Liquidity Buffer Ratio aka Meads Test HY2017 (Part 2)
Quote:
Originally Posted by
Snoopy
HNZ LENDINGS vs HNZ DEBENTURES
Customers owe HNZ 'Finance Receivables' of $3,113,957,000. There is no breakdown in AR2016 (note 11) as to what loans are current or longer terms. However, if we look at note 20, we can derive the expected maturity profile of total finance receivables due over the next twelve months.
|
On Demand |
0-6 Months |
6-12 Months |
Total |
Expected Receivables Due |
$84.154m |
+ $961.274m |
+ $639.962m |
= $1,685.390m |
less Expected Deposits for Repayment |
$21.630m |
+ $289.314m |
+ $304.975m |
= $615.919m |
equals Net Expected Cash Into Business |
$62.524m |
$671.960m |
$334.987m |
$1,069.471m {B} |
If more money is coming in from customer loans being repaid, than is having to be repaid to the debenture holders, then this is a good thing for debenture holder liquidity. That is the case here.
HNZ LENDINGS vs HNZ DEBENTURES
Customers owe HNZ 'Finance Receivables' (Lendings) of $3,334,800,000. If we look at note 14 of IFR2017, we can derive the expected maturity profile of total finance receivables due over the next twelve months. (This is what I did in part 1 of this calculation.) Adding the totals for the ensuing twelve months gives:
|
On Demand |
0-6 Months |
6-12 Months |
Total |
Expected Receivables Due |
$69.655m |
+ $1,058.738m |
+ $710.751m |
= $1,839.144m |
less Expected Deposits for Repayment |
$22.713m |
+ $339.288m |
+ $323.666m |
= $685.667m |
equals Net Expected Cash Into Business |
$46.942m |
$719.450m |
$387.085m |
$1,153.477m {B} |
If more money is expected coming in from customer loans being repaid, than is having to be repaid to the debenture holders, then this is a good thing for liquidity and debenture holders being repaid. That is the case here: good news for debenture holders.
It is important to note that this calculation is based on the loan book position at balance date. New loans taken out since balance date are not included. Neither are brand new customer debentures invested with Heartland since balance date. So these figures are not a forecast of what will happen. But they are are forecast of what will happen if all customer loan and deposit activity ceased at last balance date. This means the figures are best suited for comparing with previous periods, rather than being forecasts of what will happen in their own right.
Compared to six months ago, the expected liquidity imbalance has improved overall. But the 0-6 month period has blown out, signalling a possible 'wall of cash' to be returned to Heartland between December 2016 and June 2017.
SNOOPY