HGH - Heartland Group Holdings

[winner69]

Thats why I gave the venerable Mr Lee the credit for quoting from his column.


But did you get express permission to do so

He bit touchy on this in the past

[Xerof]

Can't see why he'd be touchy about it Winner, its a public page on their website.

I think Mike summed the situation up perfectly....just another misjudgement by the boys at S&P

I find Mikes commentaries refreshingly good to the same degree as I find Chris's diatribes boringly repetitive

as I said on the day, keep calm and carry on you HNZ loyalists, the S&P saga is a storm in a teacup

[winner69]

Can't see why he'd be touchy about it Winner, its a public page on their website.

I think Mike summed the situation up perfectly....just another misjudgement by the boys at S&P

I find Mikes commentaries refreshingly good to the same degree as I find Chris's diatribes boringly repetitive

as I said on the day, keep calm and carry on you HNZ loyalists, the S&P saga is a storm in a teacup

He made some rude comments about us Sharetraders once on his site cause we quoted some of his stuff

[Xerof]

Oh well, thick hides on here Winner.

I was neutral wasn't I? Brick for one, offset by bouquet for the other?:D

[mouse]

Maybe Heartland should get its rating from Fitch. Problem Solved.

[Balance]

He made some rude comments about us Sharetraders once on his site cause we quoted some of his stuff

Of course Chris Lee would.

He does not like the truth, and cannot handle the truth.

And the truth is that he is actually ignorant about financial matters when you consider how wrong he was with finance companies. He had his own rating system and that blew up big time and he quickly removed all references of the system from his web-site.

Having said that, the world will be a less entertaining place if the Chris Lee's of the world are not around!

[Balance]

Yes, it is wrong for some to ascribe saintliness to Chris Lee, when he is merely human like others. I have yet to hear verified reports of Lee walking from Kapiti to Kapiti Island.

That being said, there are few saints or indeed Messiahs in the financial world. But I nevertheless enjoy his (and other writings) on his website. Just keep your B.S. detector up as you would with any other financial journo or commentator.

How dare you question his financial sainthood?

He is the champion of the downtrodden and if he gets anything wrong, it's always someone's else fault.

I throw my Japanese slipper at him.

[K1W1G0LD]

How dare you question his financial sainthood?

He is the champion of the downtrodden and if he gets anything wrong, it's always someone's else fault.

I throw my Japanese slipper at him.

There,there Balance calm down....................we've already established that Mr lee is'nt the villain here , its S&P.......................any objections??

[POSSUM THE CAT]

KIWIGOLD I would go with S&Ps opinion over Cris Lee's opinion any time

[percy]

KIWIGOLD I would go with S&Ps opinion over Cris Lee's opinion any time

No surprises there.!!!!!!
Yeah right.!! lol.

[andysh]

S&P at it again (Kiwibank this time): http://www.stuff.co.nz/business/industries/8702306/S-P-puts-NZ-Post-Kiwibank-on-negative-outlook

[CJ]

"Possible within the next 2 years"!!! Jeez, talk about putting people on edge a bit for an extended period of time S&P!Negative watch means a risk of reduce rating sometime within the next two years - ie. I am pretty sure this is standard for a negative watch the world over.

Interesting they they think the Ozzie banks will prop up their NZ subsidiaries if the sh!t hits the fan but the government wont prop up Kiwibank. Ozzie banks would cut and run, unlike the government.

[Hoop]

"Possible within the next 2 years"!!! Jeez, talk about putting people on edge a bit for an extended period of time S&P!
As CJ states..a negative watch is,,,

I don't know what all the fuss is about putting blame on the S&P...From my viewpoint these S&P Moodys Fitch negatives are warnings that allows the relevant Sectors plenty of time to formulate contingency plans and other improvements...

There is only one thing worse for the Marketplace than a credit rating bombshell without a warning ... that is the public scoffing of a warning by that sector(s) involved and doing nothing about it.

[CJ]

Hoop the problem is that there is nothing the banks can do to help their situation. They could hold more capital than required or reduce their exposure to property but Heartland has already done/does this.

All that is left then is to determine how correct S&P are that there will be a major property crash in the next two years (unlikely in my view - no growth or slight fall dont count) and if so, who much the banks will be effected. Heartland isnt writing high LVR house loans so will only be impacted by trickle down (if you cant pay your house, you cant pay your car either).

[winner69]

Hoop the problem is that there is nothing the banks can do to help their situation. They could hold more capital than required or reduce their exposure to property but Heartland has already done/does this.

All that is left then is to determine how correct S&P are that there will be a major property crash in the next two years (unlikely in my view - no growth or slight fall dont count) and if so, who much the banks will be effected. Heartland isnt writing high LVR house loans so will only be impacted by trickle down (if you cant pay your house, you cant pay your car either).

or get into trouble with that loan tied to your business ... might be the truck, the tractor or whatever. No doubt most of these loasns have personal guarantees associated with them

[cloggs]

Good to see HNZ is recovering in the meantime. Nothing wrong with stating a position, but I can't believe that S&P still exists after their performance in the years leading up to the GFC. Or that anyone gives them any credibility. I have some shares in IMF(ASX) who are financing a class action against them in Australia.

[Balance]

Good to see HNZ is recovering in the meantime. Nothing wrong with stating a position, but I can't believe that S&P still exists after their performance in the years leading up to the GFC. Or that anyone gives them any credibility. I have some shares in IMF(ASX) who are financing a class action against them in Australia.



They have been saved so far by their extensive use of disclaimers but the day of reckoning is coming :

http://www.huffingtonpost.com/2013/02/05/sp-lawsuit_n_2621561.html

US$5 billion in fines should just about make them wake up to the corruption and fraud so prevalent in their ratings.

I throw my Australian made sandals at them.

[Xerof]

Balance, stop being a wuss, bugger your japanese slippers and australian sandals, toss your dutch wooden clogs first, then clip them round the ears with your north korean jackboots

[Balance]

Balance, stop being a wuss, bugger your japanese slippers and australian sandals, toss your dutch wooden clogs first, then clip them round the ears with your north korean jackboots

Ok, I throw my well worn mountain climbing boots at them then.

http://www.youtube.com/watch?v=VFX-dKpcDz8

[Hoop]

Hoop the problem is that there is nothing the banks can do to help their situation. They could hold more capital than required or reduce their exposure to property but Heartland has already done/does this.

All that is left then is to determine how correct S&P are that there will be a major property crash in the next two years (unlikely in my view - no growth or slight fall dont count) and if so, who much the banks will be effected. Heartland isnt writing high LVR house loans so will only be impacted by trickle down (if you cant pay your house, you cant pay your car either).

They should be trying harder...going from BBB- stable to negative does not sound like an improvement to me.....next step down is guilt-edged junk status.

Disc hold HNZ

http://i458.photobucket.com/albums/qq306/Hoop_1/NZbankcreditratingsMarch2013.png (http://s458.photobucket.com/user/Hoop_1/media/NZbankcreditratingsMarch2013.png.html)

[percy]

I would presume that

a) offloading the non core property assets
b) demonstrating profit increases

would allay the concerns of S&P somewhat...

They are working hard on both.
Their record of achieving what they set out to do,means S&P will be satisfied, and customers,staff and shareholders will be proud to be a part of Heartland.

[mouse]

Percy. Did Heartland go up to close at 80 cents today due to a Percy Intervention in the market?
If so, many thanks.
But what can Heartland do?, (except to deny any rumours of spare capital distribution?)
We can all sleep a bit sounder tonight, even Percy with no alarm cat.

[CJ]

I would presume that

a) offloading the non core property assets
b) demonstrating profit increases

would allay the concerns of S&P somewhat...With them on negative watch, they are atleast 3 announcements away from an increase one would think as they would have to go through stable, positive watch, then finally upgrade.

Didn't quite get low enough for me to top up (though I am trying to de-leverage at the moment)

[percy]

Percy. Did Heartland go up to close at 80 cents today due to a Percy Intervention in the market?
If so, many thanks.
But what can Heartland do?, (except to deny any rumours of spare capital distribution?)
We can all sleep a bit sounder tonight, even Percy with no alarm cat.

Yes the much loved cat is greatly missed.
What Heartland can do is keep up with what they are already doing.
They are clear in what they want to do,and they do it.
Coming back from a very successful selling trip to lovely Dunedin I past HEARTLAND HOUSE in downtown Ashburton today.
I thought the one in Tauranga looked impressive,but the one in Ashburton was outstanding.!!
A very bold statement.I look forward to their expansion into Timaru.!!!!
The SP.Well anyone who read Heartland's reply,and the the Cameron Bargie article I referred to in an earlier post,would have realised just how far Heartland Bank have come,and how positive the outlook is for NZ over the next three years.I am pleased I backed myself and brought more.

[Minerbarejet]

Which means somewhere in Christchurch, Percy is quietly smoking on his pipe, feet on the ottoman and single malt slowly unwinding over ice, contemplating his good fortune at picking up more of Heartland at a 5% discount.
At this hour of the morning? :eek2:

[Minerbarejet]

I should have said "last night" and used past tense. :-)
just leg pulling- liked the quote - especially the bit about the single malt.
was about to make a "term deposit "with Heartland yesterday and they suddenly shot up 3 cents- dang.:(

[percy]

just leg pulling- liked the quote - especially the bit about the single malt.
was about to make a "term deposit "with Heartland yesterday and they suddenly shot up 3 cents- dang.:(

Sounds pretty good to me too.!!!!
Bit surprised the SP did not stay down longer.

[Balance]

Interesting the market has shrugged off the S&P negative watch so quickly.

Heartland dropped from 80c to 76c in two days, and has climbed back up to 80c over the following two days. It would seem the market doesn't take the S&P comments very seriously, or perhaps more accurately, has assessed the risk and believes S&P's comments to be overstated.

It may have simply triggered some nervous nellies into performing an act of IQ arbitrage with bolder and more confident investors.

Which means somewhere in Christchurch, Percy is quietly smoking on his pipe, feet on the ottoman and single malt slowly unwinding over ice, contemplating his good fortune at picking up more of Heartland at a 5% discount.

Anyone reading the S&P report on HNZ would rapidly come to the conclusion that S&P now shoots before asking question.

Don't under-estimate the impact that the US case against S&P has on the psyche of the fraudsters in there - issuing AA to issues which collapsed without so much as a headwind!

Excerpts from articles on the litigation against the rating agency :

"A lead S&P analyst on the deal, according to the plaintiffs, said in an email to his boss that the default rates the agency was using for asset-backed securities were guesswork. "From looking at the numbers it is obvious that we have just stuck our preverbal (sic) finger in the air," the analyst wrote."

"Of course, S&P is knee-deep in the Justice Department’s civil fraud suit in California federal court, which builds upon evidence and legal theories laid out in the Cheyne and Rhinebridge CDO cases. The agency moved to dismiss the Justice Department’s suit last week. S&P is also facing deceptive trade practices claims by more than a dozen state attorneys general; in the most recent development in the AG litigation, a federal judge in Connecticut rebuffed the rating agency’s attempt to remove Connecticut’s 3-year-old case from state court, where it has already survived a dismissal motion. (The Connecticut AG has brought an illegal trade practices suit against Moody’s as well.)"

I throw my friend's moldy shoes at them.

[Banksie]

I throw my friend's moldy shoes at them.

