HGH - Heartland Group Holdings

[percy]

Onwards and upwards.



Back to Heartland. I am surprised that the stock didn't hurtle past 70c with gusto, but on reflection it is still early days - they're not a bank yet, merely able to pursue a retail banking strategy.

At the AGM someone questioned HNZ's low profile.Question was answered; that until they had the banking licence it was pointless spending money advertising Heartland Building Society.However, there would be no low profile when they started promoting Heartland Bank.Once Heartland Bank advertising starts, then I would expect more interest in HNZ shares.We will see half year result in February,and I expect each announcement will attract more interest. A listed NZ Bank,with growing earnings,paying a dividend,sound management, [who have done what they said they would do],excellent equity ratio, should see HNZ coming up in more investor's horizons.

[forest]

Well said Percey, and with their banking licence now it seems likely that HNZ funding cost will reduce.
Reduce funding cost is likely to increase margins and happier share holders.

[GRIFFIN]

With just over 200k on the buy side total , and over 900k at 69 and 70 cents alone i thought there may have been more zing on the buy side with the banking licence in place but still early days.

[Baddarcy]

No No No Turmeric......there is no strong support at 70....There is strong reistance at 70.

HNZ uptrend has paused. This is quite common after a rapid uptrend ..the stock is taking a breather due to exhaustion....the short termers are profit taking together with a decrease of buyer demand .....

HNZ has tested the 70 c resistance and has so far failed...this is seen as bearish...however for the optimists... just recently I think there has been some positive TA signals (people with Metastock with EOD data feed may confirm this)...if so then that 70c resistance could be under threat and a likelihood of HNZ breaking through that 70c barrier....this would be seen as bullish and a rapid resumption of the uptrend will occur.

Lack of Yahoo data for HNZ makes Incredible Charts useless so this simple chart below has to suffice.

http://i458.photobucket.com/albums/qq306/Hoop_1/hnz26112012.gif

The resistance at 70c is proving a tough ask to break. I was sure the banking licence would do the trick, but it looks like it is going to be a slow grind rather than a sprint.

Saw an interesting comment from HH Green i read today that they were surprised by the lack of movement upwards, they were expecting 7c-10c apparently.

[kizame]

The resistance at 70c is proving a tough ask to break. I was sure the banking licence would do the trick, but it looks like it is going to be a slow grind rather than a sprint.

Saw an interesting comment from HH Green i read today that they were surprised by the lack of movement upwards, they were expecting 7c-10c apparently.
The resistance has already been broken Baddarcy,if you look back to Dec. 4 the stock closed at .71c then retraced in the following days.
So uptrend continues.

[blobbles]

You have to be fair to Baddarcy, his post was on the 27th of Nov before HNZ broke 0.71.

I aren't sure why people would be selling at this level though. I won't even be thinking about selling for the next long while as I think the company has a very bright future now the banking license is achieved. Innovative products in a market that appears to be at the bottom of its cycle... improving finances, improving stability, increasing profits... realistic management... why sell? These guys could be hitting 100's of millions in profits in 5 years or so. That translates to a damn good dividend. At least a medium term hold for me, long if they keep doing what they say.

[blobbles]

*my last post of "100's of millions" is a personal opinion based on potential growth for their new products, nothing to actually back that up!*

[Snoopy]

No old ANZ Cortina with a GT badge. Latest model bank tourer with all the bells and whistles.NZ owned bank serving NZ "Heartland". A true thoroughbred. In fact a good replacement for that National bank one ANZ sent to the pet food factory.


I can't say I'm happy about ANZ dropping their National Bank Brand. But I am not unhappy enough to close my National bank account and move to Heartland yet!

I was surprised at new RBNZ governor Wheeler breaking the Reserve Bank rules and declaring Heartland a bank after little more than a year in business. I guess as the new governor, he can now write his own rules. But despite stepladders being dispatched all over the country, so they can hand write 'bank' next to the up to now underdressed new 'Heartland' (blank) green and black livery, you can be sure of one thing. Heartland bank is not too big to fail. That under the mattress bank will be hard to dislodge as a safe haven for some OAPs.

SNOOPY

PS Just noticed something. If they had officially called themselves 'Heartland (blank)' up to now the paintbrush transition would have been as easy as painting out the now superfluous 'l'!

[percy]

I can't say I'm happy about ANZ dropping their National Bank Brand. But I am not unhappy enough to close my National bank account and move to Heartland yet!

I was surprised at new RBNZ governor Wheeler breaking the Reserve Bank rules and declaring Heartland a bank after little more than a year in business. I guess as the new governor, he can now write his own rules. But despite stepladders being dispatched all over the country, so they can hand write 'bank' next to the up to now underdressed new 'Heartland' (blank) green and black livery, you can be sure of one thing. Heartland bank is not too big to fail. That under the mattress bank will be hard to dislodge as a safe haven for some OAPs.

SNOOPY

PS Just noticed something. If they had officially called themselves 'Heartland (blank)' up to now the paintbrush transition would have been as easy as painting out the now superfluous 'l'!

Disclosure.A family trust I am a trustee to recently brought some ANZ shares.Trust also increased it's holding of HNZ.Losing National Bank brand is a sad day.
I think the delay in granting the HNZ bank licence was because new RBNZ governor was not wanting a "black mark" early on his watch.
From what I understand you do not just apply for a bank licence on the form you posted.A lot of discussions go on before
"you are invited " to submit an application.HNZ have spent a lot of money paying for consultants to prepare the information RBNZ have wanted. [ May be more correct to say RBNZ consultants.]
The give away that all was on track was given 10/4/12 when Sean Kam resigned as CFO.Those who knew his backgound knew he had done the job.

[shambles]

Plenty of resistance at .70c and seems to keep growing, I wonder who is selling .. lot's of small players or someone gradually offloading a large chunk?

[kizame]

Plenty of resistance at .70c and seems to keep growing, I wonder who is selling .. lot's of small players or someone gradually offloading a large chunk?

No I think it is hanging around this level because nobody really feels the need to go after the stock just yet,it has already broken resistance,so it is just a matter of patience.
A little time needs to pass, so they can quietly put some runs on the board,a lot needs to be done yet,and I think a good stock with potential like this needs to be a solid performer,with gradual increases.

Meanwhile if you hold,you can be comforted by the fact that it is well under asset backing,profitable,has a banking licence with good potential.

[Balance]

No I think it is hanging around this level because nobody really feels the need to go after the stock just yet,it has already broken resistance,so it is just a matter of patience.
A little time needs to pass, so they can quietly put some runs on the board,a lot needs to be done yet,and I think a good stock with potential like this needs to be a solid performer,with gradual increases.

Meanwhile if you hold,you can be comforted by the fact that it is well under asset backing,profitable,has a banking licence with good potential.

Relax.

Nothing special about 70 cents save that many are taking their gains from what had been a very disappointing stock.

HNZ just became a takeover target for one of the overseas banks with money to burn.

They will pay NTA and will be successful.

[macduffy]

Relax.

Nothing special about 70 cents save that many are taking their gains from what had been a very disappointing stock.

HNZ just became a takeover target for one of the overseas banks with money to burn.

They will pay NTA and will be successful.

So there are still a few overseas banks with money to burn?

Banking is a capital-hungry business - and will beome even more so once the new Basel "rules" become effective. I'm not sure that there's too many who'd want to spend it on HNZ at this stage. In fact, HNZ shareholders need to keep in mind that calls for more equity - or dilution by issue to new shareholders - will be on the cards if the new bank grows as quickly as is hoped.
I don't hold but cheering for those who do.

:)

[percy]

The banking licence for HNZ will mean they can look at any acqusition from a position of strength.The strong equity ratio gives them room to expand without calling on shareholders.Not taking on the majors for home loans means they can make better, more profitable use of existing capital.Appreciate your cheers.!

[macduffy]

The banking licence for HNZ will mean they can look at any acqusition from a position of strength.The strong equity ratio gives them room to expand without calling on shareholders.Not taking on the majors for home loans means they can make better, more profitable use of existing capital.Appreciate your cheers.!

Home loans are some of the most favourably weighted - ie most lightly capital intensive - lending that a bank can do. I'd expect that sector of their business to grow most quickly in the years ahead.

[Snoopy]

No I think it is hanging around this level because nobody really feels the need to go after the stock just yet,it has already broken resistance,so it is just a matter of patience.
A little time needs to pass, so they can quietly put some runs on the board,a lot needs to be done yet,and I think a good stock with potential like this needs to be a solid performer,with gradual increases.

Meanwhile if you hold,you can be comforted by the fact that it is well under asset backing,profitable,has a banking licence with good potential.


A last a voice of reason on this thread! Well summarized Kizame, and I guess from your location that not being a one-eyed Cantab has allowed you to come to your position. A word of warning though. If you ever make it to an HNZ AGM, you must not talk like that, or you will be in for a lynching by your one-eyed fellow shareholders.

Most people who had bought into a share at 50c and seen it rise to 70c would not call that result 'disappointing'. Some will never be satisfied.

SNOOPY

[percy]

SNOOPY.
Don't recall you going to the AGM,so again your post is ill informed.!

[Snoopy]

SNOOPY.
Don't recall you going to the AGM,so again your post is ill informed.!


I am not an HNZ shareholder Percy, well not yet anyway. So I have a very good excuse for not going to the AGM.

SNOOPY

[Xerof]

Most people who had bought into a share at 50c and seen it rise to 70c would not call that result 'disappointing'.

Agreed, but in this case most bought into this at 88, after buying in to PGC at well north of 40/70/100+++.

Only the chosen few got these in significant volume at bedrock prices off Cur. Keep in mind that the sub-underwriters to the last issue (ahem, those who actually honoured their underwriting obligation) have only just got their heads above water (before holding costs)

and remember, all those who thought a banking license was in the bag, had already bought (averaged down is probably more accurate)....this is a classic buy the rumour, sell the fact scenario, at least for the meantime.

After two or three years of being underwater with their shareholding in this pairing (PGC/HNZ), I think you will find human nature looks for an escape hatch -(breakeven is usually good enough)

As rightly said, they need time to prove themselves and get runs on the board, which I am sure they will do, but in the meantime, there is an awful lot of overhang/stale retail holders in this, even before you consider what the "shaft Kerr" opportunists at sub-50 might be looking to do

Not sure I will include it in next years picking comp - maybe the year after........

[percy]

I am not an HNZ shareholder Percy, well not yet anyway. So I have a very good excuse for not going to the AGM.

SNOOPY
Should you not be a shareholder by next AGM,you can come along as my guest.So no excuse next year.!!!!!!!
I am sure you,like any one attending an AGM would get a lot better understanding of the company.HNZ meeting covered a lot of ground.Very happy to answer questions.Directors and management were very keen to talk to shareholders after the meeting.

[winner69]

Had a chat with Bruce McLachlan from that other small BANK the o day. He seems a good guy and has a pretty clear vision of where he wants to take his BANK. Like Greenslade he has had plenty of experience as wel

I like the cooperative model .....fits with the principled side of me. Gave them some more dosh today ...at least greedy shareholders won't be making any money of it.

The way the world is heading and how generational values are deveoloping i wouldnt be surprised to see a rise in these types of cooperatively owned businesses ....not this year but in due course

Heck where is the occupy meeting

[percy]

Not sure I will include it in next years picking comp - maybe the year after........

I saw that !!!
Await your decision with baited breath.!!

[Master98]

why their own director damping shares at this stage? need cash for xmas?

[SCOTTY]

The seller was Sean Kam, the former Chief Financial Officer who resigned back in April.

[Master98]

The seller was Sean Kam, the former Chief Financial Officer who resigned back in April.

Seems he don't have much confidence to hold.

[percy]

Seems he don't have much confidence to hold.

I don't know why he sold,so would think it foolish to pass judgement.

[winner69]

jeez nothing on this threasd for 24 hours so i though better post something

this analyst obviously didn't go to the ASM .... fancing putting some cons in his report .... on Stuff



A Broker's View: Heartland New Zealand

Last updated 05:00 22/12/2012
A broker's view: Heartland New Zealand

Sector: Financial services

Stock code: HNZ

Overview: Heartland arose from a three-way merger between CBS Canterbury, Southern Cross Building Society and MARAC Finance. The company subsequently purchased PGC Wrightson Finance. Heartland targets small to medium-sized businesses and the rural sector. On Monday Heartland announced the Reserve Bank had registered it as a bank, making it the only New Zealand operated, controlled and managed bank on the NZX.

Pros: Being a registered bank should be of great benefit to Heartland's earnings. It will improve its standing with depositors and borrowers and help it increase its interest margin. Its most recent result was promising, with underlying earnings of $20.2m. Particularly important in that result was the improvement in earnings in the second half. That improvement can, in part, be attributed to an improved interest margin. Further improvement in interest margins thanks to the banking license should increase earnings. The company trades at a discount of to its net asset backing of 90 cents per share. (Net asset backing is calculated by subtracting total debt from total assets and dividing by the number of shares.)

Cons: The discount to net asset backing could result from some legacy issues with the quality of the lending book, particularly in the non-core property book. This could lead to loan write-downs if the funds cannot be recovered. The credit rating of BBB- is at the lower end of investment grade ratings.

Price performance: After opening at 95 cents a share on February 1 2011, Heartland reached lows of 43 cents earlier this year before recovering to recently trade at 70 cents.

Investment outlook: The market still requires more evidence of consistent earnings from the company. If they can continue to produce good results their share price will increase. Suits investors with a high propensity for risk.

*A Broker's View is written by NZX broker and investment adviser Hamilton Hindin Greene Limited. This article represents general information provided by Hamilton Hindin Greene, who may hold an interest in the security. It does not constitute investment advice. Should you wish to receive personalised advice please contact an authorised financial adviser.

[percy]

I believe Grant Williamson from HHG attended the AGM.
"Suits investors with a high propensity for risk" appears a rather suspect comment, when HNZ have just been granted a bank licence,and have an equity ratio of 16% which would be the envy of all NZ financial institutions.

[winner69]

I believe Grant Williamson from HHG attended the AGM.
"Suits investors with a high propensity for risk" appears a rather suspect comment, when HNZ have just been granted a bank licence,and have an equity ratio of 16% which would be the envy of all NZ financial institutions.

Might be the envy and relative to other nz instos a good number .....but is it really a good number?

[Balance]

Might be the envy and relative to other nz instos a good number .....but is it really a good number?

Another on the one hand, on the other hand analysis.

Bunch of wallies, some of these analysts.

[winner69]

Warren Buffett likes Wells Fargo because it is the least leveraged of the majors ....by a long way..

Their ratio is only 8%

Jezebel no wonder the world is in a perilous state

[percy]

Warren Buffett likes Wells Fargo because it is the least leveraged of the majors ....by a long way..

