Do we know how much Heartland is paying for Challenger Bank?
From what I read today we are taking over the losses which Challenger Bank make.
Although the overall Challenge Group seem to make healthy profits and Challenger group seem to do a lot of things similar to Heartland. i.e. provide retirement finances.
So why do we think we can turn this bank into a profitmaking business when Challenger group cant make this bank make a profit?
Do we know how much Heartland is paying for Challenger Bank?
From what I read today we are taking over the losses which Challenger Bank make.
Although the overall Challenge Group seem to make healthy profits and Challenger group seem to do a lot of things similar to Heartland. i.e. provide retirement finances.
So why do we think we can turn this bank into a profitmaking business when Challenger group cant make this bank make a profit?
The reason is 'we' (being the Heartland shareholders) are already making a good income stream in Australia from our Reverse Mortgage customer base and Stockco customer base. The Challenger Bank acquisition is transition the relatively high cost existing wholesale funding into lower cost retail funding. The end line borrowing customers are already there. The Challenger Bank acquisition is ultimately an exercise in trimming the funding cost base.
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Do we know how much Heartland is paying for Challenger Bank?
From what I read today we are taking over the losses which Challenger Bank make.
Although the overall Challenge Group seem to make healthy profits and Challenger group seem to do a lot of things similar to Heartland. i.e. provide retirement finances.
So why do we think we can turn this bank into a profitmaking business when Challenger group cant make this bank make a profit?
Heartland is but another of the many NZ companies which think they can duplicate their successes in NZ and venture into Australia.
Let’s see :
Telecom
The Warehouse
Air NZ
FBU
Tower
Pumpkin Patch
Restaurant Brands
Zintel
BNZ
NZI
There are others but enough to know the companies above went over and got their backside kicked all the way back into NZ.
Heartland is but another of the many NZ companies which think they can duplicate their successes in NZ and venture into Australia.
Let’s see :
Telecom
The Warehouse
Air NZ
FBU
Tower
Pumpkin Patch
Restaurant Brands
Zintel
BNZ
NZI
There are others but enough to know the companies above went over and got their backside kicked all the way back into NZ.
Why do they do it? Ego and naivety.
It's fair to observe a number of Kiwi's have cocked up in Australia, and to pin that on naivety and ego as a root cause.
But likewise good to celebrate the successes too.
Smartpay
Hallenstein Glassons
EBOS
Mainfreight
Vulcan Steel
And I'd even chuck in Michael Hill and KMD - even though they are stuck in the macro rut - with +50% sales in Australia now they would be weaker if not for their trans-tasman expansion. These are just currently listed companies - can't be bothered to think of those that have been taken over.
To get it right you need to have some form of competitive advantage. You can't just waltz into Australia with a vanilla offering in a competitive market and think you'll get a look in. Likewise you can't make it a success if you run it from New Zealand, install a handful of Kiwi's as local GM's, and think of it as just another business centre akin to the Waikato. Need to play by Aussie rules and give it a lot of focus, time and effort.
Heartland's Australian RM business is a success. I obviously have my view on the price paid for StockCo and some concerns on the Challenger price, but will be some time before the pieces of the puzzle are in place before we know if it'll be a success, or not.
Probably does require a bit of Ego to establish a NZ bank in Australia, just as it did to amalgamate a plethora of building societies and consumer books into HBL in 2012. An ego isn't necessarily a problem, if it can be kept in check.
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Originally Posted by bull....
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