I think you will have to be renamed to the "Barefoot Trader" ;)

[macduffy]

A Bill recently introduced to the US Congress, if passed into law, would make S&P and the other rating agencies irrelevant - at least as far as the "Too Big to Fail Banks" are concerned.

From Mauldin Economics:

The broad strokes of the TBFA Act:
â—�Mandates a flat 15 percent capital requirement for any institution with more than $500 billion in assets
â—�Does not rely on ratings agency grades
â—�Removes off-balance-sheet assets and liabilities as different classes — they are treated as if they are on the balance sheet
â—�Requires derivatives positions to be included in a bank’s consolidated assets
â—�Requires that the capital cushion a bank holds be liquid
(Note that these five elements are much stricter than Basel III regulatory requirements. Brown-Vitter renders it irrelevant to U.S. banks).

OK, I know Heartland's not quite in that league!

:cool:

[hilskin]

Just received a letter in the post from Heartland Bank, an exclusive offer for shareholders for term deposits.
5 months 4.50% and 15 months 4.75%.
Unfortunately I have just pumped the remainder of my cash into Chorus (long term outlook) so can't help out but if any of you shareholders have any cash you are looking for a home why not put it somewhere we can all benefit. :-)

[Snow Leopard]

Just received a letter in the post from Heartland Bank, an exclusive offer for shareholders for term deposits.
5 months 4.50% and 15 months 4.75%.
Unfortunately I have just pumped the remainder of my cash into Chorus (long term outlook) so can't help out but if any of you shareholders have any cash you are looking for a home why not put it somewhere we can all benefit. :-)

I will assume that the 4.75% is per annum which at a share price of $0.80 equates to a fully imputed dividend of 2.736c per annum.

Best Wishes
Paper Tiger

[mouse]

I will assume that the 4.75% is per annum which at a share price of $0.80 equates to a fully imputed dividend of 2.736c per annum.

Best Wishes
Paper Tiger
Heartland needs to have long term deposits to balance the shorter term ones. We were discussing $100 million bonds maturing. We should, as shareholders, get an opportunity soon for say a five year bond. No idea of the interest rates they will offer.

[janner]

Heartland needs to have long term deposits to balance the shorter term ones. We were discussing $100 million bonds maturing. We should, as shareholders, get an opportunity soon for say a five year bond. No idea of the interest rates they will offer.

Neither do they at present mouse .. The times they are a' changing..

[Baaarney]

Warning of "low-ball' offers mailed to shareholders ... seems to be a pro-active warning rather than a response to a specific threat

"Heartland New Zealand Limited (HNZ) is aware that new unsolicited offers are being made to shareholders of listed companies to buy their shares for much less than market value. The Board of HNZ is concerned to ensure that you are not misled by these unsolicited “low ball” offers."

https://www.nzx.com/companies/HNZ/announcements/236659

[CJ]

Warning of "low-ball' offers mailed to shareholders ... seems to be a pro-active warning rather than a response to a specific threat I assume they have received a request for their shareholder database which by law they have to provide.

Easy target since some people would have inherited these shares from a previous investment so not know much about them. Not an issue unless you are dumb enough to accept.

[K1W1G0LD]

Announcement re non-core property assets due this week, credit to Percy!

[iceman]

Announcement re non-core property assets due this week, credit to Percy!

It would be nice if they have disposed of it on satisfactory terms. It would remove an issue from their balance sheet that many investors probably find negative. A successful disposal should put a line under the share price.

[winner69]

I assume they have received a request for their shareholder database which by law they have to provide.

Easy target since some people would have inherited these shares from a previous investment so not know much about them. Not an issue unless you are dumb enough to accept.

Was this the offer for a special term deposit that shareholders got the other day ....some lowball offer

[iceman]

Was this the offer for a special term deposit that shareholders got the other day ....some lowball offer

This appears to be a low ball share offer, albeit the statement does not explicitly state they are aware of low ball offers for HNZ ! This is what Heartland says today :


27 May 2013
Dear Shareholder,
WARNING – NEW “LOW BALL” OFFERS IN THE MARKET
Heartland New Zealand Limited (HNZ) is aware that new unsolicited offers are being made to shareholders of
listed companies to buy their shares for much less than market value. The Board of HNZ is concerned to ensure
that you are not misled by these unsolicited “low ball” offers.

[hilskin]

Was this the offer for a special term deposit that shareholders got the other day ....some lowball offer

:) nice one winner69, LOL

[janner]

Announcement re non-core property assets due this week, credit to Percy!

Keep that new Kitchen on the horizon K1W1GOLD... Retain as many shares as possible..

If the worst comes to the worst.. No speaky times.. :-))

Have an early Sh** Shave.. Shampoo and Shower.. Go to bed .. Leaving... And this is the critical part..

One ROSE HEAD on her pillow..

She will turn to putty .. Absolute PUTTY.. Heheheheh.

[percy]

Great result for 9months.
Non-core property announcement will now be next month.
NPAT of $17.3 for 9 months is on track.
Bond Repayment; Will be repaid from existing cash resources.This will result in a huge saving.
Operating expense ratio much improved.
All proceeding according to plan.Well done Heartland.

[percy]

Interesting the market appears to have reactied without the same enthusiasm, all be it on low volume and in the midst of a generally weak equity market environment. Thoughts? Do you put it down to the latter two points or is there something in the announcement that is not so positive? Cheers.

May be because the non-core property announcement is next month,not this month.
Other wise I can only tell you that I was very pleased with the announcement..

[RTM]

Perhaps the uncertainty created by these couple of paragraphs needs to be resolved,

"Impairments
Impaired asset expense for the Bank was $7.9m for the Current Reporting Period, up from $6.1m for the Previous Corresponding Reporting Period. The higher impairment expense came from the non-core property book.

NON-CORE PROPERTY UPDATE
As previously announced, a review of the strategy of managing the non-core property book is being undertaken for the purpose of testing the current exit strategy (being a managed exit over a five year period beginning in January 2011) against alternatives with respect to value maximisation. It is currently anticipated that the outcome of this review will be determined and announced in June 2013. If the outcome of that review is to change strategy, this may impact currently anticipated full year financial results for the Bank and for HNZ."

[Xerof]

Loan book decay is faster than writing of new business....no-ones borrowing, or they don't like the credit risk

deposit taking strong, but will be a loss maker on the books...this is the price one pays for liquidity buffers....repaying the bonds is a good outcome from this, and IMO is the right outcome

NCPA comment....I read this as 'is taking a hit now, and a further writedown in this years accounts better than having this drag out another two n a half years, with no certainty that it will prove a better outcome?'

you will find out in June

a fair result so far, but not setting the world on fire, are they

[biker]

The question is, how much will that 'hit now' affect the share price.

[RTM]

I could also read it as not exiting those assets...and that's how I did until saw Forex's comment. But maybe I'm way off track there.

[Xerof]

I think the last sentence of that paragraph suggests they are debating an early liquidation of those assets.

I was a bit harsh with my loan book decay observation....the decline was in those areas they want to decline, namely NCPA and house mortgages, so core business saw a small increase

[RTM]

This one ?

"If the outcome of that review is to change strategy, this may impact currently anticipated full year financial results for the Bank and for HNZ." "

Wouldn't either course of action potentially impact the full year result ?

Thanks for the clarification re the loan book.

[percy]

I think the last sentence of that paragraph suggests they are debating an early liquidation of those assets.

I was a bit harsh with my loan book decay observation....the decline was in those areas they want to decline, namely NCPA and house mortgages, so core business saw a small increase

Too harsh by far>>>!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Increasing where they want.
Non-core property.A hit now would clear the air.Once we are past/clear of the non-core property assets I think we will see the SP react positively.

[SCOTTY]

Well, I liked the result enough to buy some more today :-)

[Xerof]

Wouldn't either course of action potentially impact the full year result ?

yes, but to varying degrees. There is clearly a trade-off being assessed at the moment, between a bird in the hand (someone has made them an offer), and two in the bush (should we hold off and see if things improve)

now, now percy, don't exaggerate, core only grew by 53.7m, a growth rate of ~2.6%

Not saying thats a bad thing, just keeping it in perspective, and I agree with you, cleared decks will underpin the share price

[percy]

Well, I liked the result enough to buy some more today :-)

You are naughty,but I like you.!! lol.
Positive action will be well rewarded.!

[percy]

yes, but to varying degrees. There is clearly a trade-off being assessed at the moment, between a bird in the hand (someone has made them an offer), and two in the bush (should we hold off and see if things improve)

now, now percy, don't exaggerate, core only grew by 53.7m, a growth rate of ~2.6%

Not saying thats a bad thing, just keeping it in perspective, and I agree with you, cleared decks will underpin the share price

Growth [modest] coupled will savings on operating costs and lower borrowing [marac bonds] costs will certainly help the bottom line.

[winner69]

http://www.interest.co.nz/business/64653/nissan-establish-its-own-new-zealand-financial-services-company

Lost biz for heartland the story says

Jeff not responding to the journos ....seems to be a habit of his

Wonder how much involved?

[winner69]

Didn't read it properly .....reads as if heartland lost 2 bits of biz .....Suzuki and Nissan


Maybe wasn't profitable for them ....but obviously UFC thought the Suzuki business was

[Master98]

Didn't read it properly .....reads as if heartland lost 2 bits of biz .....Suzuki and Nissan


Maybe wasn't profitable for them ....but obviously UFC thought the Suzuki business was

hopefully it will not be domino effect.

[percy]

Didn't read it properly .....reads as if heartland lost 2 bits of biz .....Suzuki and Nissan


Maybe wasn't profitable for them ....but obviously UFC thought the Suzuki business was

Part of Marac's core business.So will have an impact.Both Mazda and Suzuki would be sound important accounts.

[mouse]

Part of Marac's core business.So will have an impact.Both Mazda and Suzuki would be sound important accounts.

It could be that both vehicle companies wanted to lower their finance rates to buyers to give an incentive to purchase a new Mazda etc. Or even a used one! Plus there must be lots of cash sloshing around in Japan looking for a home. It will have an impact, but so will paying off the $100 million bond. They could end up neutral.
Cash is to be made in financing the contractors equipment for the Christchurch re-build. Heartland could have more requests for cash than they can deal with. We are looking at a finance company that has been redecorated and converted to a Bank. (But is still a finance company!).

[Joshuatree]

Suzuki offering cars @ 0% too atm.

[The Grinch]

Was just browsing through RBNZ's latest Financial Stability report (May 2013). Is littered with warnings re potential instability resulting from house price rises and how it's effecting the banks... HNZ's move out of mortgages keeps proving the smart thing to do (and brave not following the herd).

Also notes that kiwis credit growth is starting to creep back up there... trust HNZ is getting some of that. However does mention concern about growth of debt within the agricultural sector amongst those already operating on high debt levels :( particularly in the dairy sector. Although it does say that amongst the 8 banks the asset quality of agriculture assets has improved over the last two years. Link below... Had a bit of trouble trying to insert the graphs??? insight would be appreciated.
http://www.rbnz.govt.nz/finstab/fsreport/fsr_may13.pdf

[The Grinch]

45594560

Testing.....

[pierre]

Joshuatree - there are no free lunches from the motor industry. 0% finance is just a way of discounting without bastardising the retail price.

All importers of Japanese vehicles are currently flush with extra margin gained from the stronger NZD vs JPY. It's moved from 65 to 85 over the past 4-5 months which translates into plenty of dosh to throw at the market one way or another. If you're buying a new car now's the time to negotiate hard - though you can expect a bit of downward pressure on the value of your trade too.