Their ratio is only 8%

Jezebel no wonder the world is in a perilous state

Now we are talking the same language.RBNZ liked it enough to grant HNZ a bank licence.
Talk at the AGM was that the "non core property" was moving along.Auckland units sold,better security on a number of properties,lifestyle properties still slow to sell,building in Wellington that accounted fo 15% of "non core properties"ie about $24mil was now ready to be put on the market.
In a lot earlier post I pointed out HNZ do not have have the residential property problems the Australian Banks have.[in Australia].You picked up on this at the time.

[percy]

I rang Chairman Bruce Irvine on Tuesday to congratulate him of the bank licence.He was in Melborne,so left a message.There was a message on my phone on Friday from Bruce telling me he received my message and thanks.
Most impressed he found the time at this time of year to ring me.

[POSSUM THE CAT]

Percy will you shift all your bank accounts to them then. This cat will not put any money anywhere near them.

[percy]

Percy will you shift all your bank accounts to them then. This cat will not put any money anywhere near them.

No.I bank with Westpac.I have a home run business,dealing with over 200 schools and libraries.I have them on direct internet banking and changing would mean a mess.I have no need to borrow money,so will not be using their services.I do have a term deposit at Westpac that I should change to HNZ.I was a long term shareholder of PGC and never used Marac.At present, a trust I am a trustee for, hold ANZ bank shares.I have in the past owned Trust Bank shares and when taken over I held Westpac shares.I think Westpac are only average.I run cash management a/cs NZ and Australian with Craigs,who give me excellent service.

[mouse]

Heartland Bank has maybe a lot of shareholders who do not want to hold long term. They may have started out with the Sydenham Money Club. Then to Canterbury something and then swallowed into Heartland. They have seen the value of their holdings destroyed. I do not know at what point they will sell. Many of course cannot sell, their holding is too small.

Next problem. Its a bank. They need more capital to expand, and that capital can only come from shareholders. Stuffing cash into a bank as a deposit gives you say 4% return. A 3% return from Heartland requires more or less a 2 cent dividend for a 70 cent share. But the shares have an assett backing of 90 cents. So Heartland has to pay a 3 cent dividend from maybe only a 6 cent per share profit to keep shareholders happy at assett valuation of the shares.
But Heartland has to make another 'cash call.' They need more capital, but shareholders do not want to pay. A bit like Pike.

Next, what expertise does Heartland have in its specific lending area? It lends on Property. Commercial and Residential. The two require different experience.
They lend on machinery. Is it Farm machinery, or Civil Engineering equipment. What sort of market exists for the stuff?, what is it worth second hand?
I think they even lend on Cows.
They operate all over NZ. I suspect they cannot have all the expertise at every branch.

I would appreciate ideas on the above comments. I think Heartland cannot trade above 90 cents in the next two years, to December 2014.

[winner69]

Heartland Bank has maybe a lot of shareholders who do not want to hold long term. They may have started out with the Sydenham Money Club. Then to Canterbury something and then swallowed into Heartland. They have seen the value of their holdings destroyed. I do not know at what point they will sell. Many of course cannot sell, their holding is too small.

Next problem. Its a bank. They need more capital to expand, and that capital can only come from shareholders. Stuffing cash into a bank as a deposit gives you say 4% return. A 3% return from Heartland requires more or less a 2 cent dividend for a 70 cent share. But the shares have an assett backing of 90 cents. So Heartland has to pay a 3 cent dividend from maybe only a 6 cent per share profit to keep shareholders happy at assett valuation of the shares.
But Heartland has to make another 'cash call.' They need more capital, but shareholders do not want to pay. A bit like Pike.

Next, what expertise does Heartland have in its specific lending area? It lends on Property. Commercial and Residential. The two require different experience.
They lend on machinery. Is it Farm machinery, or Civil Engineering equipment. What sort of market exists for the stuff?, what is it worth second hand?
I think they even lend on Cows.
They operate all over NZ. I suspect they cannot have all the expertise at every branch.

I would appreciate ideas on the above comments. I think Heartland cannot trade above 90 cents in the next two years, to December 2014.

mouse - you overlook that they have an equity ratio of 16% which is the envy of other nz financial instos

you also shouldn't upset percy on the night before xmas

santa will bypass your house tonight ..... and give that lovely red ferrari (financed by marac of course) to to some other deserving punter

anyway merry xmas from me

[mouse]

mouse - you overlook that they have an equity ratio of 16% which is the envy of other nz financial instos

you also shouldn't upset percy on the night before xmas

santa will bypass your house tonight ..... and give that lovely red ferrari (financed by marac of course) to to some other deserving punter

anyway merry xmas from me

So why does Heartland only have a BBB rating. Or is it BBB-? The Equity Ratio is of course good, but expansion must reduce the Equity Ratio.
Hopefully I have not upset Percy too much, and Happy Christmas to both Percy and Winner.
I got an early new Toyota Corolla, financed by Toyota! So happy to miss the Ferrari, and its repayments. Paying for the Toyota is bad enough. If Heartland could hit $2.00 I could rid myself of Toyota debt!

[percy]

Heartland Bank has maybe a lot of shareholders who do not want to hold long term. They may have started out with the Sydenham Money Club. Then to Canterbury something and then swallowed into Heartland. They have seen the value of their holdings destroyed. I do not know at what point they will sell. Many of course cannot sell, their holding is too small.

Next problem. Its a bank. They need more capital to expand, and that capital can only come from shareholders. Stuffing cash into a bank as a deposit gives you say 4% return. A 3% return from Heartland requires more or less a 2 cent dividend for a 70 cent share. But the shares have an assett backing of 90 cents. So Heartland has to pay a 3 cent dividend from maybe only a 6 cent per share profit to keep shareholders happy at assett valuation of the shares.
But Heartland has to make another 'cash call.' They need more capital, but shareholders do not want to pay. A bit like Pike.

Next, what expertise does Heartland have in its specific lending area? It lends on Property. Commercial and Residential. The two require different experience.
They lend on machinery. Is it Farm machinery, or Civil Engineering equipment. What sort of market exists for the stuff?, what is it worth second hand?
I think they even lend on Cows.
They operate all over NZ. I suspect they cannot have all the expertise at every branch.

I would appreciate ideas on the above comments. I think Heartland cannot trade above 90 cents in the next two years, to December 2014.

Nice to have you back.Missed you.Have a nice Xmas.
Rural loans; Yes big on cows.Their representitive is at the sale yards,facilitating the loans.
HNZ.Read the presentation given at AGM and you will see who they lend to,mainly cars,machinery etc that was Marac.
I think they use telephones to get expert advice.Have lending limits and guidelines.
Property only residential home loans which they are not competing with major banks.Commercial etc no new loans.
Best way to keep upto date and understand the company is to buy a small parcel of shares,then as you get to know the company and people better you can buy more.I see they have paid the special divie,intend to pay an interim dividend in Feb/March then a final divie later in the year.
Until we find out what they are ,we can't work out yield.More capital will only be required if they do a big acquisition like buying F&P finance,in which case I think you would see the institutions keen to underwrite.
All your questions are answered in company annual report and presentations.
Any Sydenham Money Club shareholder should be proud that their second rate company has developed into HNZ which is now a registered bank,listed on NZX.
Pike never did one thing they said they would do.HNZ have done EVERTHING they set out to do.At present they are only achiving 4% on equity.This will increase to over 10% in a short period of time.Astute investors are buying in as they understand this will drive the shareprice.Weak shares moving to strong holders.

[janner]

No.I bank with Westpac.I have a home run business,dealing with over 200 schools and libraries.I have them on direct internet banking and changing would mean a mess.I have no need to borrow money,so will not be using their services.I do have a term deposit at Westpac that I should change to HNZ.I was a long term shareholder of PGC and never used Marac.At present, a trust I am a trustee for, hold ANZ bank shares.I have in the past owned Trust Bank shares and when taken over I held Westpac shares.I think Westpac are only average.I run cash management a/cs NZ and Australian with Craigs,who give me excellent service.

A good answer Percy.. PTC asked if you would transfer " all " of your accounts..

I have banked with a the ASB through all of their changes since 1959/60 .. Have used nearly all of the others during that time..

ASB is still my Main Bank.. During all of their changes they have looked after me..

My fervent hope is... ( I feel that it will happen ).

That HNZ will replace the ASB in the hearts of NZ'rs.. By giving better or at the very least.. Equivelent service ( Hard to do ) ..

Thus saving this country SQUILLIONS of DIVIDEND dollars going into Aussie pockets..

Making me and all of the many believers on this forum... RICHER !!.. :-))

[janner]

[. A bit like Pike.

Come on mouse.. Hnz is not " A bit like Pike. "..

Pike was pie in the sky.. Just like NZO is.. A promise of millions " IF "..

There is no " IF " in a Bank Managers responsibilities today !!..

" Next, what expertise does Heartland have in its specific lending area? ".

They have dealt and won, dealing with GK .. !!.. Coming out of the other end smelling of roses..

Mouse... This is not a time IMPO.. to be taking on Toyota Debt.. OK.. OK.. I am the original scrooge..

Better to keep your old dunger and invest in HNZ.. :-))

Go for the ROLLER..


A good question.. !!..


It lends on Property. Commercial and Residential. The two require different experience.
They lend on machinery. Is it Farm machinery, or Civil Engineering equipment. What sort of market exists for the stuff?, what is it worth second hand?
I think they even lend on Cows.
They operate all over NZ. I suspect they cannot have all the expertise at every branch.

I would appreciate ideas on the above comments. I think Heartland cannot trade above 90 cents in the next two years, to December 2014.[/QUOTE]

[mouse]

My Toyota Debt is interesting. It is a new car. Interest rate is 2.5%. Plus set-up costs. So I pay around $800 interest including set-up costs for a two year loan. Now the reason I am giving these details is that most new cars are sold with 'manufacturers finance.' Currently between zero and 5%. Which Heartland cannot, and should not, compete against.
The leaves Heartland only able to make vehicle loan on second-hand vehicles. Which are at a greater risk of having trouble. (My Toyota has a five year free servicing and five year warranty). Similar situations would probably apply to Industrial and Farming Machinery. The manufacturer providing finance. Again leaving Heartland with loans on second-hand machinery which may only have an economic life of ten years.
My point is, vehicles require specialist knowledge to make a profit from financing them. It was Marac that produced the outstanding profit results for Pyne Gould and Marac that produced the losses thatdrove them almost to bankruptcy. Borrowers must be both willing to pay and able to pay.
This is just one simple example of problems facing all financial institutions.
Heartland has a very wide lending scope. Do they have the expertise required for that scope?

I do not know. I would appreciate discussion on the situation.
Pike by the way is very similar to Heartland. Both are 'start-ups' and Heartland needs a continuing level of support from their shareholders. Should the shareholders not give the support then they will see their holding diluted.

[percy]

My Toyota Debt is interesting. It is a new car. Interest rate is 2.5%. Plus set-up costs. So I pay around $800 interest including set-up costs for a two year loan. Now the reason I am giving these details is that most new cars are sold with 'manufacturers finance.' Currently between zero and 5%. Which Heartland cannot, and should not, compete against.
The leaves Heartland only able to make vehicle loan on second-hand vehicles. Which are at a greater risk of having trouble. (My Toyota has a five year free servicing and five year warranty). Similar situations would probably apply to Industrial and Farming Machinery. The manufacturer providing finance. Again leaving Heartland with loans on second-hand machinery which may only have an economic life of ten years.
My point is, vehicles require specialist knowledge to make a profit from financing them. It was Marac that produced the outstanding profit results for Pyne Gould and Marac that produced the losses thatdrove them almost to bankruptcy. Borrowers must be both willing to pay and able to pay.
This is just one simple example of problems facing all financial institutions.
Heartland has a very wide lending scope. Do they have the expertise required for that scope?

I do not know. I would appreciate discussion on the situation.
Pike by the way is very similar to Heartland. Both are 'start-ups' and Heartland needs a continuing level of support from their shareholders. Should the shareholders not give the support then they will see their holding diluted.

Marac do supply "manufactures finance" Mazda and others.Years of successful motor vehicle finance.Reputable second hand dealers,no Honest John Motors.
Marac LOST money [as did most finance companies] on proprty development which they did not understand.They no longer lend to this sector.
The rest of Marac is excellent.Very strict guidlines on ALL lending.
HNZ is not a start up.Each party to the merger has been in business for a good number of years. HNZ is PROFITABLE after spending a fortune in legal fees on the mergers and huge fees getting the banking licence.Now has a banking licence [ie like a new Toyota] and has started paying a dividend.HNZ have been honest in what they sey out to do,and have achieved all they said they would.
Read the annual report and the presentations and you will find ALL the answers to your questions there. Nice pie graphs on lending,which regions,borrowings,everything.
Remember Pike could not even get the tunnel to the coal right.What, twice the cost and three times the time taken.?
Go to HNZ web page www,heartland.co.nz to get all the information you require.

[percy]

Mouse.
To try and understand your Toyota debt,think "interest free" TVs etc from Smiths City,or Noel Leemings.You may get low interest or no interest terms,but the retailer pays the interest.Toyota,Smiths City,Leemings don't get interest free money,your interest payments savings comes out of their mark up.It is a " marketing ploy".

[mouse]

Mouse.
To try and understand your Toyota debt,think "interest free" TVs etc from Smiths City,or Noel Leemings.You may get low interest or no interest terms,but the retailer pays the interest.Toyota,Smiths City,Leemings don't get interest free money,your interest payments savings comes out of their mark up.It is a " marketing ploy".
Not exactly with new cars. All car makers are stuck world wide with stuff they cannot move. Hence these very low interest rates, plus even a low price on the car. Which is considerably helped by a very strong NZ dollar. The point is, in this situation that Heartland ends up financing only second hand cars. Which have a much higher chance of turning into a lemon, and thus a bad debt. I am very happy with Marac expertise being transferred to Heartland. So they know about car finance. But they are lending at a higher risk.
My query, and I repeat it, is the wide range of finance that Heartland is providing. Do they have the expertise to do it?

Next, I managed to buy 15,000 Heartland at 50 cents. Which has now put me close to being in the black with costs for Heartland. But those not in my fortunate position must be very seriously wanting to sell shares that have cost a lot of investors a lot of cash. Hence my idea that the shares have a natural price ceiling for the next couple of years of 90 cents. Any ideas on that? What sort of price can we realistically forecast by December 2014?

[percy]

Not exactly with new cars. All car makers are stuck world wide with stuff they cannot move. Hence these very low interest rates, plus even a low price on the car. Which is considerably helped by a very strong NZ dollar. The point is, in this situation that Heartland ends up financing only second hand cars. Which have a much higher chance of turning into a lemon, and thus a bad debt. I am very happy with Marac expertise being transferred to Heartland. So they know about car finance. But they are lending at a higher risk.
My query, and I repeat it, is the wide range of finance that Heartland is providing. Do they have the expertise to do it?

Next, I managed to buy 15,000 Heartland at 50 cents. Which has now put me close to being in the black with costs for Heartland. But those not in my fortunate position must be very seriously wanting to sell shares that have cost a lot of investors a lot of cash. Hence my idea that the shares have a natural price ceiling for the next couple of years of 90 cents. Any ideas on that? What sort of price can we realistically forecast by December 2014?

