Originally Posted by
Snoopy
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There were questions from shareholders on the sub par return on equity (11.1% over FY2019) when compared with a benchmark return for Aussie listed banks of 11% to 15%. Jeff noted that excluding one offs the ROE for FY2019 was 11.7% and underlying ROE was up to 12.2% for the second half. Jeff said that one way to raise this ROE figure was to have a 'just in time' capital raising, as opposed to the old system of raising capital in one lump, then having to wait months or even years before it was fully deployed. Jeff said the new group structure allowed 'just in time capital raising' to happen. I am not sure I fully understand this comment. As Heartland Group Holdings shareholders, we still have to hold onto the capital until the subsidiary we call 'Heartland Bank' needs it. So although the ROE at Heartland Bank goes up, the ROE at Heartland Group Holdings, the compnay we hold shares in, does not under that scenario. Perhaps another shareholder who was there at he AGM can better interpret what Jeff said that I did?
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SNOOPY