[winner69]

Percy - read Chris lee this week. He agrees with you, so much so if I didn't know better I would think you are mr Warrington himself

[percy]

Percy - read Chris lee this week. He agrees with you, so much so if I didn't know better I would think you are mr Warrington himself

No I am not he,but like him, and Chris I own HNZ shares.
Wise heads together?

[Joshuatree]

Agree Pierre. Still a good deal for buyers. Have never bought or leased a new car myself and dont intend to as im not in situ to claim writedowns on it for one. Less/ no % margin for Heartland/ banks in no int loans but i guess banks are playing the exchange rate too..

[iceman]

HNZ taking the RECL assets in house and accelerating their disposal and writing off $18m up front. Now expecting full year pre-tax and pre write off profit of $24m and forecasting a healthy NPAT of $ 34-37m for the year ending 30 June 2014.
Also proposing an on market share buyback. Good to get rid of these loans/properties and hopefully all this will lead to a firmer SP

[Minerbarejet]

seems to be getting that so far

[Xerof]

HNZ taking the RECL assets in house and accelerating their disposal and writing off $18m up front. Now expecting full year pre-tax and pre write off profit of $24m and forecasting a healthy NPAT of $ 34-37m for the year ending 30 June 2014.
Also proposing an on market share buyback. Good to get rid of these loans/properties and hopefully all this will lead to a firmer SP

Wrestling control out of Cur's clutches is a great move...the penny has finally dropped.

my read of the writedown is that it is perhaps quite aggressive, and some will be recovered next year....standard practise when you are clearing the decks

[Balance]

Will be one of the cheapest growth stock in the Australasian finance sector if they achieve 2014 forecast.

$320m market cap = PE of 8.6x to 9.4x

[iceman]

Mr Market appears to like it !

[Joshuatree]

Great stuff ; all we need now is a great buy up at the FieldDays.Onwards and Upwards.

[Balance]

Mr Market appears to like it !

The Aussie banks do not have that kind of profit growth profile.

I expect funds to switch some exposure from Aussie banks to HNZ now that the last of Dodgie Porgie's deals are out of HNZ.

RECL is such a rip-off as per usual PGC's deals - Get $11m upfront from HNZ, underwrite $30m to be paid out in 7 years' time etc.

[Balance]

Funny how quiet Snoopy has been.

He is still waiting for HNZ's banking license?

Sorry, Snoopy, just pulling your leg.

Thanks for engaging us all in the robust debate on HNZ - markets desperately need individuals like you with your robust analysis and healthy skepticism. Sincerely meant.

[andysh]

Will be one of the cheapest growth stock in the Australasian finance sector if they achieve 2014 forecast.

$320m market cap = PE of 8.6x to 9.4x

What would you say is a realistic PE ratio for HNZ?

[Balance]

What would you say is a realistic PE ratio for HNZ?

Growth profile so PE of at least 12.

[SCOTTY]

Growth profile so PE of at least 12.

On $34 - $37m = $1.04 to $1.14. I like your thinking Balance :)

[mouse]

On the way up again. May even hit $1.00 by the end of this year. Brilliant situation.

[percy]

And Percy 'the fanatic" is forecasting over $30mil for year ended 30/6/2014.

Posted 13/05/2013.
Not fanatic enough.!!!! Today's announcement $34 -$37mil for year ended 30/6/2014.
Good on you HNZ.

[percy]

Wrestling control out of Cur's clutches is a great move...the penny has finally dropped.

my read of the writedown is that it is perhaps quite aggressive, and some will be recovered next year....standard practise when you are clearing the decks

As always I agree with you.!!!!

[percy]

Had a most enjoyable trip down to Ashburton this morning.The mountains looked wonderful,beautiful day.The highlight off course was looking at Heartland House, home of Heartland Bank Ashburton.What I did note was the use of bank in all of Heartland's signage.Heartland Bank appeared in all signage.

[percy]

Champagne's on Percy! Well done, kickin' a$$ and taking names on this one.

Well Sparky we did the research and we are now enjoying the benefits.
Your research was brilliant.
Heartland directors and management have done what they said they would do.Nothing fancy,just clear direction and hard work.

[RTM]

And I'd like to offer thanks to you all as well....although I only became convinced around 77.
Great discussions on this forum, much appreciated.

What's next ?:p

Cheers, RTM

[pierre]

Sincere thanks from me too. I purchased in September and November at average of 67. Currently sitting on a nice 25% gain plus a couple of divvies. Looking forward to watching HNZ continue its upward momentum over coming months.

Thanks to all at Heartland for their efforts and to contributors to this forum - especially Percy for his enthusiastic and well-founded advocacy for HNZ.

[janner]

Yes .. It was good of percy to stand tall on this one.. convincing Sparky et al to join.. belatedly in many cases..

Do not worry .. There is still plenty of upside to come for them..

Kudo's must also go to those that hung in there from the PGC fiasco.. Thus holding the price up when many were nay saying.. ..

Disc.. Veeeeery happy holder.



Sincere thanks from me too. I purchased in September and November at average of 67. Currently sitting on a nice 25% gain plus a couple of divvies. Looking forward to watching HNZ continue its upward momentum over coming months.

Thanks to all at Heartland for their efforts and to contributors to this forum - especially Percy for his enthusiastic and well-founded advocacy for HNZ.

[Lizard]

Looks good. My valuation moved up to 95cps with that forecast - and I would expect that to rise further at half year.

[CJ]

Looks good. My valuation moved up to 95cps with that forecast - and I would expect that to rise further at half year.Out of interest is that a 'current value', a '1 year target' or ...

[Snow Leopard]

Looks good. My valuation moved up to 95cps with that forecast - and I would expect that to rise further at half year.

I now have current value at $0.898 and one year at $0.997 based on fairly conservative growth figures.

Best Wishes

[janner]

Averages out at .9475 PT.. so you both agree.. conservatively ..




I now have current value at $0.898 and one year at $0.997 based on fairly conservative growth figures.

Best Wishes

[janner]

HNZ at present Stockness Monster time 5 05 pm... is... 0.85.. Ho Hum.. :-))) Enjoy... :-))

[percy]

I see current value at 88c for now, and $1.41 for the coming year, assuming eps of 6.4c for fy2013

As per the announcement earnings [on going] of approx. $25 mil,this year, which is your 6.4cents.
Then next year either 8.75cents [$34mil] or 9.5cents [$37mil].
That is earnings growth of 36% [$34mil] or 48% [$37mi].
Either 36% or 48% EPS growth and paying a divie means your 14.8 PE looks about right to me.So I agree with your $1.41.as I think they will achieve their $37mil goal.

[iceman]

As per the announcement earnings [on going] of approx. $25 mil,this year, which is your 6.4cents.
Then next year either 8.75cents [$34mil] or 9.5cents [$37mil].
That is earnings growth of 36% [$34mil] or 48% [$37mi].
Either 36% or 48% EPS growth and paying a divie means your 14.8 PE looks about right to me.So I agree with your $1.41.as I think they will achieve their $37mil goal.

And also the share buyback which could make this even more favourable although there is no detail yet the buyback

[percy]

And also the share buyback which could make this even more favourable although there is no detail yet the buyback

Yes offcourse,I forgot about that.
$1.50 target price then.????? !!!!!

[Snow Leopard]

As per the announcement earnings [on going] of approx. $25 mil,this year, which is your 6.4cents.
Then next year either 8.75cents [$34mil] or 9.5cents [$37mil].
That is earnings growth of 36% [$34mil] or 48% [$37mi].
Either 36% or 48% EPS growth and paying a divie means your 14.8 PE looks about right to me.So I agree with your $1.41.as I think they will achieve their $37mil goal.

Being a gentle peace loving tiger I don't wish to cause unrest but...

Coming up with a pair of valuations based purely upon two sets of results is pretty poor modeling, you need to make assumptions about future years.

Going with the tiger defensive model and normalised profits of 2013: 6.4cps and 2014 9.0cps then if I assume a 15% growth rate after that I can get $1.40 for next year but that gives a current value of $1.20.
[My figures of $0.9 and $1.00 are based on 10% growth tapering off over subsequent years]

Best Wishes
Paper Tiger

[percy]

Being a gentle peace loving tiger I don't wish to cause unrest but...

Coming up with a pair of valuations based purely upon two sets of results is pretty poor modeling, you need to make assumptions about future years.

Going with the tiger defensive model and normalised profits of 2013: 6.4cps and 2014 9.0cps then if I assume a 15% growth rate after that I can get $1.40 for next year but that gives a current value of $1.20.
[My figures of $0.9 and $1.00 are based on 10% growth tapering off over subsequent years]

Best Wishes
Paper Tiger

Yes I would agree with you that current value is $1.20.!!! lol.

[janner]

Yes I would agree with you that current value is $1.20.!!! lol.

Nope .. not on my time table Percy.. To exuberant !!.. 0.95 for now will suffice..

[percy]

Nope .. not on my time table Percy.. To exuberant !!.. 0.95 for now will suffice..

Maybe.???
Future growth rate.?
The $34 to $37mil is either 13% or 23% higher than the $30mil I projected.So I am no good on future projections.
15% pa growth rate maybe too low.HNZ are coming from a small base and may grow at 18% to 20% over the next few years.Could be 25%.?
Trust Bank showed us how quickly a locally owned and operated bank can grow.Heartland are gaining momentum.The branch I looked at in Ashburton today is a bold statement.On the front window it showed Ashburton's history together with Heartland's history.Local pride.I was impressed with Tauranga branch too.We have recently seen UDC post a huge profit increase,so the business is there.
New Zealanders will be proud to support NZ's only listed bank.
Heartland have stated they intend to grow.Timaru and Invercargill are only two I can remember. Timaru they will do well.

[janner]

Maybe.???
Future growth rate.?
The $34 to $37mil is either 13% or 23% higher than the $30mil I projected.So I am no good on future projections.
15% pa growth rate maybe too low.HNZ are coming from a small base and may grow at 18% to 20% over the next few years.Could be 25%.?
Trust Bank showed us how quickly a locally owned and operated bank can grow.Heartland are gaining momentum.The branch I looked at in Ashburton today is a bold statement.On the front window it showed Ashburton's history together with Heartland's history.Local pride.I was impressed with Tauranga branch too.We have recently seen UDC post a huge profit increase,so the business is there.
New Zealanders will be proud to support NZ's only listed bank.
Heartland have stated they intend to grow.Timaru and Invercargill are only two I can remember. Timaru they will do well.

Not into disagreeing or agreeing with your numbers Percy..

Do think that you have picked on the angle that HNZ ( rightly ) will be playing..

My first bank account on arrival ( 1959 ) was opened up with the Auckland Savings Bank.. I still have that account..

I opened it with them because I wanted to be an Aucklander. A Kiwi..

So many people today have had enough of foreign take overs..

HNZ should now be giving my Grand children money boxes that the OLD ASB used to give out..

Building a saving habit and a pride in a NEW ZEALAND BANK..

Now stopping saluting the flag and wiping the tears from my eye's..

I still remain convinced that HNZ can be NZ's.... First Bank..

[Minerbarejet]

Winnie will love that.

[mouse]

We have to remember the rateing downgrade threatened by S&P. Be careful, but present share price is very good.

[janner]

Winnie will love that.


No he will not !!.. It has ownership by those that will put their own money into it..

Not just those special people with cards and grey hair.. Others.. Even.. Dare I say it .. PR people and non PR people..

