiding recognising a loss have been completely and utterly exhausted and the loan has irrevocably failed with absolutely no chance whatsoever of even a partial recovery. This is only done after all channels of recovery have been fully exhausted including any proceedings taken against guarantor's if any and liquidation of all assets held as security.

That's how most finance companies and banks operate.

Meanwhile, of course, the loans have been 'rolled over' so that it can be claimed that there are Zero loans in arrears. The loan book is Healthy. Do Not Worry.
But.............at the back door those in the know are lined up for their cash.
I hasten to add that I think Heartland is pretty solvent, and I am not selling atm.

[Snoopy]

Brexit and Heartland.
Funding;Unlike the Aussie banks HBL does not rely on any European wholesale funding. So no funding problems for Heartland,who have 38,000 individual depositors, 19,000 of whom have been with Heartland for 10 years or more..


According the to last half yearly report (HY2016), Heartland has $377.605m in bank borrowings. This is rather smaller than the $2,174.533m of depositors funds on the books. But it is certainly not nothing.

The trend seems to be increasing the amount of depositors funds relative to parent bank borrowing over recent times. That means less risk exposure to overseas wholesale banking markets. Obviously the prefoetal support for Heartland which commenced trading five years ago from all those depositors who put their money in ten or more years ago has been helping.

SNOOPY

[Snoopy]

You forgot option C - With great reluctance and after a great deal of time has passed and considerable forbearance has been shown, reluctantly doing what is only done as an absolute last resort because all possible efforts aimed at recovery, rescheduling, restructuring, refinancing or otherwise avoiding recognising a loss have been completely and utterly exhausted and the loan has irrevocably failed with absolutely no chance whatsoever of even a partial recovery. This is only done after all channels of recovery have been fully exhausted including any proceedings taken against guarantor's if any and liquidation of all assets held as security.

That's how most finance companies and banks operate.


Don't let the bad loans or potential bad loans overcloud your view of Heartland, Roger. Go back to 2012, and the fall back position for some of those expensive property development sections in the 'non-core' property portfolio was to put a couple of sheep on them. As Heartland themselves have joked, dairy cows can at least be slaughtered. And the price of beef in the supermarkets seems to be holding up.

The 'Snoopy Adjusted Underlying Profit' assumes a non-core property type hit every five years. This means whatever the headline figure for FY2016, and it might be bad, the SAUP I still estimate at $52.683m. I think you need to look through the big hits like the dairy downturn, to determine fair investment value.

The Reserve Bank are actual the most brutal Heartland bears. That BBB rating means Heartland will be expected to go bust one in every six recessions. It is still a little early to predict whether the coming recession will be 'the one'.

SNOOPY

[Snoopy]

Good question

I reckon A ........as long s it's seen as proactive provisioning to smooth earnings growth

I think 'A' would look better for the long term management incentives too. 'B' is what a new MD would do. Clear the decks, so we can have five nice years of 'A', before crossing companies to the next corporate assignment. Then let the next new guy have his 'B' year. I think that is how management incentives tend to work these days.

SNOOPY

[winner69]

I think 'A' would look better for the long term management incentives too. 'B' is what a new MD would do. Clear the decks, so we can have five nice years of 'A', before crossing companies to the next corporate assignment. Then let the next new guy have his 'B' year. I think that is how management incentives tend to work these days.

SNOOPY

......Roger's C) probably closer to reality but A) is the fine tuning bit to proactively smooth things out a bit so the tables in the reports keep showing these incremental improvement in key ratio's

[Beagle]

Don't let the bad loans or potential bad loans overcloud your view of Heartland, Roger. Go back to 2012, and the fall back position for some of those expensive property development sections in the 'non-core' property portfolio was to put a couple of sheep on them. As Heartland themselves have joked, dairy cows can at least be slaughtered. And the price of beef in the supermarkets seems to be holding up.

The 'Snoopy Adjusted Underlying Profit' assumes a non-core property type hit every five years. This means whatever the headline figure for FY2016, and it might be bad, the SAUP I still estimate at $52.683m. I think you need to look through the big hits like the dairy downturn, to determine fair investment value.

The Reserve Bank are actual the most brutal Heartland bears. That BBB rating means Heartland will be expected to go bust one in every six recessions. It is still a little early to predict whether the coming recession will be 'the one'.

SNOOPY

Pretty sure you said yourself a few chapters ago that UDC were significantly more realistic when it came to overall debt provisioning. BBB is vulnerable to a deep prolonged recession...something few if any people here want to admit.

[macduffy]

The Reserve Bank are actual the most brutal Heartland bears. That BBB rating means Heartland will be expected to go bust one in every six recessions. It is still a little early to predict whether the coming recession will be 'the one'.


I learn something new every day. I always thought that those ratings were set by the likes of Moodys, Standard and Poors, Finch etc. as is the case with industrial-type companies.

[percy]

I learn something new every day. I always thought that those ratings were set by the likes of Moodys, Standard and Poors, Finch etc. as is the case with industrial-type companies.

You are off course correct.
A laugh a page on this thread.!!
Wonder when the next recession is coming?
The motel I stayed in at Westport for the last two nights was full.
Recession up your way Macduffy?
Local banks increased their deposit rates?

[winner69]

When Heartland rave about their BBB rating they provide a link to a RBNZ document about what it means

Table below

Approx. probability of default over 5 years with a BBB rating is 1 in 30 (5 times more likely than those with a A rating). The approximate, median likelihood that an investor will not receive repayment on a five-year investment on time and in full based upon historical default rates published by each agency.

Irrespective of whether motels are full in Westport or Aucklnd is booming there is always a possibility of default

[percy]

In practical terms comparing BBB with AAA rating.
Enjoy this.
I recently asked Heartland Bank's head of banking,Chris Foold whether Heartland would be looking for a higher rating.
"No point, as were are already attracting funds at the same rate as AAA Banks."!!!!!!!!!!!!

[macduffy]

Thank you both for clearing that up, I'll now remove my mischievous tongue from my aching cheek!

Back to pondering Brexit, imminent recessions and rising interest rates!

;)

[Beagle]

Sure you meant possibility Winner and agree there's always the possibility of a GFC Mk2. Nice image. BBB - Capacity to make timely payment - Adequate. I guess that's adequate unless the custard really hits the fan in a major way.

[winner69]

In practical terms comparing BBB with AAA rating.
Enjoy this.
I recently asked Heartland Bank's head of banking,Chris Foold whether Heartland would be looking for a higher rating.
"No point, as were are already attracting funds at the same rate as AAA Banks."!!!!!!!!!!!!

Good story percy ......but please name a Bank in NZ with a AAA rating

[percy]

Good story percy ......but please name a Bank in NZ with a AAA rating

Spitting hairs,or just nitpicking?
I took it to mean HBL were attracting funds at the same rate the Australian Banks were paying for their NZ deposits.
What ever way you take it,HBL they are achieving what they formed Heartland for,ie attract funds at a very low rate.

[Beagle]

Spitting hairs?
I took it to mean HBL were attracting funds at the same rate the Australian Banks were paying for their NZ deposits.
What ever way you take it,HBL they are achieving what they formed Heartland for,ie attract funds at a very low rate.

investors who don't understand the risk IMO.

BBB - = 1 chance in 30 (3.33%) of default within 5 years. A rated is 1 chance in 150 (O.67%) of default in five years. Investors should be getting a 3.33-0.67 / 5 = 0.53% premium per annum on 5 year term deposits with a BBB rated bank over what they can get on an A rated bank. Throw into the mix too the Reserve Bank's open bank resolution here and people accepting very low interest rates on long term deposit with HBL simply don't understand the risks, (albeit they are fairly minor) but they are certainly not getting a return commensurate with the risk taken. A lot of things can happen in 5 years.
Interestingly HBL's 5 year term deposit rate for over $20K is 3.8% (ANZ for example for 5 years is 3.6% per annum) and that return is fully taxable so for investors on a 33% tax rate their net return for the risk is 2.55% per annum.
Total return over 5 years is thus, (ignoring compounding) = 12.75%, less risk of default 3.33% = net risk adjusted return 9.42% / 5 years = 1.88% per annum net return less an adjustment for potential loss of capital due to the possibility of the Reserve Bank invoking its open banking resolution. This post shows why I will only bank with an A rated bank.

[percy]

Proof of the pudding is in the eating.
"38,000 individual depositors,19,000 of whom have been with HBL 10 years or more."
That is known as loyalty.
It does not just happen.It has been earnt.
I seem to remember posters here saying HBL would not get through the government guarantee ending.Remember those ? rubbish off course.

[Beagle]

96.7% chance they'll all be okay for the next five years too Percy.

[percy]

96.7% chance they'll all be okay for the next five years too Percy.

With each years improving ROE,and net interest margin,profit,together with Heartland Bank carrying excess capital,and the fact NZ's outlook remains excellent, I would think those in the know, would rate their chance of being all OK for the next five years as closer to 100%.I know I do.

ps.I expect HBL's share price to be in excess of $3.00 in 5 years time.
And that is why I remain "well positioned."

[winner69]

Hey nextbigthing - that $1.60 later in the year is a now a pipe dream i reckon. I think the mood on the street is is now rather subdued and expectations might only be about $1.20 now ...maybe $1.30 if we lucky.

Looks like acquisitions off the agenda - need that excess capital in these times.

Current price now below the 50EMA, 100EMA and 200EMA. Thats not good is it.

What are you hearing on the street up your way mate?

