Snoops
You want to have a look at ‘Capitalised Interest
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Snoops
You want to have a look at ‘Capitalised Interest
I had a look at the 'Reconciliation of profit after tax and net cash flows from operating activities' p16 AR2017 and got a big shock Winner. It is very shocking when you line up those figures against 'net profit after tax'.
FY2016 FY2017 Capitalised Net Interest income $25.548m $32.221m Net Profit After Tax $48.108m $62.240m
Am I reading this right? Only about half of Heartland's profit translates to cash from operating activities while the rest will be collected 'later' (assuming - amongst other capitalised assets - those property assets securing the reverse mortgage cash outflows can indeed be cashed up at today's 'market price' in the future )?
Percy reckons that Heartland doesn't have the exposure to the overinflated housing market that the other big banks have. But looking at these figures, could he be wrong?
SNOOPY
PS Why are these capitalised interest payments not itemised in AR2016 report? Has there been a change in accounting standard that suddenly sees these figures disclosed?
We can all huddle up safely in our kennels tonight and try and stay warm safe in the knowledge that Heartland's loan to valuation ratio's on reverse mortgages is extremely conservative.
Snoopy.
Do some research on RELs [reverse equity loans].
Maybe start by reading HBL's presentations.Everyone of them over the past few years refers to them.
Loan security,reasons for loans [ a few surprises],length of time loans taken out[ more surprises],and interest rates charged on RELs [no surprises lol] .
Then compare those results with standard mortgages.
Answers will tell you why HBL are in this secure ,profitable growth sector.
Bugger ...meant to delete that post of mine but never mind. Didn’t think it would shock you though Snoops
The capitalised interest is related to the RELs but could include some of those rural loans you were concerned about where interest is added to the loans
This amount on this line on that reconciliation will only get larger over time as RELs grow. Might need more capital eh.
Latest round of deck share shuffling completed this morning. Having bit the bullet and secured a loss on HBL I had to figure out how best to make up that money. I still wanted a finance exposure so I've bought more TRA at $3.10. I see more potential in making a 10% gain in TRA than I do in HBL. I was also carrying a gain on my prior TRA purchase so i figured that would help offset the loss. Its bought my average TRA price to $3.04 so at the moment I am still showing positive territory in TRA - and there is a divi to come, with resultant drop in SP to be expected. With market moves in the last few days but cash now back in the market Portfolio is showing a 29.3% overall gain this year. I'l review in 6 months to see if this was the right decision.
Not getting at HBL here, quite the opposite as they don't have a branch network and are not stooping to these lows.
http://www.scoop.co.nz/stories/BU180...-customers.htm I think its reprehensible behavior that these Australian owned banks are trying to leverage their business by selling customers insurance. The stat's are alarming and the so called bank of new Zealand appears to be the worst offender with a whopping 93% of staff saying they feel under pressure to sell financial products to customers.
Isn't it great that a bank really owned by Kiwi's doesn't have to stoop to these sort of "underarm bowling tactics" to grow its business !
I think you'll find all the local banks (including KiwiBank) sell insurance with the insurer behind most being IAG, whose brands include State and AMI. In my past dealings with banks and insurers there have always been targets, even if set at the request of the insurer.
https://www.youtube.com/watch?v=wvAui0vUT88
Now...who wouldn't trust Tom ?
Acting like a lead balloon of late, the red arrow on my portfolio is going down at the same rate the blue arrow is going up on my TRA holding.