[Minerbarejet]

hi ham varning hu - ven hit gets to vun tollar und vivty hi vil pe zellink hymn





:)

[janner]

We have to remember the rateing downgrade threatened by S&P. Be careful, but present share price is very good.

Mouse.. The S&P notice was a warning.. The TSB and HNZ were mentioned in that warning..
It had very little relevance to the TSB and HNZ workings..

So !!.. Grab that wonderful piece of Cheddar presented to you today.. And scurry back to your warm little nest..

The Gorganzola will come later.. .

[Minerbarejet]

by that do you mean the trap will be sprung?

[Snoopy]

Funny how quiet Snoopy has been.

He is still waiting for HNZ's banking license?

Sorry, Snoopy, just pulling your leg.

Thanks for engaging us all in the robust debate on HNZ - markets desperately need individuals like you with your robust analysis and healthy skepticism. Sincerely meant.

Like I said before Balance, good luck to you investors who got in early. To my mind the most important information going forwards is the quality of the loan exposure and that will not be released until annual result time. If all goes well I will have missed out on a good capital gain here. But what I want to invest in is a boring bank. HNZ is not confirmed as boring enough for me yet!

SNOOPY

[iceman]

I think HNZs share price is dependent more on factors within its control like disposal of non core property, than external factors like S&P ratings that are seen as somewhat puzzling. Clearly the market seems to care more about what mgmt are doing.

Agree totally with that STC. Management appears to be very focused and are achieving what they've set out to do. Gives great confidence for investors and much more important that misguided ratings that seem to have little relevance to HNZ

[Snow Leopard]

Like I said before Balance, good luck to you investors who got in early. To my mind the most important information going forwards is the quality of the loan exposure and that will not be released until annual result time. If all goes well I will have missed out on a good capital gain here. But what I want to invest in is a boring bank. HNZ is not confirmed as boring enough for me yet!

SNOOPY

I remain baffled by these statements of yours Snoopy.

In last years annual report and also this years half year report I consider that there is plenty of information on loan quality, impairments and write-offs and that one could draw an informed conclusion from that information.

Best Wishes
Paper Tiger

[Snoopy]

I remain baffled by these statements of yours Snoopy.

In last years annual report and also this years half year report I consider that there is plenty of information on loan quality, impairments and write-offs and that one could draw an informed conclusion from that information.

Best Wishes
Paper Tiger

The information I am after PT, is an update on that contained in HNZ annual report Note 32c

"32 Credit risk exposure (continued)
(c) Maximum exposure to credit risk by internal risk grading"

This information is not presented in the half year report. Furthermore the nine categories of loan identified in 32c

Grade 1 - Very Strong, Grade 2 - Strong, Grade 3 - Sound , Grade 4 - Adequate, Grade 5 - Acceptable, Grade 6 - Monitor, Grade 7 - Substandard, Grade 8 - Doubtful, Grade 9 - At risk of loss

are not 'holding pens' for HNZ loans. Those loans can move between categories. I prefer to see where those loans have moved to when the FY2013 report comes out.

SNOOPY

[Snow Leopard]

What with a little bit of buying here and with recent share price movements I find that HNZ is now my single biggest NZX holding at 21.73% having overtaken RYM at a mere 20.06%.

Best Wishes
Paper Tiger

[Marilyn Munroe]

When I try to work out the interplay between PGW and Heartland over MARAC's property portfolio my brain starts to hurt.

This commentator does not seem to be impressed;

http://www.interest.co.nz/property/64770/opinion-heartland-banks-credibility-goes-line-george-kerr-takes-pound-property-flesh

Boop boop de do

Marilyn

[percy]

When I try to work out the interplay between PGW and Heartland over MARAC's property portfolio my brain starts to hurt.

This commentator does not seem to be impressed;

http://www.interest.co.nz/property/64770/opinion-heartland-banks-credibility-goes-line-george-kerr-takes-pound-property-flesh

Boop boop de do

Marilyn

Everyone's brain started to hurt when they tried to work out the relationship between Heartland and PGC over the non-core property deal.
This held back HNZ as people had concerns as to the true value of the properties,and the deal itself.
The announcement cleared the air.The $24mil hit is a lot less than I thought it would be.HNZ's accounts and profits from now on will be cleaner and easier to understand.
Also the end of the relationship with G.Kerr is seen as very positive.
Shareholders and analysts are impressed.

[percy]

What with a little bit of buying here and with recent share price movements I find that HNZ is now my single biggest NZX holding at 21.73% having overtaken RYM at a mere 20.06%.

Best Wishes
Paper Tiger

Would appear to me your NZX portfolio is "well positioned."
Would expect your HNZ to move over the 25% very quickly.!!!!!

[percy]

Our holding [wife and mine] is now 15% of our total holdings.The recent purchase and the increase in SP has taken it from 12%,which I thought was enough in one company.
As I am very comfortable with HNZ I will let it run.So I have no intention of buying or selling any shares.
Am looking forward to our HNZ hitting 25% of our total holding by Xmas.Not sure whether it will be this Xmas or next year's? lol.

[kizame]

Ok I am rather more aggressive in my aproach HNZ 48.93% DIL 43.97 SNK 7.11% and gives me the overall % returns I want.
Lots will disagree.

[Minerbarejet]

perhaps I might be permitted to point out that your HNZ going from 15 to 25 per cent excludes the other 85 percent from making any advances or could be achieved by losses in the other 85 per cent and HNZ going nowhere- however, having said that I agree with now being more comfortable with HNZ thanks to your inspired commentary on this thread.
Merry Christmas - noel feeling
Majorbarejet

[Balance]

Everyone's brain started to hurt when they tried to work out the relationship between Heartland and PGC over the non-core property deal.
This held back HNZ as people had concerns as to the true value of the properties,and the deal itself.
The announcement cleared the air.The $24mil hit is a lot less than I thought it would be.HNZ's accounts and profits from now on will be cleaner and easier to understand.
Also the end of the relationship with G.Kerr is seen as very positive.
Shareholders and analysts are impressed.

There is no doubt that G Kerr tried to stitch up HNZ with as many Georgie Porkie deals as possible.

I do believe however that the unwinding of RECL represents the final break between HNZ and that shyster.

What it costs HNZ is nothing compared to the credibility and benefits that HNZ obtains from the total severing of links with that plum-in-the-mouth loser.

But life can be a funny thing - Shyster Georgie sold out of HNZ at 52 cents last year. The word'Heartland' must strike at his heart everytime he sees it or reads it?

[zs_cecil]

Just pop some RAK into your portfolio, HNZ will take up 25% in no time!

Agree. I have RAK in one of the five stocks that I picked in the contest. It is seriously pulling my ranking down. It is lucky though I don't own it in real.

[biker]

This commentator does not seem to be impressed;

http://www.interest.co.nz/property/64770/opinion-heartland-banks-credibility-goes-line-george-kerr-takes-pound-property-flesh

Marilyn

The commentator seemed to have a rather churlish 'chip on his shoulder' approach. I can't really see what he is complaining about.
HNZ clearly said earlier that if there was a change to how they handled non core assets, it may affect short term profits. There was, and it has l! can't see a problem with that.

[iceman]

Ok I am rather more aggressive in my aproach HNZ 48.93% DIL 43.97 SNK 7.11% and gives me the overall % returns I want.
Lots will disagree.

Wow and I thought I was very aggressive on HNZ with 34% in HNZ and similar in DIL and RYM combined !

Agree with biker about the article on interest.co.nz. While it is a reasonably good summary, the result and decision by HNZ on how they are dealing with it, including the write downs, should not have come as a surprise to reasonably well informed investors/commentators

[Cool Bear]

Ok I am rather more aggressive in my aproach HNZ 48.93% DIL 43.97 SNK 7.11% and gives me the overall % returns I want.
Lots will disagree.
So, there is someone with a higher percentage than my 45%. Had been trying to drop it to below 30% but with the last few days moving a bit to cash (yes, even with HNZ), HNZ is now close to 45% again. But I still sleep well!

[kizame]

So, there is someone with a higher percentage than my 45%. Had been trying to drop it to below 30% but with the last few days moving a bit to cash (yes, even with HNZ), HNZ is now close to 45% again. But I still sleep well!

yep my big disappointment was selling RYM way back,otherwise am very happy with the way things have gone.

[Snow Leopard]

When I try to work out the interplay between PGW and Heartland over MARAC's property portfolio my brain starts to hurt.

This commentator does not seem to be impressed;

http://www.interest.co.nz/property/64770/opinion-heartland-banks-credibility-goes-line-george-kerr-takes-pound-property-flesh

Boop boop de do

Marilyn

I realise that Mr Vaughan needs to earn his keep but

"Buried deep in a May 28 statement entitled 'Heartland Bank Releases Third Quarter Disclosure Statement' was this sentence; "If the outcome of that (non-core property) review is to change strategy, this may impact currently anticipated full year financial results."

indicates that reading beyond page 1 of anything is a struggle for the poor man.

The useful thing he does imply is that even after all this, a risk of further write-downs beyond the $18m does remain.

However I would suggest that HNZ is being prudent with an up-front write-down and we will just have to see what further amendments, positive or negative, need to be made.

Best Wishes
Paper Tiger

PS I notice Bernard Hickey has commented "nice piece Gareth", I disagree.

[Lizard]

I realise that Mr Vaughan needs to earn his keep but

"Buried deep in a May 28 statement entitled 'Heartland Bank Releases Third Quarter Disclosure Statement' was this sentence; "If the outcome of that (non-core property) review is to change strategy, this may impact currently anticipated full year financial results."

indicates that reading beyond page 1 of anything is a struggle for the poor man.


I had the same reaction. Although I tend to share his suspicions of companies that aren't straight-up, I didn't find the HNZ announcements that obtuse at all. They seemed quite consistent to me.

The only query I had was why PGC still got the whole $11m fee for achieving the destruction of more than $30m value in a shorter time period than initially anticipated (:p)..., but can see how it is probably cheaper in the long run to pay the fee and take control back.

[Balance]

I had the same reaction. Although I tend to share his suspicions of companies that aren't straight-up, I didn't find the HNZ announcements that obtuse at all. They seemed quite consistent to me.

The only query I had was why PGC still got the whole $11m fee for achieving the destruction of more than $30m value in a shorter time period than initially anticipated (:p)..., but can see how it is probably cheaper in the long run to pay the fee and take control back.

The stench of Shyster Kerr and his sucking sidekick, Not so Bright, is lifting finally at last well and truly from this company.

Worth double whatever it costs to get rid of the decaying rotten fish smell.

[percy]

perhaps I might be permitted to point out that your HNZ going from 15 to 25 per cent excludes the other 85 percent from making any advances or could be achieved by losses in the other 85 per cent and HNZ going nowhere-
Majorbarejet


Still laughing at your comment.
My concern is that you could be right.!!!! lol.

[winner69]

The commentator seemed to have a rather churlish 'chip on his shoulder' approach. I can't really see what he is complaining about.
HNZ clearly said earlier that if there was a change to how they handled non core assets, it may affect short term profits. There was, and it has l! can't see a problem with that.

Good question that commentator asks though "what actually are those $130 million of assets" and what do those terms / descriptions of the different classes of assets actually mean - esp the term "extend"

All seems a bit mysterious .....and not very transparent

And don't tell to ask jeff direct .....he doesn't communicate with the likes or me ....and if does refer any queries to his offsiders they don't respond either - not even with the corporate line - 'No comment'

Hard to do your homework when they lock themselves away in an ivory tower

[winner69]

winner - are you seriously telling me that you didn't get a fulsome answer from management? They were nothing but helpful towards me.