No difference between TVs or cars.Dealers have to pay for the cheap finance deals.
Marac only supports good dealers.Have a successful record on car lending.Both new and used.Your Toyota will still be a good car in 15 years time.
From reading the annual report and presentations you will understand HNZ do have the expertise,to undertake what they are doing.It is not rocket science.Rural lending officers are all PGW based.Marac has car,and machinery expertise,CBS have home loans expertise.Only new areas they are moving into are health and education.The health area I take they will fund expensive operations to asset rich cash poor clients.
For those who have their HNZ shares from PGC distribution,they can look to the future with confidence,owning shares in NZ's only listed bank.We can not change history,only learn from it.Property developement ruined PGC.From the ashes we have HNZ,who do what they say they will do.
You were very astute to buy another 15,000 HNZ at 50cents.Must have seemed like madness at the time.Now enjoy the divies,and whatch your shares go from strength to strength.Those selling have access to the same information as you,but lack your foresight.
At 12.35 pm on 12th December 2014 the share price will be $1.57,however 2015 will see the share price at $2.38 and it will be over $3.00 by December 2016..Will need a new crystal ball to see beyond 2016.[should prices be different from mine,you will know 'the market'got it wrong.]

[janner]

Not exactly with new cars. All car makers are stuck world wide with stuff they cannot move. Hence these very low interest rates, plus even a low price on the car. Which is considerably helped by a very strong NZ dollar. The point is, in this situation that Heartland ends up financing only second hand cars. Which have a much higher chance of turning into a lemon, and thus a bad debt. I am very happy with Marac expertise being transferred to Heartland. So they know about car finance. But they are lending at a higher risk.
My query, and I repeat it, is the wide range of finance that Heartland is providing. Do they have the expertise to do it?

Next, I managed to buy 15,000 Heartland at 50 cents. Which has now put me close to being in the black with costs for Heartland. But those not in my fortunate position must be very seriously wanting to sell shares that have cost a lot of investors a lot of cash. Hence my idea that the shares have a natural price ceiling for the next couple of years of 90 cents. Any ideas on that? What sort of price can we realistically forecast by December 2014?

Crystal Balls are in shorter supply than normal at the moment mouse. Unable to even hazard a guess ..

Being a " realist ".. I can only take a companies past performance into account and try to see if it will continue or not on the same path.. Taking notice of the various winds and currents the company is up against or has in it's favour..

Also It's crew.. and most importantly . It's design.. I am happy with the design and the crew..

There is I think, a wind of change against the Aussie Banks.. The " man in the street " is waking up..

PLUS.. It is servicing the HEARTLAND PEOPLE..

The hard working back bone of this country.. Who do not run every weekend to the Sylvia Parks of this country waving their plastic ..

Disc... Holding and building..

[percy]

[QUOTE=janner;388839]Crystal Balls are in shorter supply than normal at the moment mouse.





Got mine from Briscoes 60% off.No instructions with it.

[janner]

[QUOTE=janner;388839]Crystal Balls are in shorter supply than normal at the moment mouse.





Got mine from Briscoes 60% off.No instructions with it.


With Guarantee ???.. Take a Taxi and buy me two... the cheque is in the post..

[mouse]

[QUOTE=janner;388839]Crystal Balls are in shorter supply than normal at the moment mouse.





Got mine from Briscoes 60% off.No instructions with it.

A Bargain. Hopefully Tammy was promoting them. Crystal Ball Gazing being almost a University Course, 101, now. Illuminated Crystal Balls being a Masters degree. I got all the crystal balls in stock at Briscoes. Now have to learn to drive them. Do they come with a Genie?
Seriously, the problem is that so many have been seriously burnt with Pyne Gould. I think they will bale out. I am more or less OK. But very pessimistic about the whole economy, particularly Oz, America and Europe. I think we will almost be OK.

[percy]

[QUOTE=percy;388841]


With Guarantee ???.. Take a Taxi and buy me two... the cheque is in the post..

Sorry Ken Ring brought the whole lot.Missed mine as it was a display model without the box or instructions.

[janner]

A Bargain. Hopefully Tammy was promoting them. Crystal Ball Gazing being almost a University Course, 101, now. Illuminated Crystal Balls being a Masters degree. I got all the crystal balls in stock at Briscoes. Now have to learn to drive them. Do they come with a Genie?
Seriously, the problem is that so many have been seriously burnt with Pyne Gould. I think they will bale out. I am more or less OK. But very pessimistic about the whole economy, particularly Oz, America and Europe. I think we will almost be OK.


No time to be pessimistic mouse.. I have percy already buying two ( 2 ) Crystal balls, one for me one for you.. ( cheque in the post )..

Of course there will be a 10% fee on all profits realised.. :-)..

" But very pessimistic about the whole economy, particularly Oz, America and Europe. I think we will almost be OK.

So you are saying NZ is going to better in your opinion ??.

IF so... OUR BANK will also do better.. CAPICHE ??..

No mouse.. Cash up... Put your money into the safest currency in the world and receive..... .. ..
hmmm..hmm..hmmmmmmm.. 1 ( one ) percent interest if you are lucky.. as it devalues..

My money is on the NZ HEARTLAND..

[percy]

[QUOTE=percy;388841]

A Bargain. Hopefully Tammy was promoting them. Crystal Ball Gazing being almost a University Course, 101, now. Illuminated Crystal Balls being a Masters degree. I got all the crystal balls in stock at Briscoes. Now have to learn to drive them. Do they come with a Genie?
Seriously, the problem is that so many have been seriously burnt with Pyne Gould. I think they will bale out. I am more or less OK. But very pessimistic about the whole economy, particularly Oz, America and Europe. I think we will almost be OK.

Everyday people are selling shares as they either want the money or think they are over priced,while others have money to invest and think the shares they are buying will produce good divies and share price growth.
Every one who owned PGC shares got seriously burnt.If they think HNZ is the same as PGC they are wrong.
Do not be too pessimistic.Govts in America and Europe have huge debt,but remember the listed companies have very strong balance sheets,and the people in Europe carry very little debt,while the American public have been reducing personal debt.Oz govt has very little debt.In Christchurch look at all the new utes and four wheel drive vehicles the tradesmen are driving. All the cranes,huge new poo trucks,etc.[all on time payment or leased.Think HNZ]

[mouse]

Janner, I live in Christchurch. The level of damage here is fairly large. As far as I can guess, there are 50,000 homes needing replacement or repair. So whilst the world stews we could be OK. Providing the insurance companies dont go bust.
Ansvar has. But Ansvar NZ, not the Ecclesiastical Insurers of London. The London lot have just walked away.
Now, that is important. A major company has said, not my problem. Stew. And walked.
Which brings us to Heartland. A Kiwi Company. People with cash in overseas owned banks need to look at Ansvar, and consider if their own bank could just walk away. 'Sorry Chaps, your cash has vanished. Bye.' People should put their cash into NZ owned banks. Not Heartland if you own shares in it. Spread your risks.
Percy, the problem is people got burnt with PGC and the other companies combining to form Heartland. One of my mates had 'shares' in Southern Cross. They refused to let him cash the shares in. Southern Cross got expelled from the Association of Building Societies, or whatever it was called. The problem is those people are all wanting to dump their shares. Which will depress Heartland shares.
My conclusion. Heartland shares are a 'hold.' They were a buy at 50 cents. Thankfully I had the cash to buy some at that price. We can look to reasonable dividends in the immediate future. As you say Percy, the amount of new gear in Christchurch is amazing. I am sure Heartland is active in the market.
Next, in a financial crisis, the last thing to hold is cash. It can vanish as in Weimar Republic or, after the war, West Germany cancelled all their cash and gave everyone fifty dollars or whatever. Bank notes, bank deposits, the lot, were cancelled. If you owned buildings that were still standing, or other assetts, you escaped the haircut.

[percy]

Mouse;company fortunes change,good people come on board,and people change their opinons.Ryman did nothing for a couple of years and people sold out.Share price is now about 15 times what they sold for.Mainfreight came on the market and were going to take on the world,only to fall over in Aussie.People who sold ,have seen that share go up 10 times.Ebbos looked as though they would lose a hospital contract.People who sold have seen that share go up over 10 times.Skellerup went through a number of owners who along with shareholders lost their capital.Now a very strong company with little or no debt.
HNZ has set the foundations for a prosperous future.Sellers will miss out!!

[mouse]

Mouse;company fortunes change,good people come on board,and people change their opinons.Ryman did nothing for a couple of years and people sold out.Share price is now about 15 times what they sold for.Mainfreight came on the market and were going to take on the world,only to fall over in Aussie.People who sold ,have seen that share go up 10 times.Ebbos looked as though they would lose a hospital contract.People who sold have seen that share go up over 10 times.Skellerup went through a number of owners who along with shareholders lost their capital.Now a very strong company with little or no debt.
HNZ has set the foundations for a prosperous future.Sellers will miss out!!

Quite. My crystal ball says 90 cents, December 2014. The Genie supplied with it agreed.
Percy, crystal ball without Genie, suggested 12 Dec 2014 at 12.43? $1.57.
My ball would not go any further, even with prodding.
Percy got 2015 $2.38 and Dec 2016 over $3.00.
What I think we all agree with, its a hold. Those who want quick profits, well you made them between 50 cents and 70 cents. Pretty spectacular actually. So wait to December 2014. I will be delighted to be proven to have a crystal ball price that is far too low.

One problem is that cheap, on sale, Crystal Balls, even with a Genie, are a bit unreliable. Plus can break down. Getting them serviced is a problem.

[percy]

Quite. My crystal ball says 90 cents, December 2014. The Genie supplied with it agreed.
Percy, crystal ball without Genie, suggested 12 Dec 2014 at 12.43? $1.57.
My ball would not go any further, even with prodding.
Percy got 2015 $2.38 and Dec 2016 over $3.00.
What I think we all agree with, its a hold. Those who want quick profits, well you made them between 50 cents and 70 cents. Pretty spectacular actually. So wait to December 2014. I will be delighted to be proven to have a crystal ball price that is far too low.

One problem is that cheap, on sale, Crystal Balls, even with a Genie, are a bit unreliable. Plus can break down. Getting them serviced is a problem.

90 cents!!!! I would be more than happy with that.Buying today at 68cents return would be 32% PLUS divies.At 69cents it would be 30% plus divies.At 70 cents it would be 28.5% plus divies.
Hold.No way,it is a RAGEING BUY.

[mouse]

90 cents!!!! I would be more than happy with that.Buying today at 68cents return would be 32% PLUS divies.At 69cents it would be 30% plus divies.At 70 cents it would be 28.5% plus divies.
Hold.No way,it is a RAGEING BUY.

Brilliant, Percy. Unfortunately I cannot buy. Already I hold too many. But I cannot fault your logic.

[janner]

[QUOTE=janner;387893

Think it maybe a while before any decent upward movent is seen .. Every one has already positioned themselves..[/QUOTE]

From my post 822.

mouse. Your comment that you have enough at present goes to back up my post.
Others are talking about resistance @ .70c
It is not resistance .. It is prudence or empty pockets, to spend any more on HNZ than they already have ...

Looking forward to the Feb figures..



You can have to much of a good thing they say..

[mouse]

Dividends. It seems to me that the minimum dividend is 1 cent interim, 1.5 cents final. They have to pay 3 cents annually to get real support for the shares. A 4 cent dividend seems impossible to me. Any ideas?
Happy New Year.

[percy]

Dividends. It seems to me that the minimum dividend is 1 cent interim, 1.5 cents final. They have to pay 3 cents annually to get real support for the shares. A 4 cent dividend seems impossible to me. Any ideas?
Happy New Year.

I think it would pay to wait until Feb when the interim result is announced,then we will have a better idea of how they are trading,and will know if, and how much they are paying in the way of interim dividend.Only a few weeks away.
It was not long ago that posters on this thread we saying we would not see a dividend, or a banking licence for sometime.!!!

[mouse]

I think it would pay to wait until Feb when the interim result is announced,then we will have a better idea of how they are trading,and will know if, and how much they are paying in the way of interim dividend.Only a few weeks away.
It was not long ago that posters on this thread we saying we would not see a dividend, or a banking licence for sometime.!!!

Heartland has to pay at least a 1 cent interim dividend to hold the price of its shares, and maybe to nudge the price up a little. Less than one cent is not acceptable.

[kizame]

There seems to be an orderly distribution and accumulation of shares at the .69c level,very healthy I think,been going on for a while now.

[percy]

Concur Kizame - looks to me that those playing the short-term game while HNZ was 'created' are now exiting while those looking at longer term horizons are steadily accumulating (wonder if the cullen fund or ACC are?)

Today's lack of interest (down 1c to 68c) is probably about the shocking weather in the South Island.

The sun is shining again here in ChCh so I expect SP to move up to 69cents,however could drop down again if it clouds over again.
Have not seen any institutions buying [yet].Thought we may have seen them once bank licence was granted.

[kizame]

I sort of think that maybe the instos will let the market cool down a bit in the new year,just to see where prices head in the short term,after such a good year.

[mouse]

A friend phoned today. Kiwi bank has, or will on Monday, close his account. He was, very foolishly as it happened, demanding that Kiwi Bank did what its adverts said it did. A new bank is needed. I suggested Heartland. Sydenham.
Alas, the branch is no longer there. A victim of Progress. Gone. So I looked on the Heartland website. To find the branches. In the South Island.......
Which consist of, Rangiora, Ashburton and Riccarton. Our total number of South Island Branches.
My mate appreciated the information, and is still without a bank. He did say that the TAB is a good option, with branches everywhere.

[percy]

A friend phoned today. Kiwi bank has, or will on Monday, close his account. He was, very foolishly as it happened, demanding that Kiwi Bank did what its adverts said it did. A new bank is needed. I suggested Heartland. Sydenham.
Alas, the branch is no longer there. A victim of Progress. Gone. So I looked on the Heartland website. To find the branches. In the South Island.......
Which consist of, Rangiora, Ashburton and Riccarton. Our total number of South Island Branches.
My mate appreciated the information, and is still without a bank. He did say that the TAB is a good option, with branches everywhere.

Get your friend to go to Barrington Mall;Westpac,ASB,BNZ,Kiwi Bank and TAB.The butcher shop sells great Porter house steak too.

[mouse]

Percy, Kiwi Bank is closing his account.
TAB is a good bet, but weak on overdrafts maybe.
Westpac, ASB, BNZ are all overseas owned. In Christchurch, as you know, we have just seen Ansvar the insurance company go broke in NZ. It is still solvent overseas, but is not fully paying their claims in NZ. Plus have closed down now in NZ. So he would prefer a New Zealand owned bank. But not go to Rangiora to deposit cash!

I used to buy meat at Cross Bros, then the young chap, James, took it to Spotlight. His wife then told him to move from Christchurch due to quakes. She wasnt staying. So he went. Pack and Save is now it.