[Baa_Baa]

With each years improving ROE,and net interest margin,profit,together with Heartland Bank carrying excess capital,and the fact NZ's outlook remains excellent, I would think those in the know would rate their chance of being all OK as closer to 100%.I know I do.

Interesting discussion folks, another useful dimension to consider, the risk vs reward view affects customers and shareholders. Do you have all your personal and business banking with Heartland Percy, i.e. not solely a shareholder?

[Baa_Baa]

Current price now below the 50EMA, 100EMA and 200EMA. Thats not good is it.

No worries, found support on the 550 day moving average. She'll be right mate, can't blame HBL for Brexit! Chin up, based on your optimism for the big bourses $1.60 is a sure bet.

[nextbigthing]

Hey nextbigthing - that $1.60 later in the year is a now a pipe dream i reckon. I think the mood on the street is is now rather subdued and expectations might only be about $1.20 now ...maybe $1.30 if we lucky.

Looks like acquisitions off the agenda - need that excess capital in these times.

Current price now below the 50EMA, 100EMA and 200EMA. Thats not good is it.

What are you hearing on the street up your way mate?

Still the same as what I've always passed on, $1.06 by Christmas.

Yes, $1.06 :scared:

[percy]

Interesting discussion folks, another useful dimension to consider, the risk vs reward view affects customers and shareholders. Do you have all your personal and business banking with Heartland Percy, i.e. not solely a shareholder?

I have banked with Westpac for 52 years.My business banking has been with them 43 years.
I have had the same accountant for 43 years.
I have dealt with Craigs for over 35 years.
I no longer hold any Westpac shares.
I hold Heartland Bank shares,which I have been steadily adding to.
I looked at opening an account with ANZ Securities,as well as Heartland Bank, and decided I could not be bothered filling out their forms.
I generally buy shares for the long term,ie I have been a share holder of Ebos for approx. 27 years.

[Joshuatree]

Yeah me too my bank is Westpac ; but the bank i invest in in NZ to profit from is Heartland; what a great track record against the odds its carved out some great niches and risk wise its minimal compared with the small cap spekkies and Goldies i play with. Kinda like SCL i know a weather event could stuff things up occasionally but thats the risk I'm prepared to take; as is walking out the door.

[winner69]

With these sort of rates of household borrowing you'd think Heartland would be doing much better than expected .....must bea profit upgrade soon.

http://www.interest.co.nz/property/82377/annual-rate-growth-household-borrowing-continuing-climb-rates-last-seen-2008

Numbers concentrate on housing loans but implied is strong growth in consumer borrowing (outside of home loans)

[winner69]

I'm told that Heartland will be Open for Business in late august when BNZ is Closed for Good

[percy]

I'm told that Heartland will be Open for Business in late august when BNZ is Closed for Good

Don't know what you are talking about with regard The BNZ,but I can tell you Heartland Bank's "open for business" is going extremely well. [As is all their online products].

[winner69]

Don't know what you are talking about with regard The BNZ,but I can tell you Heartland Bank's "open for business" is going extremely well. [As is all their online products].

Plenty of advertising and pushing it hard - radio ads all through the night - why not they are open for business aren't they

[percy]

Plenty of advertising and pushing it hard - radio ads all through the night - why not they are open for business aren't they

Open for business 24/7 I believe.
I go to sleep every night counting the dollars they are making...
1mil and one,1 mi land two,1 mil and three,1 mil and four.
I think they are making it quicker than I can count.
1 mil and five.

[Joshuatree]

Closed For Good: BNZ (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwie4taQjs_NAhWEHZQKHfxQAogQFggcMAA&url=https%3A%2F%2Fwww.closedforgood.org%2F&usg=AFQjCNEProp-3sbCJV883aIzixzGfPPxGQ&sig2=vPt3Von6ciw20a9vdMKYTw) Great stuff; hats off.

[Snoopy]

Snoopy wrote:
"The Reserve Bank are actual the most brutal Heartland bears. That BBB rating means Heartland will be expected to go bust one in every six recessions. It is still a little early to predict whether the coming recession will be 'the one'."

I learn something new every day. I always thought that those ratings were set by the likes of Moodys, Standard and Poors, Fitch etc. as is the case with industrial-type companies.

Quite right to pull me up on this Macduffy - my wording was a little sloppy.

Perhaps what I should have said was the Reserve Bank has decided that a minimum requirement for a bank is the "Capacity to make timely repayments." The minimum credit rating that would indicate this is BBB (as determined by Fitch in the case of Heartland). The Reserve Bank accepts the Fitch rating and all that this implies (likelihood of defaulting on customer deposits in any given year 1 in 30 - or if you accept a business cycle is six years, one business cycle in five).

Nevertheless the essence behind what I said, namely that the reserve bank accepts the Heartland BBB rating and the associated one in 30 year default risk that the BBB rating implies is correct.

SNOOPY

[macduffy]

Sorry to be pedantic here, Snoopy, but does the RBNZ "accept" credit ratings as distinct from "noting" them? Where would they go if another ratings agency came up with a different rating, as is sometimes the case in other industries/markets?

[Snoopy]

Sorry to be pedantic here, Snoopy, but does the RBNZ "accept" credit ratings as distinct from "noting" them? Where would they go if another ratings agency came up with a different rating, as is sometimes the case in other industries/markets?

Heartland got their own BBB credit rating from Fitch, IIRC.

I seem to recall Jeff Greenslade saying they were not seeking a 'second opinion'. So by my reckoning that means the Reserve Bank has 'accepted' it. If the Reserve Bank had merely 'noted' the opinion, it suggests that they might be on the look out for another rating to either confirm or contradict Fitch. But the Reserve Bank have not asked for a second opinion. By my reckoning this means the Reserve bank have 'accepted' the Fitch rating, and all the predicted consequences, -good and bad- , that flow from that Fitch rating.

SNOOPY

[stoploss]

Sorry to be pedantic here, Snoopy, but does the RBNZ "accept" credit ratings as distinct from "noting" them? Where would they go if another ratings agency came up with a different rating, as is sometimes the case in other industries/markets?

Credit rating , don't get me started ......

https://en.wikipedia.org/wiki/Credit_rating_agencies_and_the_subprime_crisis

[BlackPeter]

Credit rating , don't get me started ......

https://en.wikipedia.org/wiki/Credit_rating_agencies_and_the_subprime_crisis

As usual - follow the trace of the money and than ask yourself: who is paying these credit rating agencies and what does the payer want to achieve with this payment?

[Doug]

Posted in good faith.
I would also doubt The Reserve Bank would be too interested in any of the rating agencies opinion.

http://www.rbnz.govt.nz/regulation-and-supervision/banks/prudential-requirements/credit-ratings

[Beagle]

http://www.rbnz.govt.nz/regulation-and-supervision/banks/prudential-requirements/credit-ratings

Good post. People need to keep in mind that credit ratings for banks must be investment grade, minimum of BBB- and maintained as such.
The most recent and most spectacular failure of an investment grade financial institution was South Canterbury Finance which was rated BBB- the same rating as the Cooperative bank and only one notch below HBL.

[percy]

http://www.rbnz.govt.nz/regulation-and-supervision/banks/prudential-requirements/credit-ratings

Thank you for the link.
Excellent.

[axe]

I have witnessed some sloppy math on here regarding probability and the one in 30 chance of default over a 5 year period. If you roll a six sided dice six times you are not guaranteed to roll a 6 even though you have 6x 1:6 chances. There's something called independence of events.

"A basic assumption in probability theory is that each event is independent of all other events. That is, previous draws have no influence on the next draw. "

This means that if Heartland doesn't default in the course of a year the probability of it defaulting the next year does not increase.

[axe]

The approximate, median likelihood that an investor will not receive repayment on a five-year investment on time and in fullbased upon historical default rates published by each agency.

Adequate BBB Baa BBB 1 in 30

[Snoopy]

I have witnessed some sloppy math on here regarding probability and the one in 30 chance of default over a 5 year period. If you roll a six sided dice six times you are not guaranteed to roll a 6 even though you have 6x 1:6 chances. There's something called independence of events.

"A basic assumption in probability theory is that each event is independent of all other events. That is, previous draws have no influence on the next draw. "

This means that if Heartland doesn't default in the course of a year the probability of it defaulting the next year does not increase.

I don't disagree with anything you have written above regarding probability theory Axe.

But I do think that in relation to any particular example (in this case Heartland) that just because you are applying probability theory, that doesn't mean that all years in which Heartland operates neatly organize themselves into "independent events." For example, consider Heartland's non-core property portfolio.

If the bad property is a drag on the company one year, and there is no significant improvement in selling down that portfolio or writing it down over that year, then it will be a drag on the company the next year too. IOW because loans 'span the years', this means that successive years in which Heartland operates are clearly not independent of each other.

I would imagine the statisticians who draw up these loan ratings know that each business year of Heartland is not independent of the next. So they will have adjusted their risk model to compensate. To give a very simple (oversimplified for any reality, but useful for explaining the concept) example of this to make the point.

Consider 30 years of a financial institution in business, made up of two types of years: 'good' years and 'bad' years. Let's assume for the purposes of this example that there are an equal number of 'good' and 'bad' years. Let's assume that the chance of going bust in a 'bad' year is 1 in 15. Let's further assume that the chance of going bust in a 'good' year is 1 in 45. Because there are an equal number of 'good' years and 'bad' years the average chance of going bust when any year is picked at random, with no knowledge as to whether that year is good or bad, is 1 in 30. Spookily similar to a finance institution with a BBB rating!