Five requests (email) ignored and phone message not responded to

appreciate everybody is busy as sorting out the world but not even a stock standard reply

[winner69]

Sparks - I think I just need to face up to it .... I just don't have the charisma you have or that all engaging charm

Might see if I ask about giving them any money if they are responsive .... like a customer that is .... hope management attitude don't go down to the troops

Good question .... does the top guy even know what a customer looks like

[percy]

Five requests (email) ignored and phone message not responded to

appreciate everybody is busy as sorting out the world but not even a stock standard reply

He must think you are Snoopy.!!! lol.
I have found the chairman Bruce Irvine does return calls, and is very easy to talk to.
Craig Stephen I have found good to talk to.I learnt a great deal talking to him after the presentation he gave.His presentation was excellent.
I have not spoken with Jeff Greenslade.

[Lizard]

Sparks - I think I just need to face up to it .... I just don't have the charisma you have or that all engaging charm


Wow, and people just tell me I just need to change my first name to get a reply from companies :p (gender implications).... I think I hold the record for never getting replies from management.

Then again, the few occasions I have received a reply to an email (and I'm not referring to HNZ here, as I have never emailed them), it has usually been both patronising and misleading. As a result, I have never seen the point of approaching management, nor employed an investment strategy that in any way utilises it.

[percy]

Wow, and people just tell me I just need to change my first name to get a reply from companies :p (gender implications).... I think I hold the record for never getting replies from management.

Then again, the few occasions I have received a reply to an email (and I'm not referring to HNZ here, as I have never emailed them), it has usually been both patronising and misleading. As a result, I have never seen the point of approaching management, nor employed an investment strategy that in any way utilises it.

Think you should watch Judge Judy to learn, it is the question you ask and how you ask it>!!!!????
Best way to learn about a company is to speak to the people who run it.I go to every AGM,presentation,openning of an envelope I can.!!

[winner69]

Sometimes the best place to do 'homework' is Thursday night around the bars.

Follow a group of suits from acompany about 5.30 to their local and park yourself near them. Usually moan about all the crap that's going on ....or gettingbexcited about the next big deal. The Occidental in lamb ton quay seems popular and you often see noisy groups in Pravada

Better than ATMs and pesos Percy ....you get the real oil and not the glossy stuff the company wants you see or hear

[winner69]

And nothing like sitting next to a suit on the Auckland flight who has a wad f people with confidential or commercial sensitive written all over it.

PowerPoint presentations are best ....bigger fonts and easier to read

[percy]

And nothing like sitting next to a suit on the Auckland flight who has a wad f people with confidential or commercial sensitive written all over it.

PowerPoint presentations are best ....bigger fonts and easier to read

Morals ?
You are a very naughty boy.!!!
ps.Drop me a PM should you get any good inside info.
pps.I don't get to mix with the suits in cattle class on Jetstar.

[winner69]

Think you should watch Judge Judy to learn, it is the question you ask and how you ask it>!!!!????
Best way to learn about a company is to speak to the people who run it.I go to every AGM,presentation,openning of an envelope I can.!!

I'm sure lizard is smarter than judge jury

Your favourite afternoon show is it Percy?

Watched it at the airport once with the sound off. We tried to guess if the guy or the gal was guilty by watching judge judys expression .....but the final call came before the end

[percy]

I'm sure lizard is smarter than judge jury

Your favourite afternoon show is it Percy?

Watched it at the airport once with the sound off. We tried to guess if the guy or the gal was guilty by watching judge judys expression .....but the final call came before the end

Watch it.You will learn what questions to ask,and how to ask them.
A very astute judge.
Then try contacting Jeff.!!!!

[winner69]

http://m.youtube.com/#/watch?v=iInvYl05vOY&desktop_uri=%2Fwatch%3Fv%3DiInvYl05vOY


Is this a good example

[winner69]

HEARTLAND BANK NEW ZEALAND'S NEWEST BANK

Sideline advertising at the test tonite

Good stuff ....getting out there big time

That'll help double the size if te business like jeff touted a year r so ago

[winner69]

Hq and marketing guys must have wanted free tickets methinks ...so get an advertising package..

Good lurk eh

[winner69]

Most of the messages they are pushing seem to be aimed at business lending ....get you working capital from us and all that sort of stuff

[percy]

Most of the messages they are pushing seem to be aimed at business lending ....get you working capital from us and all that sort of stuff

Missed them.!!!!!
Great game though.

[winner69]

Missed them.!!!!!
Great game though.


I thought the national anthems were the highlight .... really scrappy game got more interested in who was spending their money on the advertising hoardings

Heartland up there with AIG, Steinlager, Ford and Powerade ..... I look forward to the Superbowl ad next February

[percy]

I thought the national anthems were the highlight .... really scrappy game got more interested in who was spending their money on the advertising hoardings

Heartland up there with AIG, Steinlager, Ford and Powerade ..... I look forward to the Superbowl ad next February


Will miss that ad too as I don't watch the Superbowl.!!!!!!!
Scrappy game?.They were playing the French,what else would you expect? >>>> !!!!!!??????? lol.

[winner69]

I'll find a better one but something like this will appear in the ANNUAL REPORT

[percy]

I'll find a better one but something like this will appear in the ANNUAL REPORT

Thank you.
I must have been either too intent on watching the play,or our 32" TV is not big enough to pick out the ads.
Had I known Heartland would have been advertising I may have brought a 64" TV.!! Then again I most probably did the right thing by buying more HNZ shares than a new TV.!!!! lol.

[Banksie]

Article on how the wrong bank account can cost you money.

http://www.stuff.co.nz/business/money/8782915/The-wrong-account-can-be-costly (http://www.stuff.co.nz/business/money/8782915/The-wrong-account-can-be-costly)

HNZ get a mention for best products in the Online Saver and Full Access Saver categories.

[False Profit]

Would the consensus be that support should be shown around the 77c mark? They've dipped to this level several times over the last couple of months. I can't see them going much lower than that.

[The Truthseeker]

Would the consensus be that support should be shown around the 77c mark? They've dipped to this level several times over the last couple of months. I can't see them going much lower than that.


http://www.interest.co.nz/property/64770/opinion-heartland-banks-credibility-goes-line-george-kerr-takes-pound-property-flesh#comment-form

[percy]

http://www.interest.co.nz/property/64770/opinion-heartland-banks-credibility-goes-line-george-kerr-takes-pound-property-flesh#comment-form

First of all welcome to sharetrader.
Go back a few pages and you will note we have all commented on this article.

[percy]

Would the consensus be that support should be shown around the 77c mark? They've dipped to this level several times over the last couple of months. I can't see them going much lower than that.

No.I think support will come in about the $1.25 mark.!!!!!!!!!!!!!!!!!!!! lol.

[False Profit]

And I thought I was the eternal optimist...

[iceman]

Percy you will be please to know that the now well known runner up of Masterchef is opening up a cafe right next door to Heartland Bank here in Nelson. Should definitely make more people notice it :)

[percy]

Percy you will be please to know that the now well known runner up of Masterchef is opening up a cafe right next door to Heartland Bank here in Nelson. Should definitely make more people notice it :)

I am already looking forward to my next visit to Nelson in April 2014.
The way Heartland's share price is going, and with another dividend I may be able to afford to eat there!!! Saved a bit this year staying in a nice motel at the motor camp [ a lot cheaper than the motels on the street]. Make a bit of a change from the very good fish and chips from Roto street, and the nice Thai in Tahunaui.Where is the Heartland Bank in Nelson?

[Minerbarejet]

Percy you will be please to know that the now well known runner up of Masterchef is opening up a cafe right next door to Heartland Bank here in Nelson. Should definitely make more people notice it :)
"Well thats the banking done lets go for a coffee and a snakk!" Could work!:)

[iceman]

Where is the Heartland Bank in Nelson?

At the bottom of Hardy Street, right behind McDonalds.

[percy]

At the bottom of Hardy Street, right behind McDonalds.

Thanks for that.Must be handy to Smiths City.

[mouse]

Thanks for that.Must be handy to Smiths City.
Smiths City used to have something in Sydenham. Now moved up to opposite South City.
Why?

[Grimy]

Smiths City used to have something in Sydenham. Now moved up to opposite South City.
Why?
I think Percy meant it must be close to Smith City as in it's location in Nelson, not that it is imperative that a HNZ bank should be located by a Smith's City!:-).

[Grimy]

I should also note that as of today I am a holder of HNZ. So quite happy for Percy's $1.25 support level to be accurate rather than optimistic!

[percy]

Smiths City used to have something in Sydenham. Now moved up to opposite South City.
Why?

Started trading about 100 years ago from either present site or very near to it.
Smiths City was known as Smiths City Market,as it was in the city...

[percy]

I should also note that as of today I am a holder of HNZ. So quite happy for Percy's $1.25 support level to be accurate rather than optimistic!

Grimy,I have just been waiting for Balance to confirm the $1.25 is accurate .!!!
He has been right on the money on this thread [too].

[winner69]

A real 'destination' centre in Nelson - Smiths City, Maccas and Heartland all in place

Almost Heaven

What's the parking like?

[percy]

Plenty of parking at Smiths City.

[mouse]

Plenty of parking at Smiths City.
Christchurch or Nelson?

[percy]

Christchurch or Nelson?

Great parking at any Smiths City store through out NZ,Nelson and Christchurch included..

[Snow Leopard]

Sorry to intrude, but can anyone point me in the direction of the Heartland thread?
And will I be able to park my bike there?

Best Wishes
Paper Tiger

PS HNZ down to $0.81 today making it even more of a bargain.

[winner69]

Sorry to intrude, but can anyone point me in the direction of the Heartland thread?
And will I be able to park my bike there?

Best Wishes
Paper Tiger

PS HNZ down to $0.81 today making it even more of a bargain.

Bike with a motor or just one you pedal

[percy]

Bike with a motor or just one you pedal

For a good new bike look no further than...........wait for it,,,,,,,,,,,,,,,,,,,,,,, Smiths City.....
Heartland again.Our friend Chris Lee is pleased to see the back of G.Kerr .He dislikes banks buying back their shares.Yes, improves EPS and divies,however, he feels the funds would be better used to "exploit weak competition when the next downturn arrives."
My going on about the share buy back, was really to quieten those here, who went on that Heartland would need to raise capital,when they did not need to .Whether Heartland are better off to hold funds, or do a buy back, I am easy either way.
Chris Lee also stated that next years earnings will afford Heartland to pay 6 cents per share fully imputed divie.Agree with that.

[Minerbarejet]

Sorry to intrude, but can anyone point me in the direction of the Heartland thread?
And will I be able to park my bike there?

Best Wishes
Paper Tiger

PS HNZ down to $0.81 today making it even more of a bargain.
Would have thought you would have a PT Cruiser

[percy]

Would have thought you would have a PT Cruiser

Right on the button.!!! lol.