[percy]

Percy, Kiwi Bank is closing his account.
TAB is a good bet, but weak on overdrafts maybe.
Westpac, ASB, BNZ are all overseas owned. In Christchurch, as you know, we have just seen Ansvar the insurance company go broke in NZ. It is still solvent overseas, but is not fully paying their claims in NZ. Plus have closed down now in NZ. So he would prefer a New Zealand owned bank. But not go to Rangiora to deposit cash!

I used to buy meat at Cross Bros, then the young chap, James, took it to Spotlight. His wife then told him to move from Christchurch due to quakes. She wasnt staying. So he went. Pack and Save is now it.

If he has a "Gold Card" he will enjoy the journey to HNZ Riccarton.Once a/c is open he can use phone banking/or internet.Cash ????
Try the Barrington butcher for steaks.Even Bill Cross would be proud of them.

[mouse]

If he has a "Gold Card" he will enjoy the journey to HNZ Riccarton.Once a/c is open he can use phone banking/or internet.Cash ????
Try the Barrington butcher for steaks.Even Bill Cross would be proud of them.

No, No, Percy. He is a very strange, and dying breed. He actually works for a living. No Gold Card, but he would like a few South Island Branches with a couple in Christchurch. It seems amazing that such a bank, except Kiwi Bank and SBS, does not exist. Kiwi Bank is cancelling his account!

[winner69]

The Cooperative BANK has branches at Papanui and Riccarton as well as at Burnham Camp (jeez more branches than that thing that has a equity ratio to be proud off)

And mouse no overseas shareholders ..... actually no greedy shareholders at all ... so would be working in the interest of your friend and other depositors .... just like banks were meant to be

I have some money with them

[percy]

Wish him well at the Coop.

Maybe there will be enough demand for a Coop sort of web site, where Coop members could have their say,like those of us who follow shares do on sharetrader.

[GTM 3442]

If New Zealand owned is important, then TSB Bank should fit the bill.

Based in Taranaki, so I'm unsure about branch coverage in other area, but I have used their online services for a long time with no problems - best service I've come across.

[janner]

The sun is shining again here in ChCh so I expect SP to move up to 69cents,however could drop down again if it clouds over again.
Have not seen any institutions buying [yet].Thought we may have seen them once bank licence was granted.

percy.. The insto have already taken their position.. With outside holders.. Ready to pounce... IMHO..

Disc.. Holding ..

[percy]

percy.. The insto have already taken their position.. With outside holders.. Ready to pounce... IMHO..

Disc.. Holding ..

On list of shareholders I have dated 10/12/12 NZ Central Securities Depository Ltd., held 16.8433% of the HNZ shares.I have no way of working out which instos make up that holding.
In shareholder notice 3/12/12 ACC reduced their holding from 7.460% to 6.443% having sold 395,825 shares at average .6925 cents per share.I also note Bryan Mogridge sold 75,000 shares.May be increasing his Rakon holding.???? Bernard Wimp [lo baller] still holds 2mil shares,while Hugh Green Investments hold 1,589,780 shares.

[mouse]

The Cooperative BANK has branches at Papanui and Riccarton as well as at Burnham Camp (jeez more branches than that thing that has a equity ratio to be proud off)

And mouse no overseas shareholders ..... actually no greedy shareholders at all ... so would be working in the interest of your friend and other depositors .... just like banks were meant to be

I have some money with them

He did think of them, will probably do so actually. But it does underline the hill that Heartland has to climb. Of course, they are using PGGWrightson as a sort of branch. But for lending. Depositors probably would like a bank with at least a facade on the building!

TSB could do, they have a Sydenham branch.

[percy]

[QUOTE=mouse;389262] But it does underline the hill that Heartland has to climb. Of course, they are using PGGWrightson as a sort of branch. But for lending. Depositors probably would like a bank with at least a facade on the building!

Not so.Heartland have no trouble attracting depositors.

[winner69]

Percy .... HNZ spokesman

You mentioned a targeted ROE that hnz was going for in one of your reports. What was it and was their any rationale in coming up with such number

[percy]

Out of interest I looked at Westpac on yahoo finance.Their return on equity is 16.82%.Should HNZ achieve this HNZ's profit would be over $60mil.
WBC equity was a low 6.176% 381,890,000/618,277,000.
ANZ bank.ROE 14.88% equity 6.247% 33,220,000/531,739,000
CBA bank.ROE 18.81% equity 5.5% 35,570,000/646,330,000

At the AGM some one asked Jeff Greenslade why HNZ were only achieving 4% ROE.He replied that he intended to get the ROE into double didgets.
[Can't remember if he gave a time frame,but don't think it will take too long].
I think SCOTTY posted UDC result,which I think HNZ should be able to match in the not too distant future,ie and I still think the ROE achieved by ANZ and CBA should be HNZ's goal.

[percy]

The Banking Licence is a big milestone and excellant news for Christmas.

There was an interesting item on Sharechat dated 13th Dec. - "ANZ Bank's UDC Finance unit lifts FY profit by 31% on lending growth."

What I found particularly interesting was that the profit of $37.9 million was achieved on a lending book of over $2 billion. I assume that this is just over the $2b as the article said "UDC's lending book rose 3.5% to over $2 billion"
This is pretty similar to HEARTLAND BANK which has Net Finance Receivables of $2.078 billion.

Surely "THE BANK" should soon be producing a similar result which would make for juicy earnings of 9.75cps ($37.9m divided by the 388,703,975 shares on issue). Currently, HEARTLAND BANK has total assets of $2.65 billion, which would suggest that it has the capacity to substancially improve on this result.

These are my thoughts and I could be quite wrong (but I hope not). :D

Spot on SCOTTY.
For you winner69

[mouse]

At the AGM some one asked Jeff Greenslade why HNZ were only achieving 4% ROE.He replied that he intended to get the ROE into double didgets.
[Can't remember if he gave a time frame,but don't think it will take too long].
I think SCOTTY posted UDC result,which I think HNZ should be able to match in the not too distant future,ie and I still think the ROE achieved by ANZ and CBA should be HNZ's goal.

What many of us are hoping for is a return of equity! Suggestions please on how long it might take.

[percy]

What many of us are hoping for is a return of equity! Suggestions please on how long it might take.

Beauty of the share market is that you can sell any time you want.If you have paid less than current SP you make a profit, as well as getting your equity back.Should the SP be less than you paid you take a loss and get back what ever equity is left.Each day people are buying and selling,some making a profit,while others make a loss.Should you keep making profits you are making the right decisions.Should you keep making losses I think the sharemarket is not for you.

[mouse]

It is happening now,so enjoy it.!!!!

I am not too badly hit from all this. But NZ, Kiwis, have had to put up with leaking buildings, the collapse of Finance houses, earthquakes, decline of wages. Bankrupt insurance companies. I am pretty surprised there is any cash left in our islands.
Return OF equity is still pretty important.

[percy]

I am not too badly hit from all this. But NZ, Kiwis, have had to put up with leaking buildings, the collapse of Finance houses, earthquakes, decline of wages. Bankrupt insurance companies. I am pretty surprised there is any cash left in our islands.
Return OF equity is still pretty important.

Most companies on NZX have very strong balance sheets and are paying good dividends.I believe the banks are full of money.Steel and Tube placement of approx $90mil was sold down by one broker within 20 minutes.Pent up cash waiting for SOE floats.Kiwi Saver is increasing quickly and looking for investments.Travel overseas,or read articles on overseas and you will realise how lucky to be living in NZ which has rule of law,stable government,and a strong ecomony.Trev "you don't know how lucky you are."

[winner69]

A target ROE of say 14% implies a relatively high degree of leverage ....more than at present ...and sort of says more 'risk' has to be taken on

hnz remuneration policy seems a bit vague ......do you know much about that Percy

Question then - is improved roe part of execs incentive?

[percy]

A target ROE of say 14% implies a relatively high degree of leverage ....more than at present ...and sort of says more 'risk' has to be taken on

hnz remuneration policy seems a bit vague ......do you know much about that Percy

Question then - is improved roe part of execs incentive?

The 14% may be too high a target,but in time we should see the $160mil to $180mil of non core property assets sold,and think they should get good returns from car,truck,machinery,livestock financing etc .If they develope what they are good at, and what they know, risk should not be unreasonable. They are not looking to be everything to everybody,and I expect [or hope] the branch roll out will be slow,therefore overheads charges should be modest.
HNZ remuneration policy,I have not read,so can't comment.[I have never been able to understand one incentive plan. I have always felt they are a transfer of wealth from shareholders to management ,and I have a record of always voting against them]

[kizame]

The 14% may be too high a target,but in time we should see the $160mil to $180mil of non core property assets sold,and think they should get good returns from car,truck,machinery,livestock financing etc .If they develope what they are good at, and what they know, risk should not be unreasonable. They are not looking to be everything to everybody,and I expect [or hope] the branch roll out will be slow,therefore overheads charges should be modest.
HNZ remuneration policy,I have not read,so can't comment.[I have never been able to understand one incentive plan. I have always felt they are a transfer of wealth from shareholders to management ,and I have a record of always voting against them]

Good on you Percy I totally agree,let companies buy those shares on market,and finance employees into them.I think that is a fairer way to do the incentive thing. All these "options issues" are all very well,but that does take equity from investers.

[winner69]

You have convinced me that 14% roe is a reasonable target

If achieved why the heck would you want them to pay divie ......hard for you make that much after tax. ...so let them do it for you

After 5 years equity would be 722 million ..... Keeping that equity ratio everybody is envious of they would have over 7 billion lent out

Good eh ...share price would reflect that ....so don't ask for divies .....please

[percy]

You have convinced me that 14% roe is a reasonable target

If achieved why the heck would you want them to pay divie ......hard for you make that much after tax. ...so let them do it for you

After 5 years equity would be 722 million ..... Keeping that equity ratio everybody is envious of they would have over 7 billion lent out

Good eh ...share price would reflect that ....so don't ask for divies .....please

Makes you realise how quickly and profitabily financial intos can and do grow. Any time the "big" banks have been in trouble and come to shareholders for funds they recover very quickly.I am thinking of Westpac in the early 1990s when it looked at one stage Kerry Packer was going to take them over.!!! I think all the "big" Aussie banks have problem [Aussie] residential loans,which off course HNZ don't have.[Although they have their non core property problem].
History confirms you are better off owning a bank,rather than having money in the bank.

[winner69]

Remuneration policy .... esp around exec incentive and relevant KPIs .... seem to be out of the public domain (confess i didn't look too hard) .... except the committe sees that is tied to enhancing shareholder value .... yippee

Have written to them asking if there are documents outlining such things that investors might be able to see to from an idea of how they are going to enhance shareholder value ..... in other words percy how they are going to transfer wealth from shareholders to themselves

[Snoopy]

Just been looking at the latest (FY2011) ANZ annual report Percy.

The balance sheet on page 88 shows net assets of $37.954m. Net loans and advances are listed on the same page $396.337m. So I get an equity to loan ratio of:

$37.954m/$396.337m= 9.58%

ROE based on end of year equity was

$5.873m/$37.954= 15.5%

Of course the true ROE figure uses the average equity over the year


Just been looking at the latest (FY2012) ANZ annual report. With Heartland now a bank, it is always good to look over your shoulder and see what the competition are doing.

The balance sheet on page 74 shows net assets of $41.220m. Net loans and advances are listed on the same page $427.823m. So I get an equity to loan ratio of:

$41.220m/$427.823m= 9.63%

ROE based on end of year equity was

$5.661m/$41.220m= 13.7%

Of course the true ROE figure uses the average equity over the year. But for ease and consistency of calculation, this is the way I like to do things.

Return on equity seems to be slowing as a result of tougher conditions in the whole banking sector. So maybe that cash issue to shore up the Heartland balance sheet is a bit closer?

SNOOPY

[Snoopy]

Originally Posted by percy
"Start worrying about Aussie banks sauces of funds.They appear to have a problem."

Taking ANZ as an example Percy, I don't believe the picture is as bad as you paint it. Take a look at the latest 30th September 2011 Balance Sheet. There is an item on there called 'bonds and notes' that is unrelated to any shareholders equity that ANZ may have built up. It accounts for $56.551m which when added to the $37.954m of shareholders equity must make ANZs 'total loan capital' to 'loans outstanding' rather superior to Heartland's position.


An update on the position in Australia that Percy in particular is very concerned about: Bonds and Notes (see Note 27) have increased to $63,098m. Add that to shareholders equity of $41,220m and total available capital to ANZ is now $104,318m. That is a 10% increase on the $95,404m available at the end of the previous financial year. The Aussie crisis is receding!

If you regard the bonds and notes as 'quasi-capital', then ROE for ANZ drops to:

$5.661m/ $104.318m = 5.4%

Realistically, IMO, this is the kind of return you should be looking at as the long term potential of Heartland Bank.

Heartland bank had equity of $343.7m at last balance date. So assuming all of that equity can be worked we are looking at a long term profit potential of:

0.054 x $343.7m = $18.6m

So Heartland are overperforming the benchmark by quite a long way in FY2012, with a $23.6m profit. Of course with a bit more shareholder capital, perhaps $23.6m is sustainable long term?

SNOOPY

[percy]

Just been looking at the latest (FY2012) ANZ annual report. With Heartland now a bank, it is always good to look over your shoulder and see what the competition are doing.

The balance sheet on page 74 shows net assets of $41.220m. Net loans and advances are listed on the same page $427.823m. So I get an equity to loan ratio of:

$41.220m/$427.823m= 9.63%

ROE based on end of year equity was

$5.661m/$41.220= 13.7%

Of course the true ROE figure uses the average equity over the year. But for ease and consistency of calculation, this is the way I like to do things.

Return on equity seems to be slowing as a result of tougher conditions in the whole banking sector. So maybe that cash issue to shore up the Heartland balance sheet is a bit closer?

SNOOPY

I would be happy if/when HNZ achieved ANZ's 13.7% ROE,while I expect you would be a happy if/when ANZ achieved HNZ 16% equity ratio.

[Snoopy]

The best interest rate link from the sharechat website puts me through to: http://www.depositrates.co.nz/

Heartland has a call rate of 3.75%, a 90 day rate of 4.5% and a 12 month rate of 5%. These are of course leading rates that apply to new term deposits and those that are rolling over. Customers can get higher call rates at BNZ and ANZ/National. Heartland are higher than the best of the big banks (Westpac by 0.5%) on a 3 month term. Heartland are 0.5% higher than the best of the big banks (BNZ) on a 12 month term.


Come a banking licence and how the Heartland rates have changed from September 2012: Call rate 4.0% (+0.25%), 90 days 4.2% (-0.3%) and 12 months 4.55% (-0.45%). The best of the big four banks (actually all of them) now offers 3.25% for 90 days.

So the Heartland risk margin over 90 days is now:

4.2% - 3.25%= 0.95%

On a one year basis Westpac and BNZ offer the best depositor rates at 4.2%

So the Heartland risk margin over 12 months is now:

4.55%-4.2% = 0.35%

The 12 month margin is trimmed there from 0.5% 'pre-bank'.