So when you see a BBB rating applied to a finance institution like this, what is the chance that in any particular year the chance of going bust is 1 in 30? There is actually no chance at all that this will happen! But that doesn't mean the 1 in 30 year risk ratio when applied to this particular financial organization is wrong.

SNOOPY

[Cricketfan]

As far as I understand it, the credit rating is the probability that the bank will default in the next 5 years from the time the credit rating was issued. Therefore whatever probability that is (e.g. 1 in 30), it's only valid to estimate the risk for the whole 5 year period starting at that point in time. You can't use that probability to estimate the risk for any given year (e.g. you can't say for any particular year that the bank has a 1/30 chance of defaulting). So if the BBB rating was issued 2 years ago, you don't know what probability of the bank failing this year or next year is. If you want the probability of it defaulting in next 5 years, you'd need the credit rating to be reassessed again based on current information.

[Beagle]

That's how I see it too Cricketfan.

Interestingly though banks rated AA are rated a 1 in 300 chance of failure. Banks like ASB, BNZ, Westpac and ANZ are all rated AA- so technically within the definitions as laid out by S&P and Fitch your money is ten times safer there than with a bank rated BBB. I doubt many depositors have a handle on that. In my view this also explains why HBL's PE must be a lower multiple than a major AA rated bank because the same risk premium needs to apply to equity investors who are first cab off the rank when it comes to taking a haircut.

[axe]

I would assume with the rating being a one in 30 over 5 years that the rating would have "good" and "bad" years calculated in the mix. Note that it is not a one in 30 chance in a year - it is a one in 30 chance over five years - so the chance may be lower or greater for an individual year. I do not believe the risk rating of BBB is wrong.

"bbb Good fundamental credit quality‘bbb’ ratings denote good prospects for on-going viability. The bank’s fundamentals are adequate, such that there is alow risk that it would have to rely on extraordinary support to avoid default. However, adverse business or economicconditions are more likely to impair this capacity." https://www.fitchratings.com/web_content/ratings/fitch_ratings_definitions_and_scales.pdf



I don't disagree with anything you have written above regarding probability theory Axe.

But I do think that in relation to any particular example (in this case Heartland) that just because you are applying probability theory, that doesn't mean that all years in which Heartland operates neatly organize themselves into "independent events." For example, consider Heartland's non-core property portfolio.

If the bad property is a drag on the company one year, and there is no significant improvement in selling down that portfolio or writing it down over that year, then it will be a drag on the company the next year too. IOW because loans 'span the years', this means that successive years in which Heartland operates are clearly not independent of each other.

I would imagine the statisticians who draw up these loan ratings know that each business year of Heartland is not independent of the next. So they will have adjusted their risk model to compensate. To give a very simple (oversimplified for any reality, but useful for explaining the concept) example of this to make the point.

Consider 30 years of a financial institution in business, made up of two types of years: 'good' years and 'bad' years. Let's assume for the purposes of this example that there are an equal number of 'good' and 'bad' years. Let's assume that the chance of going bust in a 'bad' year is 1 in 15. Let's further assume that the chance of going bust in a 'good' year is 1 in 45. Because there are an equal number of 'good' years and 'bad' years the average chance of going bust when any year is picked at random, with no knowledge as to whether that year is good or bad, is 1 in 30. Spookily similar to a finance institution with a BBB rating!

So when you see a BBB rating applied to a finance institution like this, what is the chance that in any particular year the chance of going bust is 1 in 30? There is actually no chance at all that this will happen! But that doesn't mean the 1 in 30 year risk ratio when applied to this particular financial organization is wrong.

SNOOPY

[axe]

I think you are confusing the 1 in 30 chance over a 5 year period with a one in 30 year event. In weather terms a one in 30 year event is "expected" to occur within the 30 years. In probability one in 30 chance is different.

Let use the odds of rolling 2x D6 and both coming up with a 6.
There is a 1 in 36 chance of this occurring on each roll. Over 36 rolls what is the chance that you have not rolled 2x D6?

[Jantar]

I would say around 0.36721

What this 1:30 year rating really means is that the chances of not going bust in the next 30 years is slightly better than a third. A better question may be 'Over what period is there an equal lilelyhood of going bust or of staying in business?"
That works out to just over 24.5 years

[Snoopy]

I think you are confusing the 1 in 30 chance over a 5 year period with a one in 30 year event. In weather terms a one in 30 year event is "expected" to occur within the 30 years. In probability one in 30 chance is different.


I would argue that the probability of a bank failing is more atune to a 'weather' event. A bank must navigate financial storms. There is nothing in the reserve bank statement on 'Explaining Credit Ratings'

http://www.rbnz.govt.nz/-/media/ReserveBank/Files/regulation-and-supervision/banks/3498179.pdf?la=en

that says anything about each year bering independent, and risk being a summation of independent trials. That is something that you introduced into the explanation Axe.



Let use the odds of rolling 2x D6 and both coming up with a 6.
There is a 1 in 36 chance of this occurring on each roll. Over 36 rolls what is the chance that you have not rolled 2x D6?


When throwing two dice, the chance that you roll a 6 on both dice is 1/6 x 1/6 = 1/36

Therefore the chance you will not do this is 35/36

The chance of not rolling a double six twice in a row is 35/36 x 35/36

The chance of not rolling a double six 36 times in a row is: (35/36)^36 = 0.367 as Jantar said.

Now your question Axe. What is the relevance of this to assessing a credit risk of a bank like Heartland?

SNOOPY

[Snoopy]

I think you are confusing the 1 in 30 chance over a 5 year period with a one in 30 year event. In weather terms a one in 30 year event is "expected" to occur within the 30 years. In probability one in 30 chance is different.


Let's put this question in a more Heartland relevant way. There are two investors, each investing $10,000 with Heartland on the same day.

1/ Investor A puts their money in a Heartland term deposit for 5 years. Interest is compounded annually.

2/ Investor B puts their money in a one year Heartland term deposit. Upon maturity, investor B reinvests their term deposit plus interest earned for another year. Investor B does this for five years in total.

Over the five years the credit rating of Heartland does not change and the interest rate curve remains flat (i.e. the one year interest rate is the same as the five year interest rate). The actual interest rate earned from Heartland does not change over the five year period.

Now hopefully Axe, you will agree with me that at the end of the five years both Investor A and Investor B will have excatly the same amount of money in their Heartland account. But which investor, A or B, has taken the greatest risk over the five year investment period?

SNOOPY

[Snoopy]

As far as I understand it, the credit rating is the probability that the bank will default in the next 5 years from the time the credit rating was issued. Therefore whatever probability that is (e.g. 1 in 30), it's only valid to estimate the risk for the whole 5 year period starting at that point in time. You can't use that probability to estimate the risk for any given year (e.g. you can't say for any particular year that the bank has a 1/30 chance of defaulting). So if the BBB rating was issued 2 years ago, you don't know what probability of the bank failing this year or next year is. If you want the probability of it defaulting in next 5 years, you'd need the credit rating to be reassessed again based on current information.


Aren't credit ratings regularly reassessed as part of the normal ratings process?

SNOOPY

[Snoopy]

What this 1:30 year rating really means is that the chances of not going bust in the next 30 years is slightly better than a third.


If you assume that all years are independent (which I would argue they are not), and the chance of going bust in one year is one in thirty (which some others don't agree is the right interpretation of reserve bank risk) then.

The chances of not going bust in any one year is 29/30. So taken of 30 consecutive years

(29/30)^30 = 0.3616

or 'slightly better than a third'.



A better question may be 'Over what period is there an equal lilelyhood of going bust or of staying in business?"
That works out to just over 24.5 years


(29/30)^y = 0.5

=> ln(29/30)^y = ln0.5
=> y x ln(29/30) = ln0.5

Working out the natural logs then solving for y, gives y = 20.4 years

SNOOPY

[Jantar]

If you assume that all years are independent (which I would argue they are not), and the chance of going bust in one year is one in thirty (which some others don't agree with) then.

(29/30)^30 = 0.3616

or 'slightly better than a third'.



(29/30)^y = 0.5

=> ln(29/30)^y = ln0.5
=> y x ln(29/30) = ln0.5

Working out the natural logs then solving for y, gives y = 20.4 years

SNOOPY
Correct. I had continued with Axe's dice and 1:36. For a 1:30 it is indeed 20.4 yesrs.

[Snoopy]

Correct. I had continued with Axe's dice and 1:36. For a 1:30 it is indeed 20.4 yesrs.


My calculations may be correct. But does either of those calculations that I did give the right answer to the questions posed?

Now another question. Heartland seem to be soundly run. So how do they move up from their bottom of the barrel bank BBB rating? Or do the niche markets they operate in, forever condemn Heartland to remain BBB?

SNOOPY

[percy]

My calculations may be correct. But does either of those calculations that I did give the right answer to the questions posed?

Now another question. Heartland seem to be soundly run. So how do they move up from their bottom of the barrel bank BBB rating? Or do the niche markets they operate in, forever condemn Heartland to remain BBB?

SNOOPY
No need for a higher credit rating.
They are already attracting funds at the same rate the Australian banks are paying.
38,0000 individual depositors more than satisfied with Heartland's BBB rating.

