HGH - Heartland Group Holdings

[Snoopy]

So here we go:

	Tier1&2 a la Snoopy %	RBNZ Requirement %	Buffer %
ANZ	12.6	8	4.6
WBC	10.5	8	2.5
HNZ	18.4	12	6.4

It would seem that HNZ still wins hands down. I have just followed the calculation method and instructions of Snoopy.

OK, thanks for that PT. What your table is telling us is that assuming equal stability of capital, it is Heartland that has the greater capacity to leverage its existing business for its existing capital base.

This is where the analysis gets a bit chicken and egg. The higher RBNZ capital requirement for HNZ is because HNZ is perceived as having a less stable capital base. However the calculation assumes that the capital base is stable, because the equity base used is a fixed number. So if the Tier 1 capital of Heartland were to change, for the worse or for the better, the RBNZ 12% requirement is still stuck in the immediate historical past. Ultimately the capital requirement for HNZ may approach the 8% of ANZ and Westpac (the optimistic scenario). Then Heartland will be able to leverage their existing capital even more, greatly affecting the ability of Heartland to grow off its current capital base in a positive way.

However, if Heartland has a significant loss of capital, and because it is small that might include the collapse of the property market in Queenstown (for example) that 12% buffer erquirement could suddenly look very close. And those heroic shareholders might face another call on funds.

I guess what I am saying is that on that one raw figure Heartland looks best. But that one figure does not consider the sensitivity of alternate futures that may play out.

SNOOPY

[percy]

Alternative futures look more challenging for Australian Banks than NZ's Heartland.
Australian Mining Industry;In decline.
Australian Manufacturing,In decline.
Australian Automotive Industry,In decline.
Australian Retail Stores.In decline.
Australian Qantas.In decline.
One wonders whether Australian banks will look after Australian interests before NZ intersts.Will NZ Reserve Bank ask the Australian Banks to shore up their capital ratios for their NZ subsidiaries?
The future for Heartland looks a lot more secure to me.! New Zealanders serving New Zealanders.

[Beagle]

Alternative futures look more challenging for Australian Banks than NZ's Heartland.
Australian Mining Industry;In decline.
Australian Manufacturing,In decline.
Australian Automotive Industry, On death row.
Australian Retail Stores.In decline.
Australian Qantas.In decline.
One wonders whether Australian banks will look after Australian interests before NZ intersts.Will NZ Reserve Bank ask the Australian Banks to shore up their capital ratios for their NZ subsidiaries?
The future for Heartland looks a lot more secure to me.! New Zealanders serving New Zealanders.

Fixed that for ya. You'll be right apart from in a serious collapse when the default rate on car loans of which Heartland has HEAPS goes absolutly ballistic.

You've got no idea in the heat of the last GFC how many leased and heavily encumbered luxury cars were simply left at the airport when people left the country for Australia. Unlike housing, its relativly easy to walk away from cars.

[percy]

Fixed that for ya. You'll be right apart from in a serious collapse when the default rate on car loans of which Heartland has HEAPS goes absolutly ballistic.

You've got no idea in the heat of the last GFC how many leased and heavily encumbered luxury cars were simply left at the airport when people left the country for Australia. Unlike housing, its relativly easy to walk away from cars.

Yes I think the Australian banks will feel the heat with rising unemployment.
People close to the car finance business, will tell you people keep payments up on their car before the house,as they need their car to get to work.No work no income.

[Jay]

Full page advert in the NZ Herald today for their Reverse Mortgages - did not take them long.

I know they are available at several other Banks and other "finance" institutions, but you very rarely see them advertised

[SCOTTY]

Full page advert in the NZ Herald today for their Reverse Mortgages - did not take them long.

I know they are available at several other Banks and other "finance" institutions, but you very rarely see them advertised

Quarter page ad in the "Press" today as well. Looks good

[Longhaul]

Quarter page ad in the "Press" today as well. Looks good

Is it branded as HNZ?

[Jay]

Herald ad is

[SCOTTY]

Is it branded as HNZ?

Yes it is

[kizame]

Also advertising hard out on the rock for livestock purchases,and no repayments for 18 months if i remember correctly.