That means Heartland are competing more vigorously for depositors funds at the shorter end. Trying to grab market share? Good for growth. Maybe not so good for profit margins?

SNOOPY

[winner69]

Snoopy .... for most periods >12 months Heartland term deposit rates are currently very attractive .... .3% to 0.5% more than Rabo or Cooperative BANK

Some Cooperative money due to be reinvested soon .... might have to go to Heartland ..... but would hate to as the reason for coopaerative is around the social conscience side of me ..... hate seeing greedy shareholders making dosh on my dosh

Conclusion - Heartland trying to attract deposits with very attractive rates? Good eh or is it bad? Or did they really work out that Cooperative BANK was doing better than they were at attracting money?

[percy]

Snoopy .... for most periods >12 months Heartland term deposit rates are currently very attractive .... .3% to 0.5% more than Rabo or Cooperative BANK

Some Cooperative money due to be reinvested soon .... might have to go to Heartland ..... but would hate to as the reason for coopaerative is around the social conscience side of me ..... hate seeing greedy shareholders making dosh on my dosh

Conclusion - Heartland trying to attract deposits with very attractive rates? Good eh or is it bad? Or did they really work out that Cooperative BANK was doing better than they were at attracting money?

Just remember you are better owning a bank,than having money in the bank.

[garfy]

I do like winner69's sentiments, but is he is talking to the wrong forum? ..... this is about money and making it work.

I'm on Percy's side, probably less for myself than for my grandchildren

[winner69]

I do like winner69's sentiments, but is he is talking to the wrong forum? ..... this is about money and making it work.

I'm on Percy's side, probably less for myself than for my grandchildren

Mr garfy - some of us don't have all our money 'working' in the share market all the time ..... and the comments are relevant to this forum and thread in that they supported snoopy's little analysis in that heartland probably/may be buying business and it may be hurting their margins short term ..... or even worse that Cooperative Bank might be doing better than them

Agree percy better you own the bank than having money in it (over the long term) but just like you percy some of our money is 'in' the bank isn't it

Some could say that other BANK gives you the best of both worlds - having money 'in' it as well as owning it (though I have yet to work out what you get from 'owning' it yet)

Jeez - twice in a few weeks I have been told off . castigated by fellow posters for putting things in the wrong forum .... either the world is going stupid or there has been too many full moons. About time for some more raves about Occupy and what we should be doing to cut greedy bankers and shareholders down to size

[percy]

Good bit of advice from 12 to 14 year olds St.Agnes School,via Peter Lynch in Brian Gaynor article in this morning's Herald.
"Investors should look at small companies,because as a group they tend to out perform the larger ones over the longer term."
We should remember their advice when comparing Heartland with ANZ and Westpac.
ps.Brian Gaynor article well worth the read.

[percy]

Mr garfy - some of us don't have all our money 'working' in the share market all the time ..... and the comments are relevant to this forum and thread in that they supported snoopy's little analysis in that heartland probably/may be buying business and it may be hurting their margins short term ..... or even worse that Cooperative Bank might be doing better than them

Agree percy better you own the bank than having money in it (over the long term) but just like you percy some of our money is 'in' the bank isn't it

Some could say that other BANK gives you the best of both worlds - having money 'in' it as well as owning it (though I have yet to work out what you get from 'owning' it yet)

Jeez - twice in a few weeks I have been told off . castigated by fellow posters for putting things in the wrong forum .... either the world is going stupid or there has been too many full moons. About time for some more raves about Occupy and what we should be doing to cut greedy bankers and shareholders down to size

Next full moon you should go to the Vatican and tell the Pope there is no God.!!!!!! lol.
Wouldn't mention your Co_Op idea for the Vatican Bank .They got into enough trouble on their own!!!!
No greedy sharehoders here,only nice people wanting to improve their knowledge about listed company shares,so as they may become more successful at investing.

[Arbitrage]

I would be interested to hear anyones comments as to the flat share price for Heartland. It has hovered between 68-70 cents for around 3 months now.

[percy]

I would be interested to hear anyones comments as to the flat share price for Heartland. It has hovered between 68-70 cents for around 3 months now.


I suppose it is taking time for the shareholding to settle down.G Kerr sell down,other short term holders,and others waiting for the banking licence.All that is behind us now,so we have to wait until [mid]February for the interim result.
After all said and done [usually more said than done] it will be the earnings and expectations of future earnings that will drive the share price.

[mouse]

I would be interested to hear anyones comments as to the flat share price for Heartland. It has hovered between 68-70 cents for around 3 months now.

The problem seems to me to be that banks around the world are in some trouble. This is from the Telegraph,
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9804354/Lloyds-and-RBS-need-billions-more-capital-BoE-says.html
The comments on the news are also interesting. I am pretty happy with Heartland at the present price. But things could go sour. Having shares is always more risky than having gold bars.

[mouse]

You sure about that?
And if the world truly goes to hell in a handbasket, then gold will not be as useful as a garden or a gun.
Spot on. Can you pop down and do my garden for me? It needs a bit of weeding.

[janner]

Arb, I guess the near continuous ramping by the HNZ enthusiasts on ST isn't having any effect :)

True.... Does it need ramping ??

[winner69]

True.... Does it need ramping ??

If 'ramping' is defined as 'talking up the price of particular shares' then HNZ definitely needs ramping .... as share price not going up ..... or as belg says if the followers have been 'ramping' they have failed .... or the market has not responded

[percy]

If 'ramping' is defined as 'talking up the price of particular shares' then HNZ definitely needs ramping .... as share price not going up ..... or as belg says if the followers have been 'ramping' they have failed .... or the market has not responded

Thanks winner69.The SP looks poised.!!!
Surprised the market did not react to Belgarion picking HNZ in sharetrader competition on 12/1/2013.
I expect most of us on sharetrader are awaiting his notification that he is building another one of his famous pyramids.
Then all of us loyal disciples will join in, singing "Onwards and Upwards," composed by none other than our own winner69.

[mouse]

Ramping urgently needed. Percy, we are relying on you! All the mice are in disbelief.

[janner]

Ramping urgently needed. Percy, we are relying on you! All the mice are in disbelief.

Come on mouse.. Harden Up.. Don't be a Whimp..

You have Bernard just down the road from you offering tempting pieces of cheese any time you wish to take the bait..

[percy]

Ramping urgently needed. Percy, we are relying on you! All the mice are in disbelief.

This may be the last boarding call before the train leaves the station.Just clearing the rats and MOUSEs, and other nervous nellies out of the carriages,so the smart money can enjoy the journey.The advertising blitz [as promised by the Chairman at the AGM] should be starting shortly.
Poised, for renewed trajectory.Fasten your seatbelts.!!!!

[robbo24]

freeeeedooomm!!!!!

[K1W1G0LD]

This may be the last boarding call before the train leaves the station.Just clearing the rats and MOUSEs, and other nervous nellies out of the carriages,so the smart money can enjoy the journey.The advertising blitz [as promised by the Chairman at the AGM] should be starting shortly.
Poised, for renewed trajectory.Fasten your seatbelts.!!!!

Well you certainly know how to Gee the troups up Percy.But this is a hard one!
HNZ has everything going for it , but here it is sitting in the shareprice doldrums.I guess this is going to take longer than we all thought.

[percy]

Well you certainly know how to Gee the troups up Percy.But this is a hard one!
HNZ has everything going for it , but here it is sitting in the shareprice doldrums.I guess this is going to take longer than we all thought.


Not so.!!! As Heartland BANK were waiting for their banking licence,which was delayed,they put off their advertising blitz.Once this advertising blitz gets underway,every one will want to be on board.In the meantime, to keep the faith visit www.heartland.co.nz

[winner69]

Percy ... unless retailers have a decent estatline operated online shop they are dead eh

This is what is happening with banking
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10860090

Maybe HNZ future is being niche ..... getting back to heartland roots and doing it the old fashioned way ... talking to people in branches ......stuff this wizardry internet stuff

[percy]

Percy ... unless retailers have a decent estatline operated online shop they are dead eh

This is what is happening with banking
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10860090

Maybe HNZ future is being niche ..... getting back to heartland roots and doing it the old fashioned way ... talking to people in branches ......stuff this wizardry internet stuff

What ever business you are in you need to be close to your customers,ie on line,on phone or if you want to be "really" close you follow Heartland's example and go to your customer.Heartland's man/men are at the saleyards where farmers are buying stock.Heartland is there,on the spot.! That is "really close". Old fashioned way,using latest technology.Yes HNZ are concentrating on niches.

[CJ]

Yip - just wait for marketing push. Still selling below NTA it is a bargain at present.

I just hope they have the technology all set up as there are lots of people that would like to move away from the Ozzie banks.

[percy]

Post deleted as put on the incorrect thread!

Pity.
I was just thinking how nice it was to have you join us on this thread.!!!!

[POSSUM THE CAT]

Is this train traveling on the Gisborne to Napier line or Vice versa

[mouse]

A great lot of comments. I shall retire to the mouse hole for a bit. But still counting on Percy to do the ramping. Plus, dont trust Possum the Cat. Even on the gravy train.

[SCOTTY]

Trades have been pretty steady - 565K yesterday and 1m on one day earlier in the month and most other days 100/200K but there has been a solid wall at the 69/70c mark which has been hard to move. I see that the closing sellers yesterday are: 43K @ 68c, 492K @ 69c and 753K (down from 1.3m) @ 70c so the wall is coming down :).

[blobbles]

I am a large holder of HNZ as I see their SP to be a bargain also (even more so when I bought most of mine at 54c!). Below NTA for a bank in one of the worlds most profitable banking markets, with good management and who is already making a growing profit which puts their SP at around $1* right now... you're mad if you don't buy them even at 70c I reckon. I think this year, if their marketing campaign is successful, they will prob top 40 million, giving them a SP in the $1.70 range but more importantly a solid divie! If they continue to perform, we could be looking at really good divies the next few years at least.

*Based on 6% return, 24 (million profit)/388 (million shares)

[mouse]

*Based on 6% return, 24 (million profit)/388 (million shares)

Which gives 6 cents per share, with a 50% dividend policy, which they could adopt, provides a 3 cent dividend. The dividend level is what will raise the share price. Plus the SP has to rise to enable HNZ to make a cash call. A Cash Call has to come to finance any expansion.

[winner69]

Which gives 6 cents per share, with a 50% dividend policy, which they could adopt, provides a 3 cent dividend. The dividend level is what will raise the share price. Plus the SP has to rise to enable HNZ to make a cash call. A Cash Call has to come to finance any expansion.

If they made 14% return on equity and didn't pay divies prob never need to raise any more cash .....double equity in 7 years ....pretty good eh

Surely reinvesting at 14% return is better than giving it back to shareholders in this early stage of growth

Why does an increased divie needed to raise the share price?

[percy]

Which gives 6 cents per share, with a 50% dividend policy, which they could adopt, provides a 3 cent dividend. The dividend level is what will raise the share price. Plus the SP has to rise to enable HNZ to make a cash call. A Cash Call has to come to finance any expansion.

With 16%
YES 16%
and I will repeat, 16% equity ratio HNZ has a huge capacity to expand without raising further cash.
You will not find an institution in Australasia with a better equity ratio.
Also profitability will add to the 16% equity ratio.
Only requirement for further funds would be if they took over F&P Finance,in which case they would most probably do a placement to institutions.

[mouse]

If they made 14% return on equity and didn't pay divies prob never need to raise any more cash .....double equity in 7 years ....pretty good eh

Surely reinvesting at 14% return is better than giving it back to shareholders in this early stage of growth
Why does an increased divie needed to raise the share price?
People buy shares for either a dividend stream, or a capital gain. The present shareholders of HNZ had a dividend stream, particularly from Pyne Gould. Maybe we have to have a new lot of shareholders who are in it for a capital gain. They of course will buy at 50 cents, as I did for the majority of my HNZ shares. But the shares allocated from Pyne still make me a bit furious. The NZ sharemarket is a bit like the Wild West. In fact, it is the wild west. Unfortunately no sign of John Wayne, nor Tonto on the horizon.

[percy]

[QUOTE=mouse;390660. But the shares allocated from Pyne still make me a bit furious. The NZ sharemarket is a bit like the Wild West. In fact, it is the wild west. Unfortunately no sign of John Wayne, nor Tonto on the horizon.[/QUOTE]

.
Bit like the sharemarket crash of 1987. Learn,get over it, and move on.
HNZ is a very good company,building a bright future for New Zealanders,borrowers,lenders and shareholders.

[mouse]

The point is, Christchurch is a bit hot. Much better to sit at the computer than riding over the range, even with Tonto. Problem Percy is that the Pyne investors, and I was one at a fairly low price, have not got over it. They are waiting to sell. Plus CBS lot want to sell and joined by the Southern Cross lot. All of this is depressing the SP. How long it will be hot for in Christchurch, or how long it will take the unwilling holders of HNZ to divest themselves of the stock is a bit unknown.

.
Bit like the sharemarket crash of 1987. Learn,get over it, and move on.
HNZ is a very good company,building a bright future for New Zealanders,borrowers,lenders and shareholders.

[percy]

The point is, Christchurch is a bit hot. Much better to sit at the computer than riding over the range, even with Tonto. Problem Percy is that the Pyne investors, and I was one at a fairly low price, have not got over it. They are waiting to sell. Plus CBS lot want to sell and joined by the Southern Cross lot. All of this is depressing the SP. How long it will be hot for in Christchurch, or how long it will take the unwilling holders of HNZ to divest themselves of the stock is a bit unknown.

Mouse,time to move on.
I am happy with HNZ share price.I am excited by their prospects.Earnings and future earnings will drive the share price.You/every one is free to buy or sell HNZ shares,depending on your/their view of the company.

[blobbles]

Which gives 6 cents per share, with a 50% dividend policy, which they could adopt, provides a 3 cent dividend. The dividend level is what will raise the share price. Plus the SP has to rise to enable HNZ to make a cash call. A Cash Call has to come to finance any expansion.

When I price a company, I generally don't do it based on what they state as their divided policy, particularly if the company is in growth phase. Imagine Apples price over the past few years if all investors did that! I assume that any money that is not handed out as divies (particularly with financial instos) will go towards bigger divies later. As others have said @16% equity they are looking pretty hot in that department already plus their stated desire to become "a regular dividend payer", what more do you want?

I am a fresh investor in the company so don't have any bad feelings of previous mischief from when they were separate instos. If those that do want to mistakenly sell their shares for less than they are worth, thats not my problem. All it means is the SP will lag behind its real value for longer than it should.

Currently HNZ is offering some damn good deposit rates. My feeling is once these are advertised strongly it will result in more deposits, more money to loan, while maintaining their good equity position and returning higher profits.

I am always the optimist however I haven't seen any convincing arguments yet to dissuade me of said optimism.

[mouse]

Blobbles, the situation that people are not only thinking of selling below the assett backing of their shares, but are doing it in droves, is holding down the price. I think that anyone going in now will do well. At 50 cents investors got the shares at half price to assett backing. What we are seeing is an irrational reaction to past problems. So I actually think Percy is totally correct in his postings. However, he does not look like Tonto and may not even be able to ride a horse.