[winner69]

No need for a higher credit rating.
They are already attracting funds at the same rate the Australian banks are paying.
38,0000 individual depositors more than satisfied with Heartland's BBB rating.

and most of them have been with Heartland for 10 years or more .....with deposit rates generally higher than they would have got get from those Australian banks

[percy]

and most of them have been with Heartland for 10 years or more .....with deposit rates generally higher than they would have got get from those Australian banks

Correct 19,000 of Heartland's 38,000 depositors.

[winner69]

No need for a higher credit rating.
They are already attracting funds at the same rate the Australian banks are paying.
38,0000 individual depositors more than satisfied with Heartland's BBB rating.

They are already attracting funds at the same rate the Australian banks are paying.
.......not quite true percy as chart from Heartland below

A good trend though

[percy]

They are already attracting funds at the same rate the Australian banks are paying.
.......not quite true percy as chart from Heartland below

A good trend though

An excellent trend,which confirms what Heartland Bank's head of retail banking,Chris Flood was trying to convey to me, when I recently spoke with him .

[axe]

Investor A and B have taken different risks with choosing between a 1 year TD renewed 5 times or one 5 year TD. I would not agree that they would have "exactly" the same money at the end unless the interest rate offered to both was the same at the time of deposit and did not change at all over a 5 year period - which is unlikely.

In my view the depositor that has taken increased risk is the depositor with the 5 year.
This risk is normally rewarded by the bank offering a higher interest rate for the longer period. The depositor takes some interest rate risk ( that interest rates may rise and they miss out) they take the risk that their personal circumstances may change over the 5 years and they may have to withdraw their money early (resulting in loss of interest and fees.) They also take risk that there is a one in 30 chance over the 5 years that heartland may not be able to pay in full and on time (credit risk).


There is an amazing correlation between risk and return.
http://www.heartland.co.nz/content/investors/heartland-investment-rates.aspx



12 mths
3.40% p.a





5 years

3.70% p.a.



The difference between a one in 30 chance over 5 years and a one in 30 chance for a single year is significant - if there is a one in 30 chance over 5 years - what is the chance for a single year?

Let's put this question in a more Heartland relevant way. There are two investors, each investing $10,000 with Heartland on the same day.

1/ Investor A puts their money in a Heartland term deposit for 5 years. Interest is compounded annually.

2/ Investor B puts their money in a one year Heartland term deposit. Upon maturity, investor B reinvests their term deposit plus interest earned for another year. Investor B does this for five years in total.

Over the five years the credit rating of Heartland does not change and the interest rate curve remains flat (i.e. the one year interest rate is the same as the five year interest rate). The actual interest rate earned from Heartland does not change over the five year period.

Now hopefully Axe, you will agree with me that at the end of the five years both Investor A and Investor B will have excatly the same amount of money in their Heartland account. But which investor, A or B, has taken the greatest risk over the five year investment period?

SNOOPY

[Snoopy]

Investor A and B have taken different risks with choosing between a 1 year TD renewed 5 times or one 5 year TD. I would not agree that they would have "exactly" the same money at the end unless the interest rate offered to both was the same at the time of deposit and did not change at all over a 5 year period - which is unlikely.


Axe, as unlikely as that may seem, if you had read the entire question, you would have seen that I was asking you about just such an unlikely scenario. Changing the question to make it more realistic is pragmatic and sensible, but it doesn't address the question I was asking you!

(Snoopy's head looks up expectantly and tail wags)

I am still hoping Axe that you might take pity on a poor mutt and answer the question that I asked. After all, I did answer the probability question that you put to me. However, failing that, I can come at what I see as 'the issue' from a different angle.

So now to the new question.

The 'one in whatever' ratio (1:30 for a BBB organization) interpretation that the reserve bank quotes in their explanatory notes is

"The approximate, median likelihood that an investor will not receive repayment on a five-year investment on time and in full, based upon historical default rates published by each agency."

Suppose I had taken out the following five term deposit investments with Heartland.

1/ A five year term deposit taken out in FY2012
2/ A five year term deposit taken out in FY2013
3/ A five year term deposit taken out in FY2014
4/ A five year term deposit taken out in FY2015
5/ A five year term deposit taken out in FY2016

Which of these investments (could be one, more than one, or none) does the implied current Heartland BBB credit risk 1:30 of not being repaid apply to?

SNOOPY

[percy]

Heartland Bank can trace their history back to 1875.
At no time have they ever not repaid an investment on time and in full to the best of my knowledge.
So after 140 years, I would think the odds are very much in favour of them continuing to repay investments in full and on time.

[Marilyn Munroe]

Heartland Bank can trace their history back to 1875.
At no time have they ever not repaid an investment on time and in full to the best of my knowledge.
So after 140 years, I would think the odds are very much in favour of them continuing to repay investments in full and on time.

For most of those years loans were approved by directors who;

Were in the same class at school as your big sister,

Drove past your farm on the way to the meeting,

Brought or sold goods and services with you, or

Had a quiet word with your boss at the County Club

Does this happen now?

Boop boop de do
Marilyn

[percy]

Thankfully Heartland Bank have evolved.
The next big advance for banking is digital/online.
Heartland are at the forefront with products that suit their modern clients needs.

[kizame]

Heartland Bank can trace their history back to 1875.
At no time have they ever not repaid an investment on time and in full to the best of my knowledge.
So after 140 years, I would think the odds are very much in favour of them continuing to repay investments in full and on time.

Are No, HBL s history is only a couple of years old, 1875 you refer to Ashburton permanent building society,HBLs management is totally different now so you can't extrapolate that as being THEIR history. This is a new era and entity.
that being said,doesn't mean management won't work to the same principles.

[percy]

Are No, HBL s history is only a couple of years old, 1875 you refer to Ashburton permanent building society,HBLs management is totally different now so you can't extrapolate that as being THEIR history. This is a new era and entity.
that being said,doesn't mean management won't work to the same principles.

Yes right back to 1875 and the Ashburton Permanent Building Society.
Bit like Westpac, which was formed in 1982, but their history goes back to 1861.
Now we can understand the significance of Heartland holding their first agm in Ashburton,and the wonderful mural Heartland had on their Ashburton building, showing Heartland's history timeline.

[axe]

Since 2012 heartlands credit rating has been upgraded.
22 May 2014 S&P upgrade
29 Oct 2014 28 October 2014

Heartland New Zealand Limited (NZX: HNZ) is pleased to announce that Fitch
Rating (Fitch Australia Pty Ltd) has raised its long term issuer credit
rating on HNZ subsidiary Heartland Bank Limited (Bank) to 'BBB' from 'BBB-'
outlook stable. The full release from Fitch Rating is attached.

Fitch Rating noted the Bank's consistent reduction in non-core assets
resulting in improved asset quality and stronger earnings, and that its
business model focuses on niche markets in which it has a leading market
share.

Heartland is pleased with the raised rating, which follows Standard & Poor's
raising the Bank's credit rating earlier this year (22 May 2014).

Snoopy - I have a lot of respect for you and your contribution to ST.
However I feel we are losing relevance to this thread and/or covering things that have already bene covered in depth by other posters
I am happy to continue our discussion via PM if would would like. :)


Axe, as unlikely as that may seem, if you had read the entire question, you would have seen that I was asking you about just such an unlikely scenario. Changing the question to make it more realistic is pragmatic and sensible, but it doesn't address the question I was asking you!

(Snoopy's head looks up expectantly and tail wags)

I am still hoping Axe that you might take pity on a poor mutt and answer the question that I asked. After all, I did answer the probability question that you put to me. However, failing that, I can come at what I see as 'the issue' from a different angle.

So now to the new question.

The 'one in whatever' ratio (1:30 for a BBB organization) interpretation that the reserve bank quotes in their explanatory notes is

"The approximate, median likelihood that an investor will not receive repayment on a five-year investment on time and in full, based upon historical default rates published by each agency."

Suppose I had taken out the following five term deposit investments with Heartland.

1/ A five year term deposit taken out in FY2012
2/ A five year term deposit taken out in FY2013
3/ A five year term deposit taken out in FY2014
4/ A five year term deposit taken out in FY2015
5/ A five year term deposit taken out in FY2016

Which of these investments (could be one, more than one, or none) does the implied current Heartland BBB credit risk 1:30 of not being repaid apply to?

SNOOPY

[percy]

Good to see CEO Jeff Greenslade, and head of banking Chris Flood, adding to their holdings.
Confirms they believe what they have been saying at the presentations they have been giving.

[BlackPeter]

Good to see CEO Jeff Greenslade, and head of banking Chris Flood, adding to their holdings.
Confirms they believe what they have been saying at the presentations they have been giving.

Yes, though are you sure they paid for the shares themselves? Shares have been bought under the existing "LTI scheme". Correct me if I am wrong, but I assume the abbreviation stands for something like "Long Term incentive"? Might be just free money (i.e. paid by share holders) for the senior management team ...

[trader_jackson]

Good to see CEO Jeff Greenslade, and head of banking Chris Flood, adding to their holdings.
Confirms they believe what they have been saying at the presentations they have been giving.

I believe they did pay for them themselves as considerations were paid (is this right?)
Clearly they believe a strong result is on the horizon! (and given HBL's short, sharp drop, they probably couldn't resist picking up shares at bargain basement pricing ;))

[winner69]

Hey t-j - reckon the share price will get to $1.30 and stay above it this time around

[trader_jackson]

winner69, I believe heartland are very well positioned ;)

[winner69]

winner69, I believe heartland are very well positioned ;)

As they say every dog has it's day and Heartlands day is finally coming eh

Once past 130 only another 10 cents or so to get back to where it was 18 months ago

Think nextbigthing meant 160 and not 106 in his recent post - 160 by time of full year announcement - nothing in the way to stop that is there.