[Joshuatree]

Is it by design or accident that a number of Heartland premises are right next door or close to Fast food stores. Hell, said fast food stores selling Cant Burst EM Chicken Bale wraps,Massey Ferguson Retro Kebabs & Silerater Burgers with sludge sauce with Forklift fries and "Shut the gate Lattes" Win/Win

[mouse]

Is it by design or accident that a number of Heartland premises are right next door or close to Fast food stores. Hell, said fast food stores selling Cant Burst EM Chicken Bale wraps,Massey Ferguson Retro Kebabs & Silerater Burgers with sludge sauce with Forklift fries and "Shut the gate Lattes" Win/Win
And Smiths City Car Park.

[percy]

Is it by design or accident that a number of Heartland premises are right next door or close to Fast food stores. Hell, said fast food stores selling Cant Burst EM Chicken Bale wraps,Massey Ferguson Retro Kebabs & Silerater Burgers with sludge sauce with Forklift fries and "Shut the gate Lattes" Win/Win

By design.A friend of mine who was a director of Trust Bank explained it to me when I asked how Trust Bank got on with MacDonalds next door in Merivale .[ChCh].
He said it saved both parties a huge amount of money "sharing" the one car park.When one was busy the other was quiet and vi'sa ver'sa.!!

[mouse]

By design.A friend of mine who was a director of Trust Bank explained it to me when I asked how Trust Bank got on with MacDonalds next door in Merivale .[ChCh].
He said it saved both parties a huge amount of money "sharing" the one car park.When one was busy the other was quiet and vi'sa ver'sa.!!
A week has gone by. And no Post from Percy. Has the 'flu hit? Are you on the road with books and snowed in? A speedy recovery anyway, whatever ails.

[percy]

Busy as a flea in a fit.Had my biggest week of the year last week.Mad enough to think I will get to Westport on Monday and Greymouth on the following Monday.!!!
Heartland's share price strength has been excellent of late.I think the forecast increase profit,high equity ratio, and the possibility of increase dividend next year has made people more comfortable with Heartland.
Stay warm and safe mouse.

[percy]

Heartland Bank Ltd., today announced that on maturity date of 15th July 2013, it will repay the maturing bonds.[NZDX MAR 010]
$104.2 mil.
Positve.

[iceman]

Heartland Bank Ltd., today announced that on maturity date of 15th July 2013, it will repay the maturing bonds.[NZDX MAR 010]
$104.2 mil.
Positve.

Yes good news indeed.

[Minerbarejet]

Nice one Heartland, great sideline advertising at Yarrows Stadium in the "heart " of TSB territory during the 3rd Test. What a positive outfit we have here! :)

[macduffy]

UDC's increased profit augurs well for HNZ's fortunes.

http://news.theage.com.au/breaking-news-business/profit-soars-for-nz-finance-company-udc-20130624-2ortl.html

[percy]

UDC's increased profit augurs well for HNZ's fortunes.

http://news.theage.com.au/breaking-news-business/profit-soars-for-nz-finance-company-udc-20130624-2ortl.html

An excellent result from UDC.
Yes, it augurs well for HNZ.
We are "well positioned.!"

[percy]

UDC's increased profit augurs well for HNZ's fortunes.

http://news.theage.com.au/breaking-news-business/profit-soars-for-nz-finance-company-udc-20130624-2ortl.html

Thanks for posting the link.
I have great respect for UDC.A fine,very well run company.
HNZ offcourse operate very much in the same field.
In some ways I think we all may have under estimated the ongoing growth rate for HNZ.
UDC's 24% is spectacular.HNZ's projected growth to 30/06/2014 is spectacular.As Sparky has pointed out there is a very ready need for both companies.
So our 15% to 20% growth figures may be well wide of the mark?

[percy]

Stuff's Chalkie article this morning "Risk reduction puts banks' loans all at sea" makes for interesting reading.
Heartland has no "overseas" borrowings,so offcourse is not affected.
It will/could be a major cost for the Australian banks.

[Snoopy]

Not surprising.... there aren't many finance companies left anymore! Heartland, as one of the survivors is indeed well positioned as the appetite for growth and expansion in business and personal finances takes hold from 2014 onwards.


I see directors Gary Richard Leach has been selling down his Heartland shares. The 1st July declaration to the NZX indicates 9599 shares sold so far. The FY2012 annual report (p60) leads me believe that 19,137 shares are left to go. It is certainly not a good sign to see a senior insider selling out. Perhaps Gary has judged 82c as near the peak of the Heartland wave?

SNOOPY

[Fuger]

Stuff's Chalkie article this morning "Risk reduction puts banks' loans all at sea" makes for interesting reading.
Heartland has no "overseas" borrowings,so offcourse is not affected.
It will/could be a major cost for the Australian banks.But I imagine the Australian Banks will have domestic borrowing. Here, as well as in Australia.

[Master98]

Generally, directors selling their own shares have two reasons: 1. poor directors; 2. no confidence in their company.

[CJ]

Disagree Snoopy. I think people sell shares for a variety of reasons. He might genuinely have a good use for the money, a tax bill, a holiday, school fees, a new car.

Insider buying on the other hand, happens for only one reason.While you can have good reasons to sell, for the sake of less than $24k worth of shares, he probably should have continued to hold unless he had a reason outside his control (ie. Divorce)

[percy]

But I imagine the Australian Banks will have domestic borrowing. Here, as well as in Australia.

Yes they do have domestic borrowings,however it is their overseas borrowings which are the concern.
May pay you to read the article so you can understand the problem.

[percy]

I see directors Gary Richard Leach has been selling down his Heartland shares. The 1st July declaration to the NZX indicates 9599 shares sold so far. The FY2012 annual report (p60) leads me believe that 19,137 shares are left to go. It is certainly not a good sign to see a senior insider selling out. Perhaps Gary has judged 82c as near the peak of the Heartland wave?

SNOOPY

not exactly a lot of skin in the game.!

[Master98]

Snoopy moved from PGW to HNZ is not a good sign to HNZ, luckly i already sold half of my HNZ holding;)

[Fuger]

Yes they do have domestic borrowings,however it is their overseas borrowings which are the concern.
May pay you to read the article so you can understand the problem.Its the cost of their borrowings which is /will/or might become the problem. Borrowing domestically is one way that would ameliorate the problem a bit.

[Master98]

Hasn't SNoopy been -ve on HNZ since about 50c or so?

as long as Snoopy here, 50c is not impossible to reach, has been proved by PGW:)

[percy]

Its the cost of their borrowings which is /will/or might become the problem. Borrowing domestically is one way that would ameliorate the problem a bit.

Exactly. However why have n't they done that.!!?????
Heartland do not have any of these problems.

[percy]

as long as Snoopy here, 50c is not impossible to reach, has been proved by PGW:)

.
Snoopy has learnt a great deal on this thread.For a long time both Sparky The clown and I have done all we can to help him.

[Fuger]

Exactly. However why have n't they done that.!!?????
Heartland do not have any of these problems.Perhaps you should read chalkies article. which might give you some understanding of the reasons.

[Xerof]

I recall two themes were running simultaneously regarding banking license or not

Snoopdog believed they had to wait until 3 years accounts were available, as per RBNZ guidelines.

xerofdog believed they would never get a license whilst the CUR, Kerr, still had his paw in the till.

Snoopdog was foiled by pro-forma accounts being acceptable (I guess)

xerofdog could say he was correct as no license was granted until after the curs inauspicious exit was consumated. We will never know if that was a valid reason or not, but I'll claim it !!

ps with mild amusement I see the CUR is trying to have the 'transparency for PGC' blog shut down.

[Snoopy]

as long as Snoopy here, 50c is not impossible to reach, has been proved by PGW:)


Master I am making no prediction of doom for HNZ, nor do I predict greatness. I have held PGW for a number of years so I feel that I know that company better than most. I cannot say the same for HNZ. I am a shareholder in HNZ indirectly, because PGW owns a small stake. Hence my interest in HNZ.

All I do know is that there continue to be some difficult property loans on the HNZ loan book and I prefer to wait until the plan to deal with these is clear before investing in HNZ. If HNZ are successful in sorting out these loans there is probably some upside in the share price that I will miss. If they are unsuccessful, then I may join in the cash issue that will be necessary to bail them out. In the meantime I will continue to wait on the sidelines and see what happens.

My message to existing shareholders is not to sell, nor to buy, nor anything to do with any transactions. It is just be careful that you understand the risks attached to those HNZ shares that you own.

SNOOPY

[Balance]

Snoopy, I appreciate you are being cautious. This is a significant improvement on previous comments where you were refusing to acknowledge upside potential! (Banking license, capital requirements, inability for the share to move beyond certain levels)

while they have yet to exit the non core property assets, they have taken steps to account for an exit sooner rather than later. They should get credit for that.

They have also made significant bullish predictions for 2014 earnings, so I hope you get a chance to participate in upside there.

Snoopy has missed the first 63% gain on this 'puppy' since Dodgie Porgie sold down.

Not much point him changing stance now, I would have thought?

[Snow Leopard]

Co-op getting big ideas (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10895345) and advertising, more competition for HNZ?

Best Wishes
Paper Tiger

[Jay]

Seems to be strggling to get past 83c of late - is there still some pesky BOT or other seller who is keeping the price down with their sales

[winner69]

Co-op getting big ideas (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10895345) and advertising, more competition for HNZ?

Best Wishes
Paper Tiger

Good for both Coop and HNZ the smaller NZ banks getting higher market presence

HNZ need not worried .... different types of customers ....one could say complementary

Hey Percy - does that redeem me a bit ,,,, please cut the community service back to 5 hours - found some one to help me plant the 350 trees

[percy]

Good for both Coop and HNZ the smaller NZ banks getting higher market presence

HNZ need not worried .... different types of customers ....one could say complementary

Hey Percy - does that redeem me a bit ,,,, please cut the community service back to 5 hours - found some one to help me plant the 350 trees

Redeemed.!!!
Sounds a very good project to be involved with.
Just love "complementary."

[boofters]

I should probably go and find out for my self, but someone might be able to save me the time... Is HNZ subject to the Open Bank Resolution Policy?

From one jus been through a OBR project in house, Yes HNZ will be under the same Reserve Bank initiative, any registered bank that takes deposits.

IS the CO-OP CEO in the same century?

" I am an absolute advocate that branches remain the heart and soul of the bank."

I myself am an absolute advocate that customer self service at any time of the day or night is the only way a bank will survive the next decade..watch CO-OP dissapear if this is their focus.

[winner69]

I should probably go and find out for my self, but someone might be able to save me the time... Is HNZ subject to the Open Bank Resolution Policy?

seems rather obscure sort of question to ask ..... worried or something

[CJ]

The main point is that the implication of OBR for shareholders is pretty great. I.e. if the bank gets into trouble and the OBR is employed the shareholders are explicitly first in line to lose out. Shareholders are always the first to lose out - thats why we (hopefully) get the greatest rewards.

Order people get money:
Secured
Unsecured (includes bank customers)
Equity

What OBR does (I think) is enable the public to get access to their money quickly (after a small haircut) rather than waiting years to see exactly what they get and not having access in the mean time.

[mouse]

My view is that the shareholders should lose out. It is their responsibility to monitor how the Bank, or any other company, is doing. A good example is Pike River, in which I owned shares. The shareholders lost the lot as a direct result of the failure of Government to have adequate Mining Inspectors at work. I should have asked many more questions about Pike operations.
Which brings me to the job of shareholders in HNZ. We have to take responsibility. After all, we stand to lose the lot if minor errors become major ones.
I shall never forget a shareholders meeting I attended for Pyne Gould. When they were in the process of destroying shareholder wealth. My nasty question, I forget what it was, was greeted with cold silence. The reply from the directors received a wave of applause from the Shareholders. Who shortly after lost most of their cash. Our job is to monitor how our cash invested in HNZ is doing. We could lose the lot.
I must write that up to the present HNZ staff and Directors have done pretty well.