[Xerof]

I am a fresh investor in the company so don't have any bad feelings of previous mischief from when they were separate instos.

you have exposed the 'problem' as to why it trades below nta. I have tried to make this point before, and it remains a key reason for my reluctance to become a shareholder

almost everybody who owns these is pissed off, under water to varying degrees, or is impatiently waiting to see some action. In addition to those who have these in their portfolio at ~88 cents, you have subunderwriters to the cap raise from 75 and 65, and (possibly/probably) the "smarts" who took PGC's holding off them cheap, looking for an exit as well.

it's no wonder it can't gain traction!

that said, percy will have his day in the sun, it's a matter of having the patience to hold them for another few years

[percy]

you have exposed the 'problem' as to why it trades below nta. I have tried to make this point before, and it remains a key reason for my reluctance to become a shareholder

almost everybody who owns these is pissed off, under water to varying degrees, or is impatiently waiting to see some action. In addition to those who have these in their portfolio at ~88 cents, you have subunderwriters to the cap raise from 75 and 65, and (possibly/probably) the "smarts" who took PGC's holding off them cheap, looking for an exit as well.

it's no wonder it can't gain traction!

that said, percy will have his day in the sun, it's a matter of having the patience to hold them for another few years

Thanks Xerof.
As I have come to expect from you an excellent post with very valid points.Heartland will not happen overnight.It is however happening,and your advice to be patient should be remembered by all Heartland investors.I well remember selling my Ryman, that I got at the float,after a couple of years as "they didn't seem to be doing much."I certainly am looking forward to my "day in the sun".!!!!

[mouse]

In the interim, people are going to sell some of the shares once the price looks acceptable, and hold the rest. So it is not just fed-up investors who are looking to sell all, it is quite a few who need to balance their share holdings and get some of the new John Key opportunities. Which will see more value? How much to have in HNZ? So the SP could well be under pressure for two years. Having said that, a price around 70 cents could well be satisfactory for a handy number of investors.

Thanks Xerof.
As I have come to expect from you an excellent post with very valid points.Heartland will not happen overnight.It is however happening,and your advice to be patient should be remembered by all Heartland investors.I well remember selling my Ryman, that I got at the float,after a couple of years as "they didn't seem to be doing much."I certainly am looking forward to my "day in the sun".!!!!

[Dej]

Hi all,

I am beginning to think there is gold in the Heartland.

If you refer to page 20 of the 2012 annual report

http://www.heartland.co.nz/_upload/reports/pdfs/annual-report-2012.pdf

You will see there is total equity of $375m, which includes $20m of goodwill (there is $22m of intangible assets, of which $2m is software)

Strip out the goodwill, and the company is worth $355m.

There is around 389m shares on offer, which suggests that $355m/389m = 91c per share.

Current price is 68c, or 33% less the net asset backing less goodwill.

What am I missing here?

Its a startup bank is what I would have said? Correct me if im wrong

[kizame]

Your missing nothing Sparky,it has been stated all along there were about 89cents of nta/share,the fact the market doesn't reflect this is a mystery,but inevitably they will claw their way back to reflect that value I guess when they prove an increasing bottom line.
However the fact the market has risen so much,and is roaring ahead whilst HNZ languishes, and is also a safer bet than most at current valuations hmmn. I can only suggest they will have their day when the rest of the market corrects,and people start looking for cheap overlooked stocks.I still think this stock will be excellent accomodation for my share investment dollars.Patience.

[kizame]

For me there are no negatives with this company,it is holding it's value at the most at the mo.
But I'm looking for the boring steady performer to eventuate,once runs start to be scored.
I guess for you,you just need to wait for the move above 70c,and don't need to do anything until that happens.

[percy]

I don't think it is a startup bank, not like Kiwibank was ten year ago. I think that misunderstands Heartland's position.

It is already one of New Zealand's bigger finance companies (that isn't hard after the GFC), but the banking license is not the start of a new business altogether, but represents an opportunity for cheaper and sustained organic growth from around $2b in lending already. They already have offices around the country that could act as branches for retail banking in provinces or various financial services for sectors like agriculture and insurance. Their agricultural finance can leverage off the retail network that PGG Wrightson has.

They don't technically need to open a branch in every suburb, and they don't appear too be going head to head for the kind of customers that Kiwibank want.

They look much more like a specialist agricultural bank, perhaps like Rabobank if you will.

With the rise of the internet, and the embracing of the internet by farmers, Heartland won't need a traditional bank structure anyway for services that are more geared around business and agricultural lending. Mobile reps with iPads and mobile printers can come to the farmer and sign the loan over a hay bale.

Great to have you on board.You have summed up HNZ exactly as I see it.Look forward to your future HNZ [and other companies] posts.

[percy]

For me there are no negatives with this company,it is holding it's value at the most at the mo.
But I'm looking for the boring steady performer to eventuate,once runs start to be scored.
I guess for you,you just need to wait for the move above 70c,and don't need to do anything until that happens.

Well Kizame,you and Sparky have made my day.Great posts.
Don't think it will be to long before we see runs scored.Every result just seems to get better.

[blobbles]

Hi all,

I am beginning to think there is gold in the Heartland.

If you refer to page 20 of the 2012 annual report

http://www.heartland.co.nz/_upload/reports/pdfs/annual-report-2012.pdf

You will see there is total equity of $375m, which includes $20m of goodwill (there is $22m of intangible assets, of which $2m is software)

Strip out the goodwill, and the company is worth $355m.

There is around 389m shares on offer, which suggests that $355m/389m = 91c per share.

Current price is 68c, or 33% less the net asset backing less goodwill.

What am I missing here?

Heartlands share price should be in the 90c to $1 mark, given both their NTA and their profits are about 6c per share plus their excellent equity position. See the previous few posts why it isn't there though, pissed off holders keeping the price down most likely.

People claim there aren't any bargains to be had on the NZX obviously aren't looking at these guys. They are my largest holding, not because I expect a capital gain but because I expect an excellent and growing rate of return. My pick is a 6-10c dividend this year, at below 70c SP, thats a damn good bargain.

Remember they are sitting on quite a bit of cash, are a fully NZ funded and new bank in a banking environment that is highly profitable and has lots of customers who will switch loyalties for a higher rate of return (and check out thei current savings account rates, 4.5% for 1 year TDs and much better saving account rates than the other banks). Their growth, should they play their cards right, which they seem to be, should be assured.

[Penfold]

I considered buying late last year. I decided not to based on the unknown costs (on-going and one-off) of bank registration, the amount of loans they must have in Canterbury that are still the subject of claims, and the cost of new branches and consolidation of others.

I like the target market they are aiming at. I don't know if they have the economies of scale to prosper in an all out mortgage war between the majors.

Will keep an eye on them, but suspect they will plod along for some time yet.

[mouse]

The whole question is, what is the dividend this year? If we get a 6 cent dividend I will be over the moon, as will the share price. I think it far more likely to be a three cent dividend, one cent interin, two cent final. Three cents might move the share price, but I doubt it. Plus bank shares around the world seem to not be in demand. We have lots of sellers at 70 cents. There will be more at eighty cents. And that is the problem, people do have a memory and those who were badly burnt might not have further appetite for a barbecue. I think Heartland is OK, but time has to pass before the share price recovers. Which means its a hold medium term if you own Heartlad shares at present.
I considered buying late last year. I decided not to based on the unknown costs (on-going and one-off) of bank registration, the amount of loans they must have in Canterbury that are still the subject of claims, and the cost of new branches and consolidation of others.

I like the target market they are aiming at. I don't know if they have the economies of scale to prosper in an all out mortgage war between the majors.

Will keep an eye on them, but suspect they will plod along for some time yet.

[winner69]

I strongly doubt a growing company would be paying out a 10c dividend which on current SP would be 15% yield.

I would suggest a 4-5% dividend on today's price, which would suggest around 3c.

At that rate you would be better putting money in HNZ than owning it ... at least this year

Just winding percy up

still can't see why you guys think it so important to give most of the earnings away as dividends .... surely with a target of achieving 14% ROE you are better off letting them using your money .... unless you have better investements erning more than 14% pa .... and if this is case why be in HNZ in the first place

[mouse]

The problem is, most investors in Heartland originally put their cash in to get an income stream payed every six months. So it is not just important to pay regular dividends, it is essential. Three cents annual dividend should hold the share price where it is, or may even persuade it a bit higher. We just have to wait. Another two years or more.

At that rate you would be better putting money in HNZ than owning it ... at least this year

Just winding percy up

still can't see why you guys think it so important to give most of the earnings away as dividends .... surely with a target of achieving 14% ROE you are better off letting them using your money .... unless you have better investements erning more than 14% pa .... and if this is case why be in HNZ in the first place

[winner69]

I'm not sure a higher dividend will drive the price up. If you want a dividend play, there are better stocks like TEL, HLG.

For what is a smaller company, and technically a young company, the share price will be driven higher by the likelihood of future earnings growth. In the end, people will pay more in expectation of better profits in the future.

A smallish dividend though will attract some investors who need the comfort of the money coming through every six months. Arguably it also prevents directors and management from getting dangerous ideas in having too much cash lying around.

But if they kept all the earnings and still made the promised (sorry targeted) 14% ROE all the cash would be working hard growing the company by lending out more and more

Shareholders would be better off in the long term if all earnings (no divie) are reinvested at 14% - shareholder equity would double in 7 years ... and go up at a faster rate

[percy]

But if they kept all the earnings and still made the promised (sorry targeted) 14% ROE all the cash would be working hard growing the company by lending out more and more

Shareholders would be better off in the long term if all earnings (no divie) are reinvested at 14% - shareholder equity would double in 7 years ... and go up at a faster rate

Now look here winner69,I have told you before HNZ depositors and investors are NICE PEOPLE, and here you are trying to turn us into greedy capitalists.Very naughty of you.!!!

[mouse]

Brilliant, Percy.
Now look here winner69,I have told you before HNZ depositors and investors are NICE PEOPLE, and here you are trying to turn us into greedy capitalists.Very naughty of you.!!!

[percy]

Long term investors in HNZ shouldn't be talking up divies to "hold the sp up" - until there is a capital gains tax in NZ I want every, and I mean every!, cent invested in growth!

You are most probably right.Each $16mil of net profit gives them the capacity to fund an extra $100mil of lending while retaining their 16% equity ratio. Compounding growth from retained earnings certainly adds value to any company, makes dividends seem a waste of valuable capital.

[SCOTTY]

You are most probably right.Each $16mil of net profit gives them the capacity to fund an extra $100mil of lending while retaining their 16% equity ratio. Compounding growth from retained earnings certainly adds value to any company, makes dividends seem a waste of valuable capital.

If your capital is so valuable to you, why not rent out your house and go and live under a bridge :). Some of us need income to live on :D.

[percy]

If your capital is so valuable to you, why not rent out your house and go and live under a bridge :). Some of us need income to live on :D.

Sold the house awhile ago.Dam noisy under the bridge.More cars going by all the time,with car sales going gang busters. MARAC must be doing really well financing them.

[winner69]

If your capital is so valuable to you, why not rent out your house and go and live under a bridge :). Some of us need income to live on :D.

Could sell a few of your shares each year for income ..... the way we are talking they will worth at least 20% more each year anyway and you will still ne heaps better of then taking divies

[SCOTTY]

Could sell a few of your shares each year for income ..... the way we are talking they will worth at least 20% more each year anyway and you will still ne heaps better of then taking divies

I don't think the house value will grow at a steady 20%pa so will probably sell and move in with Percy under the bridge. A river life style would be very pleasant at this time of year especially with the house proceeds compounding away in HNZ :) Should be able to fund a decent Christmas party next year.

[Cool Bear]

Sold the house awhile ago.Dam noisy under the bridge.More cars going by all the time,with car sales going gang busters. MARAC must be doing really well financing them.
any spare rooms for us visiting yr "under the bridge" abode? 4292

[percy]

any spare rooms for us visiting yr "under the bridge" abode? 4292

Cool Bear,
Thank you,absolutely perfect,with plenty of room for all my visiting share trader friends who are NICE PEOPLE and hold HNZ shares too.!!!! Asset rich/cash poor,which reminds me of the presentation at the HNZ agm,[about the last item];medical,yes HNZ will lend all of us[well some of us] asset rich/cash poor the money for our medical operation.Suppose they will take security of my "under the bridge" abode? lol.
To all my NICE PEOPLE friends in Auckland and Northland,who had an Anniversry Day today,sorry we cleaned out all the HNZ shares going at 68cents today.!!!!!Yeah Right.! lol

[biker]

I'm in Auckland and cleaned out a few! ;-)

[percy]

I'm in Auckland and cleaned out a few! ;-)

Good on you.
I am up there on Wednesday for the day.Late flight home, so am looking forward to a nice meal of Snapper and chips.!!!

[percy]

I'm waiting for 70 cents to be tested again. Shouldn't be soon now, starting to thin out. When that ceiling is broken you can bet I will be in there!

Look forward to you joining us.May not happen until the interim is out [some time February] or when the advertising gets going[a few weeks time I hope] .However I agree with you,sellers thinned out the last few days,so we never know? Whatever I am "well positioned".!!! lol

[Joshuatree]

"Heartland".. a magnificent series, make sure you watch it....... 5 stars ... A cross between "The Wind In The Willows " and Coronation St". Whos going to be under the bridge tomorrow?. Find out and make a date with.......... "Sharetrader":confused:

[lowrolling]

I also found a great opportunity in the USA with a mispriced company that fits my "value investors" philosophy to a tee.

Do you mind disclosing which company you invested in?

Thanks.

[mouse]

I suppose, Percy, that having an under-the-bridge abode enables you to not only fly to Auckland on the Red Eye Special, but also catch your fish from the bridge when you get home. I thought of sleeping under bridges early on when Pike blew up and Pyne went under. So I am quite negative about a major price move upwards until the 'reluctant shareholders' have dumped their shares. Some of us, myself included, can hold long term. Others cannot and that is depressing the price.
Good on you.
I am up there on Wednesday for the day.Late flight home, so am looking forward to a nice meal of Snapper and chips.!!!

[biker]

I suppose, Percy, that having an under-the-bridge abode enables you to not only fly to Auckland on the Red Eye Special, but also catch your fish from the bridge when you get home. I thought of sleeping under bridges early on when Pike blew up and Pyne went under. So I am quite negative about a major price move upwards until the 'reluctant shareholders' have dumped their shares. Some of us, myself included, can hold long term. Others cannot and that is depressing the price.

A little bit of positive news and those reluctant shareholders may become reluctant sellers

[iceman]

I was hoping that 70 cents would be blasted when the banking license and dividend were announced but that came to naught. I shall be watching HNZ closely the following weeks and looking for that oh-so-crucial moment when I can finally buy-in, cheers.