[kizame]

yep you'all could be right as the PE is only 12,but I think maybe with the unknown of a potential aquisition,who knows,but without that,there could be minimal growth in shareprice and profitability over the next year. I for one would like to see a steady long term uptrend,if you look at the weekly and monthly chart,it has been in a consolidation triangle since Feb 2015 and technically only needs to break 130-31 to bust out of this and then 135 to beat resistance.It is really close to doing this as you can see by the shareprice,so what will be the catalyst?
Aquisition,increased profit guidance for forthcoming year (still too early for that I think),I'm picking it is about to breakout but will be a slow and steady climb to 180 if an aquisition doesn't happen.

I am ignoring of course the clouds that seem to be building,and calling for a correction in the markets.
T'm trying to look at the chart in front of me and ignoring the periferal noise.

[Cricketfan]

With dividends of 8.5% p.a, this is my highest yielding stock so even though more capital gain would be nice, I can't complain.

[winner69]

Hey t_j it's finally made it to $1.30 ......good eh and now heading to all time high $1.40 plus

With no acquisition on the cards this year i expect Jeff to come clean and announces an earnings upgrade .....or will proactive provisioning stop that happening?

Where's you Arvida in the race?

[Snow Leopard]

I did take some time out from taking time out to buy some HBL when they were on special at sub $1.20 a few weeks ago.

Best Wishes
Paper Tiger

[trader_jackson]

I did take some time out from taking time out to buy some HBL when they were on special at sub $1.20 a few weeks ago.

Best Wishes
Paper Tiger

As I'm sure you know, you weren't the only one... while HBL was part of one of Briscoes famous sales, Heartlands CEO (Jeffrey) and Heartlands Head of Banking (Christopher) also took some time out from taking time out to take advantage of this short lived special

winner69, it would seem ARV has retired from the race, albeit a bit early...!
Time will tell regarding upgrades and what is happening with the capital return or a potential acquisition

[winner69]

As I'm sure you know, you weren't the only one... while HBL was part of one of Briscoes famous sales, Heartlands CEO (Jeffrey) and Heartlands Head of Banking (Christopher) also took some time out from taking time out to take advantage of this short lived special

winner69, it would seem ARV has retired from the race, albeit a bit early...!
Time will tell regarding upgrades and what is happening with the capital return or a potential acquisition

Dont exagerate t_j - Briscoes sales are 50% / 60% off - Heartland was only about a 10% off sale.

Better push on from here - been a frustratingly disappointing stock the last year but i live in hope. Maybe i am in love with them.

[trader_jackson]

Dont exagerate t_j - Briscoes sales are 50% / 60% off - Heartland was only about a 10% off sale.

Maybe I was talking about where I believe the share price should really be ;);)

[winner69]

Maybe I was talking about where I believe the share price should really be ;);)

I get it nowc- $1.60 to $2.00

[nextbigthing]

I get it nowc- $1.60 to $2.00

By Christmas.

[Snoopy]

Yep you'all could be right as the PE is only 12, but I think maybe with the unknown of a potential aquisition,who knows,but without that,there could be minimal growth in shareprice and profitability over the next year.


Lofty expectations? Is there any bank -globally- sitting on a PE of more than 12 right now?

On another note I was out at Rangiora a couple of weeks back. There was a note there on the former Heartland premises that they had relocated the branch to Riccarton. What a crock. The Riccarton branch has been where it is for some time. The Rangiora branch has been closed down. That is the real truth of the matter. So much for Heartland's rural roots. Roll on the Heartland rural rout!

SNOOPY

[Snow Leopard]

...On another note I was out at Rangiora a couple of weeks back. There was a note there on the former Heartland premises that they had relocated the branch to Riccarton. What a crock. The Riccarton branch has been where it is for some time. The Rangiora branch has been closed down. That is the real truth of the matter. So much for Heartland's rural roots. Roll on the Heartland rural rout!

SNOOPY

What was the precise wording of the note?

Any decent financial institution will begin with:

"Dear customer.

In order to serve you better we have [relocated this branch...]"

If they did not use that precise wording they are probably dodgy and you should not give them your money.

Best Wishes
Paper Tiger

[beetills]

A couple of months ago I took my sons hard earned cash to add to a term deposit that he had with Heartland.What do you know ....they don't take cash.....but directed me to Westpac across the road with a deposit form.
Obviously when a bank don't take cash well they can forget it.

[blockhead]

A couple of months ago I took my sons hard earned cash to add to a term deposit that he had with Heartland.What do you know ....they don't take cash.....but directed me to Westpac across the road with a deposit form.
Obviously when a bank don't take cash well they can forget it.

A Bank doesn't take cash ????? thats like a pub not serving beer !!

Whats the world coming to ?

[Snoopy]

A couple of months ago I took my sons hard earned cash to add to a term deposit that he had with Heartland.What do you know ....they don't take cash.....but directed me to Westpac across the road with a deposit form.
Obviously when a bank don't take cash well they can forget it.


Heartland is more of a specialised financer these days. Actual banking functions (like mortgages, now done through kiwibank IIRC) and - now it seems cash - are all being outsourced. Best to think of Heatland in terms of the old 'Claytons' drink ad.

'Heartland'. It's the bank you have, when you don't have a bank!

SNOOPY

[trader_jackson]

A couple of months ago I took my sons hard earned cash to add to a term deposit that he had with Heartland.What do you know ....they don't take cash.....but directed me to Westpac across the road with a deposit form.
Obviously when a bank don't take cash well they can forget it.

Sounds actually very smart, get Westpac (or another bank) to do all the hard work (counting the cash, paying tellers, storing the cash, having a heavy retail frontage, reconciliations etc etc) while heartland just gets the easy end game: the direct credit transfer... maybe it's one of the reasons they can pay you, the customer, the better term deposit rate? ;)

[percy]

Heartland is more of a specialised financer these days. Actual banking functions (like mortgages, now done through kiwibank IIRC) and - now it seems cash - are all being outsourced. Best to think of Heatland in terms of the old 'Claytons' drink ad.

'Heartland'. It's the bank you have, when you don't have a bank!

SNOOPY

Exactly right.!!
HBL's actual banking functions are out sourced to Westpac,so you can bank cash into your Heartland Bank account, at any Westpac Branch.There is even a Westpac branch in Geraldine for you Blockhead,and one Rangiora for you Snoopy.!!..lol
From Heartland Bank's recent presentation you can see where Heartland see their future in banking;
"Market leadership in digital distribution and digital marketing to deliver a radically better customer experience based on 'ease and speed'".'
From the way "open for business" has taken off they are certainly well on their way to achieving their objectives.In fact they are receiving per day online ,what I would expect a bank with between 100 and 150 branches would achieve. [Worth thinking about.]!
I also hear they are receiving a lot of applications for REL loans on line,which rather surprised me until I thought about it.

[trader_jackson]

I also hear they are receiving a lot of applications for REL loans on line,which rather surprised me until I thought about it.

I forgot to mention this... yes I have also heard similar things, heartland are one of the only companies in NZ (the only one maybe?) that do REL in a big way... good foothold in Australia as well

[winner69]

Yippee - a close above 130

Was about that at beginning of year. Got to 130 odd in June for one day before fading away

This time it will be different - it will kick on for sure

No acquisition on horizon, no capital return - but a profit upgrade in August i reckon.

Looking good for Heartland over next few months

[trader_jackson]

No acquisition on horizon

I wouldn't be so sure about this part...

[mouse]

Exactly right.!!
HBL's actual banking functions are out sourced to Westpac,so you can bank cash into your Heartland Bank account, at any Westpac Branch.There is even a Westpac branch in Geraldine for you Blockhead,and one Rangiora for you Snoopy.!!..lol
From Heartland Bank's recent presentation you can see where Heartland see their future in banking;
"Market leadership in digital distribution and digital marketing to deliver a radically better customer experience based on 'ease and speed'".'
From the way "open for business" has taken off they are certainly well on their way to achieving their objectives.In fact they are receiving per day online ,what I would expect a bank with between 100 and 150 branches would achieve. [Worth thinking about.]!
I also hear they are receiving a lot of applications for REL loans on line,which rather surprised me until I thought about it.

Hello Percy. Pretty good weather, for Winter, in Christchurch today. I have been getting my Gnome Passport stamped, with the Grandkids, in the Botanic Gardens today. Then I got the problem, what on earth are REL loans on line. Plus the mystery of the bank that has abolished cash, as in folding cash. All most mysterious. Please help!

[percy]

Hello Percy. Pretty good weather, for Winter, in Christchurch today. I have been getting my Gnome Passport stamped, with the Grandkids, in the Botanic Gardens today. Then I got the problem, what on earth are REL loans on line. Plus the mystery of the bank that has abolished cash, as in folding cash. All most mysterious. Please help!
Yes another wonderful day here in ChCh.I am enjoying the school holidays and have been reading "If the dead rise not",by Phiip Kerr,a great read.
Take two demerit points for not knowing what REL loans are.Reverse Equity Loans.Us oldies take them out on our houses to give us extra money for the things we would other wise go without,things like new hip joints,a trip overseas to visit the grand kids etc.Means we don't have to sell the house to get one of these loans.
Cash is something you want to avoid.Spreads germs as it has usually been handled by the great unwashed.Filthy stuff.Just use your credit card or pay online.

