plus cash & equivalents
plus investments
plus whatever else produces interest
Do not know how close that will get you but give it a go.
Best Wishes
Paper Tiger
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One of the most telling bits of information Craig gave me was they had less trouble with car loans, than they did with house mortgages!
People need their car to get to work.No work,no income.
Other bits and pieces was more helping me understanding their balance sheet. The fact that Heartland's equity ratio,and liquidity was extremely strong. Other guidance, was that they were looking for margin rather than growing the lending book.Replacing low margin mortgage lending with more profitable products.Also how they were servicing Timaru successfully from Ashburton,rather than Christchurch.
W69..Yes Allison is very pleasant to talk to.I have only spoken to her when I have rung Jeff Greenslade,to congratulate him on achieving yet another milestone .Appears Jeff is very lucky to have her as a PA.
My view is that housing is overrated as an investment. Plus thousands of Bank dollars are tied up with one loan. Cars, a higher interest rate plus a shorter term. The problem with cars is their electronics fail and the car has died. But that is the borrowers problem, not the banks. We then get a loan history of borrowers. Do we give them a better rate?, I dont know. Maybe we should.
Then we come to Earthmovers, etc. Business down, cant pay. Repossess the beast. Sell it if you can. If not, sell it overseas. But it is difficult to export a large building made of concrete. A bit of a 'stuck' asset.
Thanks for the constructive tweaks suggested by Xerof and PT. Now to rerun the figures as per these suggestions.
Unchanged from before: Note 8 from the Heartland declaration has:
1/ the 'total interest income' at $200.141m and
2/ the 'total interest expense' at $93.719m
The dollar difference on those two is $106.442m.
Now we will figure out the average asset book as estimated from the EOFY2013 and EOFY2014 figures
EOFY2014 EOFY2013 Average Cash/Cash Equivalents $34.588m $172.777m $103.683m Investments $238.859m $165.223m $202.041m Investment Properties $24.888m $58.287m $41.588m Finance Receivables $1,985.119m $2,010.376m $1,997.748m Total $2,345.060m
$106.442m / $2,345.060m = 4.54%
That is just higher than the 4.44% quoted in Heartland's own chart. But given I don't have the data that Heartland have on actual average assets under management, this is as close as I'm going to get on the figures provided. Thanks guys.
SNOOPY
Now the interesting stuff starts. Calculating the net interest margin that Heartland hasn't told you about yet :-).
The figures below are for Q1 FY2015
Note 5 from the Heartland declaration has:
1/ the 'total interest income' at $52.037m and
2/ the 'total interest expense' at $23.100m
The dollar difference on those two is $28.937m.
Now we will figure out the average asset book as estimated from the EOFY2014 and EOFQY2015 figures
EOFY2014 EOFQY2015 Average Cash/Cash Equivalents $34.588m $37.805m $36.197m Investments $238.859m $241.289m $240.074m Investment Properties $24.888m $23.150m $24.019m Finance Receivables $1,985.119m $2,047.011 $2,016.065m Total $2,316.355m
Annualising that result
4 x $28.937m / $2,316.355m = 5.00%
That means if Heartland can annualize the quarterly improvement, they will lift their net interest marging by a half percentage pount over FY2014. That represents a potential 20% improvement.
SNOOPY
Snoopy ....they probably time weight things as well but your FY14 is pretty close to what they say.
Also if you used RB report for Q1 it only applies to heartland Bank and doesn't include her.
So if margins did expand by 0.5% that's an extra $12m on the bottom line
So $36m plus $12m plus say growth $4m is well in excess of their $45m to $47m guidance
Wonder whose right or whose kidding who
I think Heartland has hit the big time now. Just received my first Heartland Bank email phishing scam. This is a positive development for Heartland. Even the scammers are following them:)
http://www.heartland.co.nz/content/i...l-account.aspx
New product called direct call paying market leading interest rate.
I seem to remember reading that sub-prime car loans have often outperformed home loans in terms of delinquencies because owners realise owning a car to get to work is essential even if you end up moving to a rental dwelling or similar. That said we've not has a large house price decline in New Zealand in many years.
That is an appealing product. 4.5%pa for on on call account with easy withdrawal to a nominated account. My Heartland 12 month term pie is paying 4.6% so this direct call account is only paying 0.1% less than that. The Heartland Cash PIE only pays 4.0% pa with withdrawals taking some time to be processed. I would like to see Heartland introduce a PIE version of the direct call account.
For comparison, the ANZ online a/c & Cash PIE fund currently pay 3.0% pa.
Disc: Investor and account holder in both HNZ and ANZ