I hope it doesn't take off just yet. Allows me to accumulate a bit more and add to my "overweight" position as my meager finances allow ;) I have faith that we will see reasonable capital growth after they report and a very good dividend yield for those of us buying at current or lower prices

[percy]

Feb 27 at 9am

https://www.nzx.com/companies/PGW/announcements/232300

Thanks for letting us know when PGW reports,but I wonder if you could also give us the date HNZ reports?

[biker]

HNZ not notified yet

[percy]

I think it will be released on 25th February.

[Dej]

5 Awesome facts about clowns:


1. Today’s clowns have white faces because the first clowns centuries ago would kill children that didn’t laugh and grind up their bones. During this process the clowns face would become white with bone dust. Eventually, clowns were forced to stop killing children, but the implied inducement to laugh that the white face represented remains.


2. Clowns often rub themselves with a mix of cotton candy and liquid butter to hide their stifling clowny odor.


3. Although it doesn’t appear in his official biography, Kim Jong Il ran off with the circus as a clown for several years as a teenager. His father found him and forced him to give it up. His dad did, however, allow him to keep his hilarious oversized clown pompadour.

4. Often, people who are alcoholics are drawn to clowning. The makeup and clown suits cover up most of the visible signs of alcoholism. Slurred speech, shaky hands and the inability to walk a straight line are all pluses if you are a clown. Hobo clowns were often just hobos picked up by the circus while drunk, put in makeup and allowed to wander freely through the circus tent. Also, alcoholics are able to get away without purchasing a red, bulbous nose.

5. Clown is a German word meaning “don’t leave the kids alone with that one.”

:eek2:

Seems like a very demonic representation of clowns! :mellow:

[CJ]

I chose AIG, American International Group.An All Blacks fan then, or is it Man U for you?

[biker]

Got my shares overnight, so happy to say now.

I chose AIG, American International Group.

They were slaughtered in 2008/2009 over derivatives and other barely comprehensible investments, were bailed out by the govt after record losses, and have now (in my opinion) turned the corner.

Who do you use for a broker if I may ask?

[biker]

Forsyth Barr. Have had a long connection with a broker there whom I trust closely on general financial matters. Forbarr is a bit weak on US research but I pay for a couple of research services so don't mind that.

Off topic I know, but thanks Sparky

[Master98]

HNZ will change to "HeartLand Bank Limited" tomorrow on NZ stock market, i guess will have some other announcements come with.

[percy]

Sparky,
May I wish you well with AIG.Knowing how well you do your resaearch,I am sure you will find yourself "well positioned for the upturn".
Lovely day in Auckland thank you.At Remuera library using their computer before heading to Bucklands Beach for my Snapper and chips.!!!

[percy]

KW has posted some interesting links on Aussie Forum; the BIG FOUR Aussie Banks.

[percy]

Give Bucklands my love (used to live there), has been too long!

Great place,lovely sea views and enjoyed watching the ferries while eating my Snapper and chips.!!!

[percy]

Did you get a bonus fish today? I have been at my local lately, like earning bonus interim dividends, totally stoked!

No bonus fish,however,beauty day,great place was enough of a bonus.Up at 4.30 am,in bed 11pm,making the most of the day.!! lol.

[lowrolling]

Got my shares overnight, so happy to say now.

I chose AIG, American International Group.

They were slaughtered in 2008/2009 over derivatives and other barely comprehensible investments, were bailed out by the govt after record losses, and have now (in my opinion) turned the corner.

That was very considerate of you, thanks.

[lowrolling]

Got my shares overnight, so happy to say now.

I chose AIG, American International Group.

They were slaughtered in 2008/2009 over derivatives and other barely comprehensible investments, were bailed out by the govt after record losses, and have now (in my opinion) turned the corner.

How is AIG any better than HNZ?

[lowrolling]

Maybe its not. I don't presume to have a greater wisdom than anyone else. But I do have my own investment methodology which puts a stronger emphasis on current value, earnings per share and earnings growth.

My spreadsheet of lies and distortions says that AIG has been oversold and it has been a broken stock, even though the company has largely now navigated the crises it faced over the last few years. It is a value play, whereas Heartland is a growth play (which in the end, I have plenty of growth plays in my portfolio).

AIG is trading at roughly half of book value, which for an insurance company, is dirt cheap. The effects of Hurricane Sandy will hurt it for the next two-three months, but in a years time everyone will have forgotten about this.

I saw HNZ as a value play, was I wrong about that or has it changed from value to growth?

[lowrolling]

STC, when you made your decision I assume you factored in the falling USD ... Out of interest what % did you assume?

But the New Zealand dollar against the US dollar is currently one per cent undervalued, according to the Big Mac index.

[winner69]

Yes, I think the long term mean reversion is 72-74c.

Which is my 2 c worth... :-)

my 3 cents worth is that fair value is around 82 cents based on my PPP workings .... no emotion in that and one doesn't have to listen to uncompetitive exporters bleating on about an 'overvalued' dollar .... we should be proud as a nation to have a strong dollar

[blobbles]

I hate this to turn into a discussion about the US $, but my feelings have changed recently after I realised all the money that has been printed over the last few years will finally start making it's way into the real US economy this year and onwards. As a result, I expect some rather large inflation figures coming from the US at the end of the year and a subsequent loss of value in the US $. Which means a potential shakeup in world affairs (maybe China unhooking itself from the US $?) and a potentially even stronger NZ $ by years end... maybe we should move this to a US $ discussion?

[kizame]

I hate this to turn into a discussion about the US $, but my feelings have changed recently after I realised all the money that has been printed over the last few years will finally start making it's way into the real US economy this year and onwards. As a result, I expect some rather large inflation figures coming from the US at the end of the year and a subsequent loss of value in the US $. Which means a potential shakeup in world affairs (maybe China unhooking itself from the US $?) and a potentially even stronger NZ $ by years end... maybe we should move this to a US $ discussion?
Nah then I'll have to go somewhere else to read it. Banks (hnz) and dollars go together,so is apt discussion.

[percy]

The appointment of Richard.A.Wilks as a director looks good.A lot of banking experience .I note in google search he was ANZ National Bank's Chief Risk Officer in 2009.Also recently appointed a director of Rangatira,a very successful investment company.

[iceman]

Nah then I'll have to go somewhere else to read it. Banks (hnz) and dollars go together,so is apt discussion.

Well don"t go to the HNZ website to try to read about FX values. I had a few pounds to change yesterday and looked up all the banks websites to see what their rates were before I went into town to change the money . Found all with ease except HNZ, stuffed if I can find their FX rates. Very very disappointing website indeed and they need to fix it up pronto if they want to be taken seriously as a "bank" by the general population !

[K1W1G0LD]

Whoever said there are a lot of pissed off shareholders in HNZ has got it just about right I reckon. It's going to take a good interim result to clear the backup of sellers sitting between 68-70 cents, they're queuing up like lemmings jumping off a cliff!
Can't see the logic in it myself, I'd be holding off until the share price recovers and then sell, I guess its the herd mentality at work!

[percy]

Well I am very pleased with my HNZ investment.ALL PROMISES KEPT,clear plan.clear communication,growth sector,great equity ratio,still trading at a discount to NTA,paying a dividend.I look forward to HNZ growth with a sense of excitement.Great value.People buy/sell everyday,some clever,some silly,others dilly.I hold,and look forward to adding to both mine and my wife's holding.

[mouse]

The problem is that Heartland has a lot of Christchurch investors from Pyne Gould, plus Canty Building Soc investors in Canterbury. All have not just lost cash with Heartland, but also lost their marbles with earthquakes. So they take the cash now. And there are so many in this situation. Common sense says its worth 75 cents on the original float, which is what major investors paid. Remember a whole lot of investors lined up to sell out of Pyne to George at half assett backing. In Canterbury we are suffering from shaken brains. So hold, things can only improve, stay the same, decline. A pretty accurate forecast I think.

Whoever said there are a lot of pissed off shareholders in HNZ has got it just about right I reckon. It's going to take a good interim result to clear the backup of sellers sitting between 68-70 cents, they're queuing up like lemmings jumping off a cliff!
Can't see the logic in it myself, I'd be holding off until the share price recovers and then sell, I guess its the herd mentality at work!

[K1W1G0LD]

Yes, you have my sympathies Mouse, I was born and bred in chch and still have family there, you must be a hardy lot to remain, it's a lot calmer up here in the Bay of Plenty.
I'm in this one for the long term holding and adding while they're still cheap. This looks more and more like its going to be a great little Bank .

[mouse]

Exactly. I do not think it is going to try and compete with the retail banks, for want of a better description, but it will do very well from looking after contractors, farmers, etc. I am negative about Heartland closing the Sydenham Money Club office, I think they will regret it. Plus I think they have to do some housing mortgages. Long term the shares are a steal at the present price. I think we should get to a dollar by the end of this year. A 50% profit on todays price.
Yes, you have my sympathies Mouse, I was born and bred in chch and still have family there, you must be a hardy lot to remain, it's a lot calmer up here in the Bay of Plenty.
I'm in this one for the long term holding and adding while they're still cheap. This looks more and more like its going to be a great little Bank .

[pierre]

I see a Heartland Bank advt in today's Dom Post advertising invoice finance for businesses. That's a pretty secure product with a good margin and an excellent way to differentiate themselves from the mainstream players - though I think BNZ do have a similar product. Let's hope this is the start of their marketing activity to build profile for themselves and the SP.

[percy]

I see a Heartland Bank advt in today's Dom Post advertising invoice finance for businesses. That's a pretty secure product with a good margin and an excellent way to differentiate themselves from the mainstream players - though I think BNZ do have a similar product. Let's hope this is the start of their marketing activity to build profile for themselves and the SP.

A good simple,clear ad that gets the message over.Pleased to see HNZ advertising product in their ad.
Will watch for more.!

[percy]

Ah - thats very interesting. They are defining niches nicely for themselves, small business focused.

Well no surprises there, as small business is after all............................................... ........... you guessed it;.....HEARTLAND NZ...

[iceman]

Half year result to be announced on 25th of Feb. Will be interesting !

[Jay]

Maybe not so much forgotten but missed by a lot of people

[tim23]

Not missed by those who care, timing of announcement doesn;t have anything to with the news I would have thought as results are usually 9am?

[mouse]

I am interested that the sp is in the doldrums. I suspect part of the problem is that people, including investors, cannot deal with multiple decisions and uncertainty. So they worry about their holdings in Heartland plus the Earthquakes here in Canterbury. Many homes are still not repaired. It will take years for repairs to be completed.
So they sell Heartland. It had a predominantly Canterbury shareholding. I suspect there are far more Canterbury sellers than buyers. Caused by quake shock. Any ideas?

[CJ]

I wouldn't all it doldrums. It is just a bit static as people wait to see what the next piece of news is.

[robbo24]

It's hard to say. I live here in CHCH and work very closely with home owners, insurance compnies, EQC and CERA.

There is a movement among people here away from large companies without that local "feel" - Insurance companies are certainly a big part of such distrust and resentment.

The scale of the rebuild, and the way red zoning has been implemented, means a lot of people will have to take out top up mortgages to buy, build or repair their home.

I would say if Heartland leaves a good impression with such people then they can capitalise on a good local reputation.

Personally, I don't see why necessarily Canterbury people would be quick to sell shares in local bank with the scale of construction and lending going on here.

I'm a Heartland holder and look forward to see how it goes.

[percy]

I am interested that the sp is in the doldrums. I suspect part of the problem is that people, including investors, cannot deal with multiple decisions and uncertainty. So they worry about their holdings in Heartland plus the Earthquakes here in Canterbury. Many homes are still not repaired. It will take years for repairs to be completed.
So they sell Heartland. It had a predominantly Canterbury shareholding. I suspect there are far more Canterbury sellers than buyers. Caused by quake shock. Any ideas?

Doldrums.No poised. 748,756 shares traded today.Positive market.
Vechicle sales are at record levels,with ChCh leading the market.HNZ's MARAC will be getting their share of the financing,as they will be of machinery and equipment needed for the rebuild.With the rebuild going on for a good number of years the long term out look for HNZ is excellent.Savy investors are realising you are better buying Heartland bank rather than an Aussie bank because of the tax credits.I am looking forward to the interim report on the 25th with a sense of excitement.

[K1W1G0LD]

Fasten yer seatbelts......................................!

[janner]

I wouldn't all it doldrums. It is just a bit static as people wait to see what the next piece of news is.

With so many people wetting their knickers with excitement. It is difficult to predict what will happen.

[Minerbarejet]

:eek2:<----------aqojwrpokjQOPJT3JQ!!!
Your seat belt is too tight, Moosie

[Minerbarejet]

lol, my brain... is... fried...

DISC - Not holding HNZ, but watching EXTREMELY closely with all of good intentions!
You have been buying too many NTL Moosie

[K1W1G0LD]

Good to see HNZ buyers starting to form an orderly queue too............!!

[Minerbarejet]

Hit the 70 again - is this the breakthrough we need or was that Moosie at it again

[janner]

Very much a "steady as she goes" type result is what I expect ...

My expectation too belg.. Will it be enough to stop them ( The Knicker Wetters ) taking a small profit ??

The up side to that is the price will be low enough for a while to add a few more..

[percy]

Very much a "steady as she goes" type result is what I expect ...

That's what I am expecting too.

[percy]

It's good to see there are those who are wetting their pants over the possibilities and those who are fairly neutral and level-headed. At least no one is negative on this one.

Heartland have laid strong foundations for a great business."Steady as she goes " means to me "steady as she grows."
That I find exciting.!!

[K1W1G0LD]

To right it does.!!!
Watch out for Belgarion's balloon.Easy to spot as it is in the shape of a GIGANTIC Pyramid....Hoot Hoot..!

heres a quote from steady as she goes Percy

[K1W1G0LD]

Toot Toot

Many on here will be very Chuff Chuff Chuffed :=))


Hahaha.....................and one from staid old Janner , who likes crticizing others for being foolish.

[janner]

Hahaha.....................and one from staid old Janner , who likes crticizing others for being foolish.


Just offering the benefits from many many moons of error.. Most very enjoyable :-)

Be sure to keep " er indoors " waiting for that New Kitchen..

[percy]

K1W1GOLD - we are blessed for your participation on this thread.

Janner, Percy - I see God, in his infinite wisdom, has chosen to grant you a new friend. Sorry about that.

Yes,and I must admit Belgarion building his new GIGANTIC Pyramid Balloon will set the share price into an "Almigty" upward trejactory.
As always, I am "poised" for the upturn.My snoring is getting broken up by a steady stream of Toot,toots with the odd chuff chuff.

[ETC]

I hope they do come out with a steady as she goes approach - slow growth with long term profits in mind.

I'm weary of acqusition that require more capital from shareholders or institutional placements that would dilute current shareholdings.

I also wasn't impressed at the management for giving themselve shares after the merger was completed. Congrats, you've brought together CBS, SBS and PGC. This is what you were paid to do - you don't get a bonus for doing your job, you get a bonus for exceding expectations (they are yet to do this in my opinion).