[GTM 3442]

Yes another wonderful day here in ChCh. . . .
Cash is something you want to avoid.Spreads germs as it has usually been handled by the great unwashed.Filthy stuff.Just use your credit card or pay online.

Cash is a wonderful thing. With cash, you have as much money as you have.

With anything else, you have as much money as someone else says you have.

[blockhead]

Cash is a wonderful thing. With cash, you have as much money as you have.

With anything else, you have as much money as someone else says you have.


Only ever find cash in the Golden Syrup tin in Grandma's garden, never credit cards or REL's

[winner69]

Share price got a rocket under it this week

Might even get to $1.40 tomorrow

Profit upgrade coming?

[mouse]

Cash is a wonderful thing. With cash, you have as much money as you have.

With anything else, you have as much money as someone else says you have.

I try to pay for most stuff in cash. With tradesmen, doctors, dentists, etc. They seem to appreciate it for some strange reason. Must remember cash too for the Restaurant. I cannot understand why cash is so popular.................
Many thanks Percy for the explanation of REL.

[trader_jackson]

I try to pay for most stuff in cash.

I personally prefer earning airpoints, but cash or non-cash payments aside, was nice to see a robust day for Heartland, maybe some whispers of something good going around? ;)

[King1212]

I reckon juicy dividend mate!

[K1W1G0LD]

I see the W69 effect has kicked in again ,it has a reliability factor of !00%. down to 132!

[Gizzajob I can do that]

I see the W69 effect has kicked in again ,it has a reliability factor of !00%. down to 132!

Some say Winner69 is actually Loser96 the wrong way round, others say he won an obscure bowling competition aged 69, all I know is that hes the cats whiskers. lol

[winner69]

Some say Winner69 is actually Loser96 the wrong way round, others say he won an obscure bowling competition aged 69, all I know is that hes the cats whiskers. lol

You and kiwigold not very nice today. cool it please or I'll get percy to sort you out ha ha

Be grateful - Heartland is UP for the week

It will be up again next - maybe even reach 140

[Gizzajob I can do that]

You and kiwigold not very nice today. cool it please or I'll get percy to sort you out ha ha

Be grateful - Heartland is UP for the week

It will be up again next - maybe even reach 140

Sorry bud, just keep that Percy away from me, might smack me aroung the head with a hard back copy of the Kama Sutra, lol

[percy]

Sorry bud, just keep that Percy away from me, might smack me aroung the head with a hard back copy of the Kama Sutra, lol

Selling books mainly to school libraries, the closest book I have to the Karma Sutra is' "The BLUE book of Nursery Rhymes".!!..lol.

[Grunter]

Share price got a rocket under it this week

Might even get to $1.40 tomorrow

Profit upgrade coming?

Lower interest rates and signals banks may not lower their lending rates = wider margin = more profit for banks

[winner69]

Nicola Greer resigns as a Director. She got the nominal thank you for her contribution.

All white male (and rather old) Board now until a new Director is appointed

New appointment will be interesting - and hopefully will demonstrate (even if only a token gesture) that they are a dynamic diverse organisation.

[theace]

Received a letter in the mail with an offer to buy all my HBL shares for $1.40 ... wondering if others also got an offer?

[winner69]

Received a letter in the mail with an offer to buy all my HBL shares for $1.40 ... wondering if others also got an offer?

Who from?

They be more than $1.40 next week so no reason to sell.

[SCOTTY]

Received a letter in the mail with an offer to buy all my HBL shares for $1.40 ... wondering if others also got an offer?

Would this be with payment over 10 years? :(

[Harvey Specter]

Received a letter in the mail with an offer to buy all my HBL shares for $1.40 ... wondering if others also got an offer?Thats quite high for a low ball offer. What's the catch?

[Snow Leopard]

Nothing new.

This $1.40 Offer Letter is a reminder from Acasta that the offer they made in early June is still open (until 10-Aug).

Term is 10 equal annual payments with first to be made on 30 June 2017

Best Wishes
Paper Tiger

[trader_jackson]

Who from?

They be more than $1.40 next week so no reason to sell.

$1.40 next week? I'm thinking this is a pessimistic way of seeing things... ;);)

[winner69]

$1.40 next week? I'm thinking this is a pessimistic way of seeing things... ;);)

I said over $1.40

Way its going today could be this week as you optimistically suggest

[Jantar]

...
New appointment will be interesting - and hopefully will demonstrate (even if only a token gesture) that they are a dynamic diverse organisation.
I would hope they go for the best rather than tokenism.

[percy]

I would hope they go for the best rather than tokenism.

I think it will be interesting to see whether they go for someone with a banking background, or with their future being digital, they go with a tech person.

[winner69]

I think it will be interesting to see whether they go for someone with a banking background, or with their future being digital, they go with a tech person.

Now you talking sense percy

A young(ish) person who has some nous how the world works these days would be great. Plenty of women fit that bill

Need to keep refreshing our Board - too old and too male dominated.

[Snow Leopard]

...Need to keep refreshing our Board - too old and too male dominated.

Most sensible thing you have posted since you last posted something this sensible :).

Best Wishes
Paper Tiger

[winner69]

Most sensible thing you have posted since you last posted something this sensible :).

Best Wishes
Paper Tiger

Thanks for 'liking' it

Made my day

[trader_jackson]

Thanks for 'liking' it

Made my day

I'm also liking HBL's share price, at $1.36

[percy]

I'm also liking HBL's share price, at $1.36

Wouldn't you just hate it, if on the day you resigned as a director,the shares went up 3%?!...lol.

[Raz]

Now you talking sense percy

A young(ish) person who has some nous how the world works these days would be great. Plenty of women fit that bill

Need to keep refreshing our Board - too old and too male dominated.

In the US in this situation they promote an executive post bootcamp or pay the money and get an Ex or current DEV TL on the board...then I would take their tech strategy seriously and the other players would also. Actually if they had any vision i can think of a 25 year old who would be ideal in CHCH , a very dynamic young woman with high public profile with her own start up, coupled with professional qualifications...they could figure out who I'm talking about in three minutes if they know what google is all about. So much potential with this bank unrealised.

Actually i am surprised no bank has scooped her up, possibly she is too busy to bother...they most likely don't see the fit with someone from a start up culture however if they want to be the disruptor locally, they should seek a way.


disc. comment from a twenty year venture capitalist

[beetills]

Heartland Bank has won the endorsement of Consumer NZ.Heartlands Senior Finance has been accredited under Consumer NZs Consumer Business Programme.

[King1212]

Heartland Seniors Finance becomes Consumer TrustedWednesday, 27 July 2016, 10:53 am
Press Release: Consumer NZ (http://info.scoop.co.nz/Consumer_NZ)



27 July 2016
Heartland Seniors Finance becomes Consumer Trusted

Heartland Seniors Finance has been accredited under Consumer NZ’sConsumer Trusted (http://consumernz.cmail19.com/t/i-l-kyiimy-nauyjhjk-y/) business programme.
To become Consumer Trusted, a business must meet Consumer NZ’s strict code of conduct that focuses largely on consumer law such as the Fair Trading Act and Consumer Guarantees Act. A business must show it exceeds the minimum requirements of the law.
Heartland Seniors Finance, a division of Heartland Bank, offers Home Equity Loans that allow seniors to borrow against the equity in their home without selling their property.
Customers take out a loan against their home. The loan is only repayable, including interest, when the borrower sells the property or moves from the property permanently.
Consumer NZ general manager – business Derek Bonnar said gaining Consumer Trusted status was a great achievement for Heartland Seniors Finance.
“This type of financial product is not widely available in New Zealand. We assessed the Home Equity Loan carefully and were impressed with the commitment Heartland Seniors Finance had made to delivering an excellent customer experience and to ensure customers were kept well informed,” Mr Bonnar said.
Heartland Seniors Finance requires borrowers obtain independent legal advice and strongly recommends they get independent financial advice to ensure they are well informed. It also guarantees continued ownership of the property, equity protection options and a 30-day cooling-off period.



Heartland Seniors Finance was elated to receive Consumer Trusted accreditation.
“We are passionate about our Home Equity Release product and we are proud to have achieved this endorsement,” Heartland Seniors Finance national manager Lisa Hatfield said.
"It’s great to know that we are giving our seniors this additional level of comfort in our product.”
The Consumer Trusted programme has been running since 2014 and encourages businesses to deliver exceptional customer service.
By using Consumer Trusted businesses, consumers can be confident they are dealing with market leaders that put the customer first. Consumer Trusted businesses are required to deliver over and above consumer law.
Consumer NZ is an independent, not-for-profit organisation. Winners of Consumer NZ endorsements and awards can license use of the awards for marketing and promotions. All revenue raised from the endorsement programme goes back into the research Consumer NZ does to help New Zealanders get a fair deal.

[K1W1G0LD]

Interesting to see the W69 effect remains firmly in place. $1.40 seems to be the figure most commonly used.The bigger picture will emerge in time , once some restraint is introduced or medication increased , whichever comes first.

