HGH - Heartland Group Holdings

[kizame]

Thing is though, what will happen to their security in reverse mortgages with a falling property market?

[peat]

Thing is though, what will happen to their security in reverse mortgages with a falling property market?

their lending ratios are unlikely to result in a shortfall except in the case of unprecedented falls in the property market , which are possible but not that likely unless we go into a full on long lasting Depression.

[Recaster]

Wow ….NZ Reverse Mortgages …Profit UP 40% to $17.9m in H1

That’s pretty good

Except large chunks of the interest income are promises to pay at unknown future dates.

[percy]

From HGH presentation yesterday page 19 NZ Reverse Mortgages Portfolio Analytics..Page 29 has their Australian analytics.
Average loan size $122,751
Weighted average borrowers’ age 78
Average origination LVR 10.0%
Weighted average LVR 19.7%
Proportion of the loan book over 75% LVR 0.0%
Number of loans in the book over 75% LVR 0
1H2023 origination $109m
(+$33m vs 1H2022)
Total repayments in 1H2023 $51m
(+$5m vs 1H2022)
1H2023 repayment rate
14.0%
(vs 15.2% in 1H2022)
Compounded annual growth rate1 13.4%
Repayments from vintage loans (+11 years) 31.4%
(vs 36.0% in 1H2022)

Here is the presentation for those who have not read it.
http://nzx-prod-s7fsd7f98s.s3-websit...457/389620.pdf

[Baa_Baa]

Thing is though, what will happen to their security in reverse mortgages with a falling property market?

Not really a problem, have a look at this what you could actually borrow. (look at the interest rate as well, ouch!)

[Recaster]

From HGH presentation yesterday page 19 NZ Reverse Mortgages Portfolio Analytics..Page 29 has their Australian analytics.
Average loan size $122,751
Weighted average borrowers’ age 78
Average origination LVR 10.0%
Weighted average LVR 19.7%
Proportion of the loan book over 75% LVR 0.0%
Number of loans in the book over 75% LVR 0
1H2023 origination $109m
(+$33m vs 1H2022)
Total repayments in 1H2023 $51m
(+$5m vs 1H2022)
1H2023 repayment rate
14.0%
(vs 15.2% in 1H2022)
Compounded annual growth rate1 13.4%
Repayments from vintage loans (+11 years) 31.4%
(vs 36.0% in 1H2022)

Here is the presentation for those who have not read it.
http://nzx-prod-s7fsd7f98s.s3-websit...457/389620.pdf

Excellent, thanks. Quite complex.

[iceman]

Except large chunks of the interest income are promises to pay at unknown future dates.

At high interest rates and very good security and low risk. This is a great business that HGH is doing well both in Australia & NZ. Undoubtedly a driver of great growth.

[Onemootpoint]

From HGH presentation yesterday page 19 NZ Reverse Mortgages Portfolio Analytics..Page 29 has their Australian analytics.
Average loan size $122,751
Weighted average borrowers’ age 78
Average origination LVR 10.0%
Weighted average LVR 19.7%
Proportion of the loan book over 75% LVR 0.0%
Number of loans in the book over 75% LVR 0
1H2023 origination $109m
(+$33m vs 1H2022)
Total repayments in 1H2023 $51m
(+$5m vs 1H2022)
1H2023 repayment rate
14.0%
(vs 15.2% in 1H2022)
Compounded annual growth rate1 13.4%
Repayments from vintage loans (+11 years) 31.4%
(vs 36.0% in 1H2022)

Here is the presentation for those who have not read it.
http://nzx-prod-s7fsd7f98s.s3-websit...457/389620.pdf

This is good. Thanks!

[percy]

And this is The Australian HGH Reverse Mortgage Analytics.
Average loan size A$156,497
Weighted average borrowers’ age 77
Average origination LVR 11.7%
Weighted average LVR 20.0%
Proportion of the loan book over 75% LVR 0.1%
Number of loans in the book over 75% LVR 3
1H2023 origination $169m
(+$58m vs 1H2022)
Total repayments in 1H2023 A$97m
(+A$21m vs 1H2022)
1H2023 repayment rate
16.7%
(vs 15.1% in 1H2022)
Compounded annual growth rate1 18.5%
Repayments from vintage loans (+11 years) 17.2%
(vs 18.5% in 1H2022)

[BlackPeter]

Except large chunks of the interest income are promises to pay at unknown future dates.

Basically the same problem as for any life insurance company. Good thing is - for large (statistically relevant) numbers the maths to calculate life expectation is pretty settled.