[blobbles]

My view is that the shareholders should lose out. It is their responsibility to monitor how the Bank, or any other company, is doing. A good example is Pike River, in which I owned shares. The shareholders lost the lot as a direct result of the failure of Government to have adequate Mining Inspectors at work. I should have asked many more questions about Pike operations.
Which brings me to the job of shareholders in HNZ. We have to take responsibility. After all, we stand to lose the lot if minor errors become major ones.
I shall never forget a shareholders meeting I attended for Pyne Gould. When they were in the process of destroying shareholder wealth. My nasty question, I forget what it was, was greeted with cold silence. The reply from the directors received a wave of applause from the Shareholders. Who shortly after lost most of their cash. Our job is to monitor how our cash invested in HNZ is doing. We could lose the lot.
I must write that up to the present HNZ staff and Directors have done pretty well.

That is my thinking as well. As investors, we are more likely in a better position (from an education sense and an information available sense) to understand the financials and be able to make conclusions/ask questions based on this, compared to Joe Bloggs down the road who has his savings in the bank and wouldn't know his financial arse from his elbow! As a result, investing for us is both risky and potentially highly profitable, but using our heads instead of hearts to make decisions and ask questions means we should be able to keep both ourselves and Joe Bloggs from losing the lot!

HNZ should definitely be on 90c by the end of the year, in a market that appears to be pretty much fully priced. I expect it to be about $1 though, with returns about what you get in the bank but lots of potential upside for the future, why not?

[Snoopy]

HNZ should definitely be on 90c by the end of the year, in a market that appears to be pretty much fully priced. I expect it to be about $1 though, with returns about what you get in the bank but lots of potential upside for the future, why not?


The argument is that because everything else is fully priced that Heartland should be too? I can give you plenty of reasons why this might not happen. Firstly:

1/ there has never been a market that is fully priced where every share is fully priced.
2/A market fully priced such as we have now is largely held up by very low interest rates. The minute Wheeler looks like raising interest rates the market should fall, and if a rise is forecast within 6 months the market will react. Rising interest rates will dampen demand for loans from Heartland.
3/ Heartland still has a large whack of Central Otago land on the books, and provisions against that land are now exhausted. So any further write down will have a significant impact on book NTA. I was in Central Otago during January and took the opportunity to inspect some of those property developments first hand. All very nice but apart from the odd golf course no facilities. How many people are there willing to spend big dollars to be in the middle of nowhere? I see very little prospect of respite for these developments.

While significant uncertainty for the Central Otago loans exist, I would continue to class this company as very high risk. I would not buy in at any price until the June 2013 balance sheet is released. There is still huge uncertainty with Heartland going forwards.

SNOOPY

[percy]

83 cleaned out yesterday ... onwards and upwards ... next stop circa 86 but could be higher ... NTA of 90c should be cleaned out by end-of-year

Break out confirmed with Snoopy posting.Post 2087.!!! lol

[Minerbarejet]

Break out confirmed with Snoopy posting.Post 2087.!!! lol
better give the glasses a clean percy. lol, havent got to 2087 yet

[percy]

better give the glasses a clean percy. lol, havent got to 2087 yet

Sorry about that.Just got over excited that Snoopy had confirmed the break out.
Post 2082,offcourse.

[Snow Leopard]

Sorry about that.Just got over excited that Snoopy had confirmed the break out.
Post 2082,offcourse.

Yes but we are only half way through 2013 and I for one will long gone before 2082.

Best Wishes
Paper Tiger

[percy]

Yes but we are only half way through 2013 and I for one will long gone before 2082.

Best Wishes
Paper Tiger

Me too.
Are you available to help Winner69 plant native trees?

[percy]

Tim Hunter runs the ruler over HNZ in today's Sunday Star Times.Nothing new;""you've got to look at the credibility of management.They've set some fairly challenging targets over the years, the recapitalisation,the acquisition of PGW Finance,the merger of building societies,attainment of bank registration......these are all stretch targets they've attained."
Forbar and First NZ Capital have 90cent target price,while Craigs have 82cents target.
Craigs are concerned at lack of lending growth.As Sparky [and me] have pointed out,it is margin growth that is important.HNZ are achieving this.

[percy]

Opening yourselves up to a tax issue? :)

Don't think we will be to concerned with tax issues in 2082.Not sure how old PT will be but I will be looking forward to my 133rd birthday.!!

[winner69]

Percy ...... Tim says you not a Flash Harry

Keep buying those postie jumpers ... Not that I can imagine you being an Amani guy

[percy]

Percy ...... Tim says you not a Flash Harry

Keep buying those postie jumpers ... Not that I can imagine you being an Amani guy

Tim is right there.!
Only time I tried to be flash is I brought a jersey from Swanndri.Rubbish, as it fluffed up.At least postie jumpers look new after wearing them for more than 6 times.!!! [and half the price.!]
Amani ? Nice to know you are a peasant too.!!!!

[CJ]

Here's the link to the article.

http://www.stuff.co.nz/business/money/8911253/Heartland-solid-but-not-lavish
In the aecond to last paragraph, why did he use net yield when for the two other banks he used gross yield. A 9% yield is good and slightly higher than the other banks to reflect the higher risk.

Disc: hold and considering buying more. Now it is closer to NTA, the value play has reduced and it is becoming a growth stock with a good dividend.

[percy]

[QUOTE=CJ;416698]In the aecond to last paragraph, why did he use net yield when for the two other banks he used gross yield. A 9% yield is good and slightly higher than the other banks to reflect the higher risk.

I don't know which is the correct way to describe the article,sloppy or lazy reporting.
Huge difference between gross yield and net yield.
The whole article becomes rather pointless.

[winner69]

[QUOTE=CJ;416698]In the aecond to last paragraph, why did he use net yield when for the two other banks he used gross yield. A 9% yield is good and slightly higher than the other banks to reflect the higher risk.

I don't know which is the correct way to describe the article,sloppy or lazy reporting.
Huge difference between gross yield and net yield.
The whole article becomes rather pointless.

Content shouldn't matter to you guys .... you should be pleased just to get positive exposure .... so more moms and dads who read the sunday papers will go out buy .... and buy

[Snoopy]

In the second to last paragraph, why did he use net yield when for the two other banks he used gross yield. A 9% yield is good and slightly higher than the other banks to reflect the higher risk.


NZ investors cannot access Australian franking credits. So in a general sense the 'gross yield' available to NZ investors holding an Australian share is equivalent to the 'net yield quoted in Australia. Over the last year both ANZ and Westpac have muddied this picture a little. Because they make good profits in New Zealand, they generate NZ imputation credits and at last those credits are being passed on to NZ investors. However the imputation credits are small compared to the Australian franking credits generated on the same profit. So as a 'rule of thumb' it is still more correct to compare the net yield from an Australian newspaper perspective on an Australian company with the gross yield quoted in NZ newspapers for a New Zealand company, from an NZ domiciled investor perspective.

IMO Hunter, in the SST article, should have talked about the Australian net yield verses the NZ gross yield, because as NZ taxpayers, that is what NZ residents should be interested in.



Disc: hold and considering buying more. Now it is closer to NTA, the value play has reduced and it is becoming a growth stock with a good dividend.


Are you not mixing up a rise in share price with a change in value play CJ?

If you recall PGW, it rose up into the mid 40c range, before crashing back to below 30c. The rise in PGW share price from 30c to 45c had no fundamental backing. It was a pure speculative bubble. The same could easily be happening to HNZ right now. We won't know until all the 30th June financial figures are published. And you may gather from this I am not talking about profit which is almost irrelevant to the ongoing financial viability of banks. If HNZ is in a speculative bubble the value play still exists, but the market may be mis-pricing the share, temporarily hiding the still existing value play from those in the market today.

The fact that HNZ is now trading closer to NTA (I would argue it is now trading above NTA when the as yet undisclosed next round of property write downs happen) means the market has already assumed that there will not be any more serious repercussions from property write downs. This may or may not be the case. The only real indicator will be published with the full accounts, when we can see the risk classification of all HNZ loans. But I do agree CJ that there is no value in assuming that all the loans are OK.

If the value 'on market' has disappeared, the point I agree with you on CJ, I don't think it follows that the company is therefore in growth mode. It could equally well bobble along with a shrinking loan book, as per last year, for many years into the future as the poor loans are exited. Looked at another way, if the loan book grows by 5% via new loans and an equal gross value of bad loans are exited in the same year, net 'growth' in HNZ is zero. With a bad loan book HNZ will have to run extra hard just to achieve minimal growth.

SNOOPY

[Snoopy]

Alas, this is "pub economics", Snoopy, and is only superficially true when one uses very long moving averages (5 years or more). I-rates move by central bankers to inflate or deflate economies are very, very blunt weapons.


True Belg. I should add that I was speaking from the perspective of a long term investor, an investor that holds the share for long enough so that reserve bank action on interest rates does trickle through. A trader with a shorter term perspective might rightly ignore Mr Wheeler.

SNOOPY

[Snoopy]

And in response to Snoopy:

1. Naturally, but we are not talking about the market. Rather, those who have been supportive of Heartland as an investment have done so on two major counts, firstly that HNZ trades at a discount to NTA, which is 89/90c. Secondly that HNZ has forecast significant earnings growth in 2014.


Fair point



2. I am not sure that's as profound as you allege. Heartland is avoiding land and property financing, and is focusing on the cashflow positive assets in a business, like livestock, new car purchases or farm equipment. Wheeler is aiming to dampen demand in property, so while there will be some flow on from rises in interest rates, I wouldn't see interest rate rises directly affecting combine harvester purchasing, though perhaps some indirect effects. The global price of milk might be more influential, for example.


Heartland may be avoiding new property financing, but do they not have a legacy exposure for example through the Canterbury based building societies that they absorbed?



3. I am comfortable that Heartland have sufficiently accounted for most if not all of the non-core property asset (NCPA) write downs. They were quite thorough in their announcement on 5 June (https://www.nzx.com/companies/HNZ/announcements/237032), which announced effectively a triage of their NCPA portfolio, being a) assets they are happy to hold until they get an offer of interest, b) assets they want to ready for quick sale and c) loan assets which they want to convert into real estate and sell over the medium term.

Heartland has not outlined the impairments allocated for each property in their NCPA register for commercially sensitive reasons, but would note that Central Otago (Lakes District) property prices rose between 11-15% in 2012 (depending on the endpoint), which suggests some enthusiasm returning to the district.

http://www.scoop.co.nz/stories/BU1306/S00794/queenstown-and-wanaka-property-expo-to-be-held-in-auckland.htm
http://www.globalpropertyguide.com/Pacific/New-Zealand/Price-History



Heartland have a plan to deal with their difficult property assets in Central Otago which is good. But that doesn't mean the cost of executing that plan will not be significant. IIRC they have already exhausted their provisions for bad debts on the books. So any further land write down will hit the books this year just finished, with perhaps more next year and the year after....



Nevertheless, I respect your decision to wait until you have more certainty, though again I urge you to contact Heartland directly to seek comfort on your concerns.


Heartland would not be allowed to release any market sensitive information to me, and not the wider market. I imagine the sensitivity of those difficult loans is being gone through in Heartland back offices right now. All will be revealed when those annual results are published. Only a few weeks to wait. I am prepared to wait in the same line as everybody else.