[percy]

Heartland Seniors Finance becomes Consumer TrustedWednesday, 27 July 2016, 10:53 am
Press Release: Consumer NZ (http://info.scoop.co.nz/Consumer_NZ)



27 July 2016
Heartland Seniors Finance becomes Consumer Trusted

Heartland Seniors Finance has been accredited under Consumer NZ’sConsumer Trusted (http://consumernz.cmail19.com/t/i-l-kyiimy-nauyjhjk-y/) business programme.
To become Consumer Trusted, a business must meet Consumer NZ’s strict code of conduct that focuses largely on consumer law such as the Fair Trading Act and Consumer Guarantees Act. A business must show it exceeds the minimum requirements of the law.
Heartland Seniors Finance, a division of Heartland Bank, offers Home Equity Loans that allow seniors to borrow against the equity in their home without selling their property.
Customers take out a loan against their home. The loan is only repayable, including interest, when the borrower sells the property or moves from the property permanently.
Consumer NZ general manager – business Derek Bonnar said gaining Consumer Trusted status was a great achievement for Heartland Seniors Finance.
“This type of financial product is not widely available in New Zealand. We assessed the Home Equity Loan carefully and were impressed with the commitment Heartland Seniors Finance had made to delivering an excellent customer experience and to ensure customers were kept well informed,” Mr Bonnar said.
Heartland Seniors Finance requires borrowers obtain independent legal advice and strongly recommends they get independent financial advice to ensure they are well informed. It also guarantees continued ownership of the property, equity protection options and a 30-day cooling-off period.



Heartland Seniors Finance was elated to receive Consumer Trusted accreditation.
“We are passionate about our Home Equity Release product and we are proud to have achieved this endorsement,” Heartland Seniors Finance national manager Lisa Hatfield said.
"It’s great to know that we are giving our seniors this additional level of comfort in our product.”
The Consumer Trusted programme has been running since 2014 and encourages businesses to deliver exceptional customer service.
By using Consumer Trusted businesses, consumers can be confident they are dealing with market leaders that put the customer first. Consumer Trusted businesses are required to deliver over and above consumer law.
Consumer NZ is an independent, not-for-profit organisation. Winners of Consumer NZ endorsements and awards can license use of the awards for marketing and promotions. All revenue raised from the endorsement programme goes back into the research Consumer NZ does to help New Zealanders get a fair deal.

What a fantastic endorsement.
Reflects on the way Heartland Bank conduct themselves,and do business.
Confirms that Heartland Bank continues to do what they say they will do.
They spent a great deal of time laying solid foundations.
Now we are seeing the next stage of their growth,bringing excellent products,such as RELs and "open for business" , direct to their customers on line.

[winner69]

Interesting to see the W69 effect remains firmly in place. $1.40 seems to be the figure most commonly used.The bigger picture will emerge in time , once some restraint is introduced or medication increased , whichever comes first.

Cmon kiwigold, thats not very nice of you but i'll forgive you seeing it was late evening post.

Whatever no need for restraint etc ....since I've got 'enthusiastic' again the share price has gone from sub 120 to over 130. Thats 10% in a short time - makes me happy and no need for happy pills.

Even with no acquisition on the horizon thst 140 will be here again soon, maybe next week? Then in August a profit upgrade and onwards and upwards to 160

[trader_jackson]

Well HBL was a bit of a fizzier... but still "well positioned"

Moving on to this week: possible announcement early next week confirming profit at the upper end of guidance?

[percy]

Well HBL was a bit of a fizzier... but still "well positioned"

Moving on to this week: possible announcement early next week confirming profit at the upper end of guidance?

Yes Friday was "The Big Fizzer" for me.
Waited all day for updates from both HBL and SCL.
Nothing from either.!!!
However as you so rightly point out we still remain "well positioned."

[winner69]

Yes Friday was "The Big Fizzer" for me.
Waited all day for updates from both HBL and SCL.
Nothing from either.!!!
However as you so rightly point out we still remain "well positioned."

Dissappointing eh

It was a year ago that they gave that $51m-$55m guidance ...and reaffirmed it several times since

The power of proactive provisioning eh - you end up reporting what you want and justenough to keep the punters happy. No more, no less.

They know the result already.

Will they ssy, like t-j says, 'NPAT at upper end of guidance' or what winner would like 'NPAT of $56m which exceeds previous guidance'. They probably made $58m anyway but heck couldn't report that could we as put pressure on next year wouldn't it

What about next year F17 guidance - a conservative $58m to $63m I reckon

Another boring year coming p - especially if $60m alredy priced in

[kizame]

Dissappointing eh

It was a year ago that they gave that $51m-$55m guidance ...and reaffirmed it several times since

The power of proactive provisioning eh - you end up reporting what you want and justenough to keep the punters happy. No more, no less.

They know the result already.

Will they ssy, like t-j says, 'NPAT at upper end of guidance' or what winner would like 'NPAT of $56m which exceeds previous guidance'. They probably made $58m anyway but heck couldn't report that could we as put pressure on next year wouldn't it

What about next year F17 guidance - a conservative $58m to $63m I reckon

Another boring year coming p - especially if $60m alredy priced in

There could still be a surprise in the offing,if and when they make that aquisition,providing it's big enough,will be the game changer.
The nice thing is,they are looking hard,they are not buying just anything,and boring can be beautiful.

[percy]

[QUOTE=kizame;630381 boring can be beautiful.[/QUOTE]

Boring is not only beautiful,but is also making me wealthy..
Love it.lol

[winner69]

Updating things in readiness for the results announcement and came across this

Broker analysts like Craigs seem to like using Price/Book ratios to value Heartland - using 1.1 times and sometimes 1.2 times

Plotting book value against the share price seems to say that this is how the market values Heartland as well.

Book value creeping up slowly over the last few years (high pay out ratio and new shares don't help) and over time so is the share price (with the occasional dips and spikes).

Couldn't help but notice that the recent price rise has taken this to close to 1.3 the expected book value as at June 16 of $1.05 ..... suggesting that a good $60m guidance for F17 is already built in to the current price.

No acquistions on the horizon so nextbigthing I think our $1.60 target is a bit outrageous

[percy]

Updating things in readiness for the results announcement and came across this

Broker analysts like Craigs seem to like using Price/Book ratios to value Heartland - using 1.1 times and sometimes 1.2 times

Plotting book value against the share price seems to say that this is how the market values Heartland as well.

Book value creeping up slowly over the last few years (high pay out ratio and new shares don't help) and over time so is the share price (with the occasional dips and spikes).

Couldn't help but notice that the recent price rise has taken this to close to 1.3 the expected book value as at June 16 of $1.05 ..... suggesting that a good $60m guidance for F17 is already built in to the current price.

No acquistions on the horizon so nextbigthing I think our $1.60 target is a bit outrageous

I expect weakness in HBL's share price tomorrow as Winner69 sells out.!!..lol.

[winner69]

Obviously full year npat going to be in the $51m to $55m range

So no 'stunning result' but just a solid one come August 16th when Jeff says ' $54.7m which is at the upper end of guidance"

So pro-active provisioning works

[janner]

Obviously full year npat going to be in the $51m to $55m range

I can imagine the yells of of delight and outbursts of 'stunning result' come August 16th when Jeff says ' $54.7m which is at the upper end of guidance"

So pro-active provisioning works

Nothing obvious about it winner69..

Behave yourself... There are children present ..

[K1W1G0LD]

Share price got a bit ahead of itself today, only to be brought back to earth with a thump in the afternoon session by Mr market. encouraging sign nevertheless.

[winner69]

Global Dairy prices up strongly overnight - whole milk powder nearly 10%

Dairy crisis over

Economy going gang busters - this just helps

And Wheeler being sucked in by bank economists to cut the OCR (even down to 1.5% they suggest now) the boom will continue

All good for Heartland - key drivers of profitability are general economic conditions and employment levels. Both looking good

[trader_jackson]

Global Dairy prices up strongly overnight - whole milk powder nearly 10%

Dairy crisis over

Economy going gang busters - this just helps

And Wheeler being sucked in by bank economists to cut the OCR (even down to 1.5% they suggest now) the boom will continue

All good for Heartland - key drivers of profitability are general economic conditions and employment levels. Both looking good

You would think you would see a sizable jump in the share price today, like other days, but hopefully this time it will hold onto gains... not to many reasons not to hold HBL right now that is for sure... the highest interest margin on the market is also a nice title to have :t_up:

[Snoopy]

Global Dairy prices up strongly overnight - whole milk powder nearly 10%

Dairy crisis over


Er hardly. Even with the 10% rise in whole milk price, the average dairy farmer is still only receiving 70% of his production costs. And with the new season's calving yet to kick in, most farmers have no milk to sell anyway yet. I would say the real dairy crisis is only just beginning with sharemilkers/farmers still borrowing to live, making a loss and having no cashflow. Heartland is still in big trouble with their dairy portfolio I think.

SNOOPY

[winner69]

Er hardly. Even with the 10% rise in whole milk price, the average dairy farmer is still only receiving 70% of his production costs. And with the new season's calving yet to kick in, most farmers have no milk to sell anyway yet. I would say the real dairy crisis is only just beginning with sharemilkers/farmers still borrowing to live, making a loss and having no cashflow. Heartland is still in big trouble with their dairy portfolio I think.

SNOOPY

Don't be so depressing Snoopy me old mate

It's all about sentiment

Headlines this morning said dairy farmers woke up this morning with a big smile on their faces - isn't that a good sign

Next you be telling me that snow in the south couldn't have come at a worse time - just as the little calves are coming into the world

[nextbigthing]

Er hardly. Even with the 10% rise in whole milk price, the average dairy farmer is still only receiving 70% of his production costs. And with the new season's calving yet to kick in, most farmers have no milk to sell anyway yet. I would say the real dairy crisis is only just beginning with sharemilkers/farmers still borrowing to live, making a loss and having no cashflow. Heartland is still in big trouble with their dairy portfolio I think.