Former PGC holder now HNZ holder, in it for the long run.

[percy]

I hope they do come out with a steady as she goes approach - slow growth with long term profits in mind.

I'm weary of acqusition that require more capital from shareholders or institutional placements that would dilute current shareholdings.

I also wasn't impressed at the management for giving themselve shares after the merger was completed. Congrats, you've brought together CBS, SBS and PGC. This is what you were paid to do - you don't get a bonus for doing your job, you get a bonus for exceding expectations (they are yet to do this in my opinion).

Former PGC holder now HNZ holder, in it for the long run.

I think all of us who started off holding HNZ from PGC distribution would share your views and concerns.
They need more runs on the board.I am sure they will get those runs, and in the long term it will turn out a very successful investment.

[mouse]

What we have here is a Finance Company, and I like finance companies, which somehow has managed to get itself a Bank title. I feel that Heartland has a much more diverse loan book than many banks. The problem is they have to know the business they are lending on. I think they do, but Marac went bust. Plus never forget that PGC shares were $5.00 each at one time. Those same shares might be worth 5 cents today.. People in Canterbury are shocked about what has happened. Hopefully we get a cent interim at least, and one and a half cents would be useful. Confidence will take some time to recover. Can you make a prediction please Percy.

I hope they do come out with a steady as she goes approach - slow growth with long term profits in mind.

I'm weary of acqusition that require more capital from shareholders or institutional placements that would dilute current shareholdings.

I also wasn't impressed at the management for giving themselve shares after the merger was completed. Congrats, you've brought together CBS, SBS and PGC. This is what you were paid to do - you don't get a bonus for doing your job, you get a bonus for exceding expectations (they are yet to do this in my opinion).

Former PGC holder now HNZ holder, in it for the long run.

[percy]

What we have here is a Finance Company, and I like finance companies, which somehow has managed to get itself a Bank title. I feel that Heartland has a much more diverse loan book than many banks. The problem is they have to know the business they are lending on. I think they do, but Marac went bust. Plus never forget that PGC shares were $5.00 each at one time. Those same shares might be worth 5 cents today.. People in Canterbury are shocked about what has happened. Hopefully we get a cent interim at least, and one and a half cents would be useful. Confidence will take some time to recover. Can you make a prediction please Percy.

Chairman of HNZ, Bruce Irvine brought some of those PGC shares at $5,so he has real skin in the game.Marac went bust, as did a lot of finance companies, through lending 30% of their book on property sector.That was twice their capital.Marac did not understand the property sector.Marac was, and is a hugely successful lender on vechicles and equipment.You will note from their presentations how wide spread their loan book is, and how well spread are their borrowings.Most people have got over their shock and are enjoying the opportunities that are avaliable.I hope you get a divie,I am more interested in the "steady as they go/grow " progress they are making.

[mouse]

But of course, you can only pay a dividend if you have a bit of profit. Results awaited with interest. Didnt know Bruce Irvine bought at $5.00. Should he be running the Company?

Chairman of HNZ, Bruce Irvine brought some of those PGC shares at $5,so he has real skin in the game.Marac went bust, as did a lot of finance companies, through lending 30% of their book on property sector.That was twice their capital.Marac did not understand the property sector.Marac was, and is a hugely successful lender on vechicles and equipment.You will note from their presentations how wide spread their loan book is, and how well spread are their borrowings.Most people have got over their shock and are enjoying the opportunities that are avaliable.I hope you get a divie,I am more interested in the "steady as they go/grow " progress they are making.

[percy]

But of course, you can only pay a dividend if you have a bit of profit. Results awaited with interest. Didnt know Bruce Irvine bought at $5.00. Should he be running the Company?

Yes,he runs is it splendidly.Very approachable,returns phone calls,widely experienced,and speaks clearly and openily.
Read his background and you will appriciate his capablities.

[mouse]

Yesss. But Five Bucks??????????????

Yes,he runs is it splendidly.Very approachable,returns phone calls,widely experienced,and speaks clearly and openily.
Read his background and you will appriciate his capablities.

[percy]

Yesss. But Five Bucks??????????????

Yes the world has changed.

[ETC]

Its not just Bruce that bought in at five dollars. There are a lot of long term shareholders from PGC that are now part of HNZ. Luckily I bought in quite low with PGC when they were talking about creating a bank out of Marac. I was happy to receive my HNZ shares but that left me with PGC shares that I did not want. I think a lot of people were in the same situation which allowed George Kerr the opportunity to buy up most of PGC. Good on you to the hold out, the related party lending in that company needs a thorough looking at by the FMA.

What I hope to see from the HNZ's half year result other then steady profits is an improvement in costs. They've had two years now to integrate the three companies, its about time we see some economies of scale happening.

Does anyone know what the scenario with the employ share scheme is? Are they buying off the market or not?

[Cool Bear]

Am pleased to report I am now a Heartland shareholder, after some significant due diligence over the last month.

You may recall that I decided to invest in US insurance company AIG instead of Heartland a few weeks back.

After some serious thinking and further investigation, I found some more investable funds to apply to HNZ.

I look forward to the ride!


Welcome to the club Sparky, that last one at 70 yours? That 20k at 69 was part of my queue to buy. HNZ is a major part of my holding at the moment and I think I max out already.

[Arbitrage]

Here is hoping that the good results from CBA today will reflect in the NZ banking scene. HNZ results are on 25th February I think.

[Under Surveillance]

Yes,he runs is it splendidly.Very approachable,returns phone calls,widely experienced,and speaks clearly and openily.
Read his background and you will appriciate his capablities.

I trust you are right, Percy, but isn't he still on the RAK board? What does that say for his capabilities/judgement? It could be argued thatat RAK he is trying valiantly on behalf of the general shareholders against the tyranny of the Robinsons. However he would been kinder to the general punters had he resigned, say, half a dozen profit downgrades ago.

[percy]

Am pleased to report I am now a Heartland shareholder, after some significant due diligence over the last month.

You may recall that I decided to invest in US insurance company AIG instead of Heartland a few weeks back.

After some serious thinking and further investigation, I found some more investable funds to apply to HNZ.

I look forward to the ride!

Welcome aboard.

[Master98]

Am pleased to report I am now a Heartland shareholder, after some significant due diligence over the last month.

You may recall that I decided to invest in US insurance company AIG instead of Heartland a few weeks back.

After some serious thinking and further investigation, I found some more investable funds to apply to HNZ.

I look forward to the ride!

Welcome on board STC, i am more confident on my holding now:)

[percy]

I trust you are right, Percy, but isn't he still on the RAK board? What does that say for his capabilities/judgement? It could be argued thatat RAK he is trying valiantly on behalf of the general shareholders against the tyranny of the Robinsons. However he would been kinder to the general punters had he resigned, say, half a dozen profit downgrades ago.
Hopefully with HNZ going so well,he will give up his Rakon directorship.Must admit if I was a Rakon shareholder I would be sorry to see him leave.A very capable straight shooter.

[robbo24]

71 cents... The market is reacting to STC.?

[Master98]

Ok, so here's why I like Heartland. I am VERY confident that they will average 15% earnings growth over the next five years. They will probably meet earnings expectations for this year, and I believe will exceed expectations in 2014.

With 4cps in earnings, and using Sparky's back-of-the-envelope valuation method, then 2 x growth x earnings gives me $1.20.

Using my risk-free-rate IV model (a more accurate and tougher analysis tool), I get an intrinsic value of $1.03. I tend to buy when I can see a 50% difference between current price and intrinsic value. Heartland, at 70c, gave me 47%. Near enough is good enough... (or so much for discipline, some might say)

So roughly 50% upside based on 2012 earnings and that 15% growth rate. If they can meet their 2013 earnings, then I would look to re-rate this stock closer to $1.50 by the end of this year/this time next year.

If they declare a dividend, then this has winner written all over it.

if i am right, HNZ year 2012 earnings was 6.3cps.

[Cool Bear]

A Sparky effect? Jeez, you are good to my ego...
Yes, STC, you are the spark that lit the fire under HNZ indeed!! i would like to say thanks a million but I do not have that much in HNZ.....

[percy]

Well I said welcome to Sparky The Clown.$1.50 within a year makes my prediction tame.!!!

[Huskeez]

Lol shiiiit all those .710 sellers didnt last long!

[kizame]

I feel a price target to look for is 86c based purely on technicals for the medium term.

[percy]

No difference between TVs or cars.Dealers have to pay for the cheap finance deals.
Marac only supports good dealers.Have a successful record on car lending.Both new and used.Your Toyota will still be a good car in 15 years time.
From reading the annual report and presentations you will understand HNZ do have the expertise,to undertake what they are doing.It is not rocket science.Rural lending officers are all PGW based.Marac has car,and machinery expertise,CBS have home loans expertise.Only new areas they are moving into are health and education.The health area I take they will fund expensive operations to asset rich cash poor clients.
For those who have their HNZ shares from PGC distribution,they can look to the future with confidence,owning shares in NZ's only listed bank.We can not change history,only learn from it.Property developement ruined PGC.From the ashes we have HNZ,who do what they say they will do.
You were very astute to buy another 15,000 HNZ at 50cents.Must have seemed like madness at the time.Now enjoy the divies,and whatch your shares go from strength to strength.Those selling have access to the same information as you,but lack your foresight.
At 12.35 pm on 12th December 2014 the share price will be $1.57,however 2015 will see the share price at $2.38 and it will be over $3.00 by December 2016..Will need a new crystal ball to see beyond 2016.[should prices be different from mine,you will know 'the market'got it wrong.]

Nice to see Sparky The Clown seeing HNZ share price at $1.50 a year before me.

[Huskeez]

I don't follow technicals as closely as others, so I won't doubt your assertion!I too am another who bought in based purely on technicals. Good to see the Fundamental/Technical investors both coming to the same conclusion in terms of potential :)

[CJ]

Sparky - I agree. In the short term it is a value play as I feel it is at a discount to true worth based on its recent history. It now has its banking licence and is on the right track to erase that discount. Longer term it will be a good growth stock with a regular dividend as a bonus.

[iceman]

A Sparky effect? Jeez, you are good to my ego...

Wish you had left it for another week STC so small time and poor investors like myself could continue "accumulating" and adding to our already overweight positions. You've made it more difficult with your takeover size purchases :(

[Cool Bear]

LOL! Pundits might note that I bought in 3c higher than when I first started sniffing at Heartland. So I paid a 4% higher price for my tardiness.

That being said, I bought AIG at 37.50, and it's now almost $39, so it increased 3.5% in that time.

No big deal I say. Happy to hold winners, even if I could have bought them cheaper. Though if I had REAL courage, I would own Heartland for 50c from 7 months ago.
HNZ will close at 73 today and that will be a 4% up for you too!:)

[iceman]

HNZ will close at 73 today and that will be a 4% up for you too!:)

80c by the end of Feb :)

[winner69]

Who has the 'tea lady' been talking to? She must have mentioned bonza something and punters listening

Doesn't it concern you loyal band of dedicated followers (like groupies) that maybe governance etc isn't as strong as it should be .... just maybe

[winner69]

please all ... forgive for even suggesting that .... heartland info is as tight as .... only a few know

OK it is just pure speculation on excited traders part .... after looking at CBA result they are getting excited with anything that has BANK in its name

At this rate 80 cents by tomorrow

[percy]

I am confident that Heartland will appoint a banking focused director at the expense of a non banking focused director by the years end.

They already have,with the appointment announced on 1st Feb of Richard Wilks to the board.

[percy]

Who has the 'tea lady' been talking to? She must have mentioned bonza something and punters listening

Doesn't it concern you loyal band of dedicated followers (like groupies) that maybe governance etc isn't as strong as it should be .... just maybe

Suspect she has been talking to Sparky The Clown.!!!!!

[mouse]

It can't last!

[Arbitrage]

Exactly, there is more money to be made elsewhere. Good to see the government has good financial analysts who know a good deal when they see it!

Maybe we should all just form a cult that invests wherever Milford Asset Management and ACC do with the Clown as our mascot???

Yes, ACC also hold GPG and I often wonder how much of our hard earned fees they lost there. Which begs the question as to why ACC is risking tax payers funds on the sharemarket? But we digress...

[percy]

Yes, ACC also hold GPG and I often wonder how much of our hard earned fees they lost there. Which begs the question as to why ACC is risking tax payers funds on the sharemarket? But we digress...

Their record of successful investing in the sharemarket means you have don't have work so hard to pay their fees.
Yes,it pays to watch what they do.

[percy]

Feel like next time I injure myself I should just say "pay me in HNZ stock please" :)

Love it.!!!!!!!!!!!!!!!!!!!!! lol.

[Lizard]

Feel like next time I injure myself I should just say "pay me in HNZ stock please" :)

Hehe. Right up my alley at the moment.... I'll test it next time they call. :D

[Arbitrage]

CBA vs todays ANZ result. What does this mean for HNZ? 65c by the end of the month or 80c?

[mouse]

Percy. I went down to the Childrens Bookshop, The Reading Bug, in Beckenham today. Gone. Closed. Empty shop. Then Beckenham Footware are closing down. What is happening to retail, or is it all going to the internet? Advice and comments please from you Percy. A bit off topic, but reflects the commercial situation in Christchurch at present. Is this happening around NZ? Other comments of course also welcome.
Note, share price doldrums reflects the Canterbury investors sentiments plus their financial position. So the value of Heartland is probably not reflected in the share price. Which gives a bit of help to lazy investors like me who buy and hold.

[robbo24]

Percy. I went down to the Childrens Bookshop, The Reading Bug, in Beckenham today. Gone. Closed. Empty shop. Then Beckenham Footware are closing down. What is happening to retail, or is it all going to the internet?

If they lease their premises they would have to move because commercial and office rent has increased substantially every year since the earthquakes.

If they were making a slim/moderate margin before the earthquakes after rent then they would surely be making a loss now...

However, if they own their premises then they will be leasing it out for a killing and moving to the internet!

[percy]

Hi Mouse.
Another big day finishing off another great week selling books to schools.Today, it was the lovely people of Oamaru who had the opportunity to purchase Percy's fine wares at great prices.!!! Why sit around waiting for customers when you can go to them.The Reading Bug,sat waiting for customers,who did not arrive.They did nothing to attract customer.They did not deserve to survive.
Beckenham/Sydneham are finding their customers have shifted to other areas.Areas change.Shopping habits are changing,internet,earthquakes are all working to mix us up.Barrington Mall is picking up a lot of Beckenham/Sydneham customers.Remember Riccarton and Northlands Mall took towns' customers.The Hub at Hornby is getting stronger.HNZ closed Sydenham Branch because it was past it's best by date,
Share price doldrums I can't understand you.EBO hit record hights,RYM going gang busters,even our LPC is starting to show signs of life.HNZ is seeing a lot of activity which is great.
As investors we need to note these changes and invest in go ahead companies, who are adapting and making profits from these changes.We must not get stuck with The Reading Bug and Beckenham footwear type companies.
Remember change equals opportunity.Winners/losers.Always been that way.