SNOOPY

[CJ]

Snoopy - your point on gross v net was exactly what I mean - incompetent reporting in my view.

Re value play, I have made the assumption that the NTA is correct and therefor I bought 90c of assets for 70c. The recent write downs were hopefully aggressive making the NTA realistic - I accept your view that this is unknown till the assets are disposed.The value gap is narrowing and will soon be within the margin of error in relation to the estimates they made for the write down.

As a small new bank, it is obviously a growth play. Sure it is higher risk than the big banks but a gross 9% yield reflects that.

Therefore a value play, with growth potential and a good yield.

[percy]

From Direct broking site.No idea if they are correct or not.
. NTA Share price
HNZ 90 cents 83 cents
WBC A$10.71 A$29.11
NAB A$14.03 A$29.94
ANZ A$12.56 A$28.72
So CJ you have plenty of value on your side.A fast growing bank, paying a superior imputated dividend.Wise investing.

[percy]

We must also be aware of very strong headwinds that the Australian banks face,which Heartland are unaffected by;
Decline in resource sector is leading Australia into a recession.Growing unemployment, questionable housing values.Car manufacturing and all other manufacturing facing increasing challenges.Retail sector going backwards.The Australian banks also face problems with wholesale funding,and will need to face up to NZ Reserve Bank requirements for more capital.

[mouse]

Looking at all the comments today, and yesterday, I have a suspicion that the weather is pretty bad over NZ.
I wonder when it will improve. Can the weather affect the sharemarket?

[mouse]

two forecasts for $0.82 and $0.90 in 12 months with 6% dividend today. calling for shorts on the aussie banks as recession threatens and heartland looks set to weather any downturn while the big ones suffer. good time to hold and earn some well deserved divvies for thos who bought under $0.50!
Heartland has to drop in price if shares in the aussie banks go down. Its a sort of Lemming activity. Since the sector, banking, is under pressure.

[noodles]

Heartland has to drop in price if shares in the aussie banks go down. Its a sort of Lemming activity. Since the sector, banking, is under pressure.

Are you sure? Correlation seems to have broken down a couple of months ago.

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1373794504598&chddm=129&chls=IntervalBasedLine&cmpto=INDEXASX:XFJ&cmptdms=1&q=NZE:HNZ&ntsp=0&ei=tXDiUbjdPMiKlAWdRw

[janner]

. good time to hold and earn some well deserved divvies for thos who bought under $0.50!

Have been adding all the way up.. Will continue to add.. It is still a good time to buy IMHO....

[janner]

Should really have said .. A good " Price " .. Not " a good time ". Because Price is all important..

[janner]

Forget the label Perc.. They are for polishing ego's..

Picked up a sporting T shirt that was Identical to one on special 50 % of.. 19.95 At REBEL..

For NZ$6.80 retail in China..

Most ( do not wish to be taken to court ) clothiers in NZ are just bloody rip off artists.

Some, just have better advertising skills..



Tim is right there.!
Only time I tried to be flash is I brought a jersey from Swanndri.Rubbish, as it fluffed up.At least postie jumpers look new after wearing them for more than 6 times.!!! [and half the price.!]
Amani ? Nice to know you are a peasant too.!!!!

[noodles]

There was an article by Chalkie in the Sunday Star times today. He did a nice brief on the company. Most of the comments from the brokers that was that it was fair value around 90c and that growth was the challenge.

Note: Sunday Star Times take a while for the article to make it on-line. It is not currently available.

[janner]

It is good to see so much comment appearing in the press.. HNZ is now on the radar..


There was an article by Chalkie in the Sunday Star times today. He did a nice brief on the company. Most of the comments from the brokers that was that it was fair value around 90c and that growth was the challenge.

[percy]

Are you sure? Correlation seems to have broken down a couple of months ago.

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1373794504598&chddm=129&chls=IntervalBasedLine&cmpto=INDEXASX:XFJ&cmptdms=1&q=NZE:HNZ&ntsp=0&ei=tXDiUbjdPMiKlAWdRw

Noodles.Thank you for posting the link.

[Balance]

From Direct broking site.No idea if they are correct or not.
. NTA Share price
HNZ 90 cents 83 cents
WBC A$10.71 A$29.11
NAB A$14.03 A$29.94
ANZ A$12.56 A$28.72
So CJ you have plenty of value on your side.A fast growing bank, paying a superior imputated dividend.Wise investing.

One persistent seller - buyers are however moving up their bids to take advantage of buying HNZ at below NTA.

How I miss my Trust Bank and Westpac shares - sold out too soon years ago after they doubled in value.

[noodles]

From Direct broking site.No idea if they are correct or not.
. NTA Share price
HNZ 90 cents 83 cents
WBC A$10.71 A$29.11
NAB A$14.03 A$29.94
ANZ A$12.56 A$28.72
So CJ you have plenty of value on your side.A fast growing bank, paying a superior imputated dividend.Wise investing.
Percy, do you mind explaining where the growth is coming from as I don't understand their business as much as I should

[percy]

Percy, do you mind explaining where the growth is coming from as I don't understand their business as much as I should

Think Marac finance company with a bank licence.Financing equipment,motor vehicles and small business's requirements,including factoring.
Rural lending through PGW finance.Livestock,plant,equipment and seasonal finance.
Growth is very much in high margin business.With the demise of so many finance companies the opportunities for Marac [HNZ] and UDC [ANZ owned] are growing.
HNZ are not taking on the major banks in house mortgage finance.
There was a very good presentation given at last year's AGM.You may find it on NZX site.

[Balance]

One persistent seller - buyers are however moving up their bids to take advantage of buying HNZ at below NTA.

How I miss my Trust Bank and Westpac shares - sold out too soon years ago after they doubled in value.

Train leaving the station.

Is that Snoopy I see running towards the train door? :) :D

[percy]

Train leaving the station.

Is that Snoopy I see running towards the train door? :) :D

His record stays intact.100% wrong.! lol.

[Snoopy]

His record stays intact.100% wrong.!


I guess this goes back to me suggesting it would take three years years from listing before Heartland got a banking licence, and they received it after one year.

But was I really wrong? I couldn't help notice this paragraph from Tim Hunter's SST article.

"As a new bank, Heartland has been given more onerous capital requirements by the Reserve Bank than the established players. Its tier-one capital ratio - basically the equity as a percentage of risk-weighted assets - must exceed 12 per cent, while the requirement for ANZ and Westpac is 6 per cent."

So although new governor Wheeler granted Heartland a banking licence, it looks more like a learning licence with certain restrictions that do not apply to the big banks. So did Heartland really get a banking licence in the accepted sense? I would suggest Heartland are still driving around with an L plate in the back window while they fulfill they requirement to get a full licence, which could indeed still be years away.

SNOOPY

[percy]

I guess this goes back to me suggesting it would take three years years from listing before Heartland got a banking licence, and they received it after one year.

But was I really wrong? I couldn't help notice this paragraph from Tim Hunter's SST article.

"As a new bank, Heartland has been given more onerous capital requirements by the Reserve Bank than the established players. Its tier-one capital ratio - basically the equity as a percentage of risk-weighted assets - must exceed 12 per cent, while the requirement for ANZ and Westpac is 6 per cent."

So although new governor Wheeler granted Heartland a banking licence, it looks more like a learning licence with certain restrictions that do not apply to the big banks. So did Heartland really get a banking licence in the accepted sense? I would suggest Heartland are still driving around with an L plate in the back window while they fulfill they requirement to get a full licence, which could indeed still be years away.

SNOOPY

HNZ were first to apply under new regulations..While HNZ were saying a banking licence was "just around the corner" you were stating that they had to wait 3 years.They were right.You never checked with them.As is the case with all other banks they have to report to the Reserve Bank.To say it is like a restricted licence is wrong.It is a full bank licence.
What will be interesting to watch is if/when ANZ and WBC have to up their equity.!?

[K1W1G0LD]

I guess this goes back to me suggesting it would take three years years from listing before Heartland got a banking licence, and they received it after one year.

But was I really wrong? I couldn't help notice this paragraph from Tim Hunter's SST article.

"As a new bank, Heartland has been given more onerous capital requirements by the Reserve Bank than the established players. Its tier-one capital ratio - basically the equity as a percentage of risk-weighted assets - must exceed 12 per cent, while the requirement for ANZ and Westpac is 6 per cent."

So although new governor Wheeler granted Heartland a banking licence, it looks more like a learning licence with certain restrictions that do not apply to the big banks. So did Heartland really get a banking licence in the accepted sense? I would suggest Heartland are still driving around with an L plate in the back window while they fulfill they requirement to get a full licence, which could indeed still be years away.

SNOOPY

seeing that you're such a doubter where HNZ are concerned Snoopy , why don't you dialup Heartland management and ask them if they have a Learners or a full licence ......................better yet ring the RBNZ and see what they say. I don't think Heartland need an L plate, they're doing fine!

[Snoopy]

HNZ were first to apply under new regulations..While HNZ were saying a banking licence was "just around the corner" you were stating that they had to wait 3 years.They were right.You never checked with them.As is the case with all other banks they have to report to the Reserve Bank.To say it is like a restricted licence is wrong.It is a full bank licence.


Just to reprise Tim Hunter's quote:

"As a new bank, Heartland has been given more onerous capital requirements by the Reserve Bank than the established players. Its tier-one capital ratio - basically the equity as a percentage of risk-weighted assets - must exceed 12 per cent, while the requirement for ANZ and Westpac is 6 per cent."

What this means is that if Heartland singles out $12,000 of capital, then they can sign up a loan of $100,000 tied to that capital.
If ANZ or Westpac singles out $12,000 of capital, then they can sign up a loan of $200,000 tied to exactly the same dollar amount of company capital.

If that isn't a restriction on Heartland's core activities vis a vis other banks, I don't know what is. No matter how you spin it, the Heartland banking licence does not give Heartand the same privileges as banking licences awarded to ANZ and Westpac!

SNOOPY

[percy]

[QUOTE=CJ;416698]In the aecond to last paragraph, why did he use net yield when for the two other banks he used gross yield. A 9% yield is good and slightly higher than the other banks to reflect the higher risk.

I don't know which is the correct way to describe the article,sloppy or lazy reporting.
Huge difference between gross yield and net yield.
The whole article becomes rather pointless.
Rather funny that Snoopy finds the article of interest,

[Balance]

Sigh....

Snoopy, this is most unbecoming. Do you really want us to answer whether you were wrong or not?

Is it so hard to admit that Heartland earned their licence in a rigorous process that was expensive and time-consuming?

When you are in a hole, stop digging!

Snoopy - most unbecoming of you. Train door is still half open - you have our permission to embark. :D:D:D

[percy]

Had to suppress a laugh on this comment....

You have stronger self control than I do.I am still laughing my head off.!!!

[percy]

When you are in a hole, stop digging!

Snoopy - most unbecoming of you. Train door is still half open - you have our permission to embark. :D:D:D

I think he will decide the train door is half closed.!!!

[Snoopy]

Rather funny that Snoopy finds the article of interest,


Tim Hunter may not have expressed himself in an optimal way. But there is nothing wrong in his article. You should not be so quick to disparage it.

SNOOPY

[mouse]

When you are in a hole, stop digging!

Snoopy - most unbecoming of you. Train door is still half open - you have our permission to embark. :D:D:D
Mind The Gap!