SNOOPY

Dear Snoopy,

Thank you for your effective endorsement of HBL.

Kind regards,
NBT

[winner69]

It has happened again - dairy prices surge and Heartland share price surges. (opposite also applies)

Dairy crisis over - no worries for Heartland. After this years proactive provisioning heaps to write back in FY17

At this rate a new all time high in a few days time

[Snow Leopard]

There is a story that my father used to tell me when I was young:
'The sheep dog who cried woof'
Just in case your father never told it to you it goes like this:

The sheep dog who cried woof

The sheep dog kept crying woof and everybody came running to save the sheep from the woof, but there was no woof.

People got fed up of missing their dinner and favourite TV programs because they were running to save the sheep from the woof and they was no woof.

So after a while they said 'Bad dog' and stopped coming to save the sheep when the sheep dog cried woof.

Then one day the woof came...

The End.

Best Wishes
Paper Tiger

[Cricketfan]

Sounds similar to The Boy Who Cried Wolf, except with a sheep dog and a woof (whatever that is).

[winner69]

There is a story that my father used to tell me when I was young:
'The sheep dog who cried woof'
Just in case your father never told it to you it goes like this:

The sheep dog who cried woof

The sheep dog kept crying woof and everybody came running to save the sheep from the woof, but there was no woof.

People got fed up of missing their dinner and favourite TV programs because they were running to save the sheep from the woof and they was no woof.

So after a while they said 'Bad dog' and stopped coming to save the sheep when the sheep dog cried woof.

Then one day the woof came...

The End.

Best Wishes
Paper Tiger

So you telling us that the Heartland share price is about to collapse?

[Deej5]

I think the dog cried "WOF" not "Woof". It means Warrant Of Fitness. We are well positioned!

[Snow Leopard]

Sounds similar to The Boy Who Cried Wolf, except with a sheep dog and a woof (whatever that is).

https://www.wordans.com/wvc-1329902125/wordansfiles/product_previews/2012/2/22/5192/5192_650.jpg

Best Wishes
Paper Tiger

Disc: hold HBL, but not complacent about it.

[Beagle]

Er hardly. Even with the 10% rise in whole milk price, the average dairy farmer is still only receiving 70% of his production costs. And with the new season's calving yet to kick in, most farmers have no milk to sell anyway yet. I would say the real dairy crisis is only just beginning with sharemilkers/farmers still borrowing to live, making a loss and having no cashflow. Heartland is still in big trouble with their dairy portfolio I think.

SNOOPY


https://www.wordans.com/wvc-1329902125/wordansfiles/product_previews/2012/2/22/5192/5192_650.jpg

Best Wishes
Paper Tiger

Disc: hold HBL, but not complacent about it.

Beagles don't woof much but they've usually very good at sniffing out trouble, (why else would the airport use them).

[Ghost Monkey]

Beagles don't woof much but they've usually very good at sniffing out trouble, (why else would the airport use them).

You must have a well behaved beagle. Mine woof's plenty. Always for food.

Perhaps Snoopy just doesn't like what he's being fed today?

[winner69]

Even if they announce $54.7m npat it really is more than that

Remember they spent a million or two on that 28 page booklet they sent to shareholders outlining how a capital return might work. One non- recurring expense and possibly a couple of others.

Heartland probably wont be returning capital in the foreseeable future. I reckon they will follow the other banks and shore up their capital base in these apparent turbulent times globally.

Doesn't stop them raising some Tier 2 capital to fund lending growth, particularly so seeing no acquisition on the horizon

Back to today - shareprice 140 and a new all ti me high close (or maybe tomorrow)

[winner69]

Hope they include some numbers as to how many zillions they lending through their de facto shopfront in Harmoney.

Seems like more than half of Harmoney lending is Heartlands - not really P2P is it? Do they get first dibs of everything leaving the rest to the keen punters?

With returns (RAR) probably >12% (Heartland must get preferential rates eh) a good lurk

Today tht 140 day for the share price?

[trader_jackson]

Hope they include some numbers as to how many zillions they lending through their de facto shopfront in Harmoney.

Seems like more than half of Harmoney lending is Heartlands - not really P2P is it? Do they get first dibs of everything leaving the rest to the keen punters?

With returns (RAR) probably >12% (Heartland must get preferential rates eh) a good lurk

Today tht 140 day for the share price?

I'd like to see that 1.40 today, if it wasn't for a few 'last minute' panic sell's yesterday, we would certainly be looking comfortably at the big 1.40 today... lets see I suppose.

[pierre]

I'd like to see that 1.40 today, if it wasn't for a few 'last minute' panic sell's yesterday, we would certainly be looking comfortably at the big 1.40 today... lets see I suppose.

$1.40 today - better a day late than never!

[winner69]

$1.40 today - better a day late than never!

Almost an all time high

Only blue sky ahead

We're on a roll here

Nextbigthing did say 160

[Snow Leopard]

Rising on low volume...

Will not draw a chart...

On the high side of reasonable value...

End of August for the official results announcement, right?

Best Wishes
Paper Tiger

PS: I did not mention... :scared:

[pierre]

End of August for the official results announcement, right?



Actually, the announcement will be made on Tuesday 16 August. The news must be so good they can't wait to deliver it!:)

A bientot
Pierre

[Snow Leopard]

Actually, the announcement will be made on Tuesday 16 August. The news must be so good they can't wait to deliver it!:)

A bientot
Pierre

J'avais oublié, merci.

Best Wishes
Paper Tiger

[K1W1G0LD]

Almost an all time high

Only blue sky ahead

We're on a roll here

Nextbigthing did say 160

Well done winner ,6 months of ramping finally got you there. :)

[Joshuatree]

Ramping both ways:p

[King1212]

It is not thier ramping..I think it is truly investors seek a dividend yield in the current market..where RNB is expecting to cut the interest. Mine 10k in term deposit just returns less than 130 buck after tax for 6months....where HBL will pay around 5cents a share in the next couple weeks....

[winner69]

Well done winner ,6 months of ramping finally got you there. :)

Taken an awful long time eh but has been a decent sort of trade, not brilliant but OKish

With no acquisition on the horizon, a capital return unlikely and likelihood of only 'modest' growth being signaled next week it might be time to move on to greener pastures - especially as 140 is getting into over valued territory

Let's see what next week brings - could be a surprise

[winner69]

Wow - share price finally made it back to where it was 19 months ago

Surely has been a bumpy ride in that time

From 140 down to 107 and then back up to 134 and then a tumble to 110 and back to 129 before a collapse to 116 and lo and behold now 140

Fun share to play with

If it's not going to kick on 160 let's hope there be another tumble / collapse

You never know the DRP this time around could be 155 (not that good as you won't get many share) or it might be 120 (good as you get heaps of cheap shares)

[King1212]

Where is Percy! His favourite stock reaches recent high....he must be glad....!

[trader_jackson]

Mr Market, please stop valuing HBL at an almost reasonable figure, my DRP will be coming up soon, and it would be great if you could please forget all of HBL's great fundamentals and potential, and drop the price to 50 cents just for a short time while I get the DRP.

History would suggest HBL would 'unreasonably' drop for a short period of time which often corresponds with the DRP, so if this could be repeat that would be great.

Disclosure: was good to top up at $1.19

[King1212]

Mr Market, please stop valuing HBL at an almost reasonable figure, my DRP will be coming up soon, and it would be great if you could please forget all of HBL's great fundamentals and potential, and drop the price to 50 cents just for a short time while I get the DRP.

History would suggest HBL would 'unreasonably' drop for a short period of time which often corresponds with the DRP, so if this could be repeat that would be great.

Disclosure: was good to top up at $1.19

well done TJ!

[percy]

Where is Percy! His favourite stock reaches recent high....he must be glad....!

Yes another great day for me.Book selling this morning,attending a small company's agm this afternoon,all rounded off with a very pleasant Sharetrader meeting tonight.
Now I look forward to next Tuesday, and HBL's result,and most probably a nice Sharetrader meeting in Blenheim.

[Kees]

Yes another great day for me.Book selling this morning,attending a small company's agm this afternoon,all rounded off with a very pleasant Sharetrader meeting tonight.
Now I look forward to next Tuesday, and HBL's result,and most probably a nice Sharetrader meeting in Blenheim.

Sharetrader meeting in Blenheim.[/QUOTE]

now that's close might come .

[winner69]

HBL chart at interesting point

That 140 level can be seen as resistance - been there (and close to it) before but couldn't break through

When broken resistance often becomes support

So when the share prices gets over 140 and stays there for a few days it is likely we will never see sub 140 again. That 140 will be a solid support level

Good eh - sorry tj - no cheap shares this year in the drp - but in a years time you'll look back abd say 'yes, they were cheap'

[winner69]

Depth looking good for that break out over the 140 mark

Bring it on

[winner69]

Just as well dairy loans aren't an issue for Heartland - been managed well

This advisor says banks playing hard on indebted dairy farmers and outlook not good for many
http://www.radionz.co.nz/audio/player?audio_id=201811685

[winner69]

Did I see $1.42.a few minutes ago

It's all blue sky now

The world is so full of happy punters at the moment no matter what npat is announced it will be brilliant - and awesome if Jeff says $60m plus for next year

Nextbigthing - getting closer by the day

[Raz]

Did I see $1.42.a few minutes ago

It's all blue sky now

The world is so full of happy punters at the moment no matter what npat is announced it will be brilliant - and awesome if Jeff says $60m plus for next year

Nextbigthing - getting closer by the day


haha too funny