A client of mine financed a motor vehicle with Marac in the last financial year and Marac insisted on a 40% deposit which means Johnny has a lot of skin in the game when it comes to his vested interest that he keeps up with the payments...this is a far cry from some of the reckless zero deposit lending that some far less reputable finance companies were doing at the height of the GFC.
That sort of prudent finance company lending and a substantial 15% capital adequacy ratio, (far higher than the Aussie banks) means the risk profile of HNZ is not materially different to the Aussie banks and perhaps could even be better !!
Also as I am sure you are aware dividends from ANZ carry no N.Z. imputation credits whereas HNZ ones carry full credits
Not true. ANZ bank has had New Zealand imputation credits on dividends for NZ shareholders available for a couple of years now. Granted they are not nearly enough to call the dividend 'fully imputed' in NZ. So Heartland have the edge in having more imputataion credits proportionately.
The other issue you discuss regarding potential vulnerability in the possible event of a major exogenous shock like a GFC Mk2 ignores the fact that the various building society's and finance company's that now are comprised within the HNZ parent company successfully traded right through the GFC we've just had.
Some here it seems have short memories. Heartland only exists because PGC shareholders, back when PGC was resapectable, put up the capital to create it. The purpose for Heartaland's erxistance was to rescue the likes of Marac, a part of PGC that was in dire financial straits as a result of the GFC. The other smaller financial institutions that joined in certainly had their own GFC related prolems at the time. Far from navigating through the GFC successfully, Heartland is best described as a bailout in itself.
Of course all of this is historical and doesn't (or shouldn't) affect the prospects of Heartland going forwards. But those who forget history sometimes end up repeating it.
SNOOPY
Last edited by Snoopy; 23-02-2016 at 05:16 PM.
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A client of mine financed a motor vehicle with Marac in the last financial year and Marac insisted on a 40% deposit which means Johnny has a lot of skin in the game when it comes to his vested interest that he keeps up with the payments...this is a far cry from some of the reckless zero deposit lending that some far less reputable finance companies were doing at the height of the GFC.
My brother got 15% deposit (conveniently the same as GST rate) at 1% on his last car purchase.
Yep, okay Snoopy my mistake, last time I looked at it ANZ divvy's weren't imputed, latest divvy carried 12 cents imputation of a 95 cent dividend, so well under half the level of the full imputation credits HNZ attach to their divvy's. Regardless of your view on history I stand by my comment that the capital adequacy of HNZ is significantly superior to the Aussie banks and obviously the Reserve bank thinks they're in good shape. As Percy mentioned the Aussie banks carry their own unique risks.
Forget about the daily chart,look at the weekly chart,it is way more telling.
I prefer the monthly chart
Mr Taleb says the more often you look at stock prices the greater number of disappointments you will have. (punters feel the pain when the price falls more than glee when the price rises)
HNZ is a good case in point - So forget about the shareprice on a day to day basis but if you need to just have a peek at the end of each month
Over the last 30 months you would have felt the 'pain' of a falling shareprice only 7 times - and 4 of those followed a month of exceptional gains (happiness) the month before so the pain wasn't too bad.
So really last 30 months only 3 instances of 'pain' ..... on a daily basis there would have been many days of 'pain' and in some cases even anguish
Mr Taleb says the more often you look at stock prices the greater number of disappointments you will have. (punters feel the pain when the price falls more than glee when the price rises)
HNZ is a good case in point - So forget about the shareprice on a day to day basis but if you need to just have a peek at the end of each month
Over the last 30 months you would have felt the 'pain' of a falling shareprice only 7 times - and 4 of those followed a month of exceptional gains (happiness) the month before so the pain wasn't too bad.
So really last 30 months only 3 instances of 'pain' ..... on a daily basis there would have been many days of 'pain' and in some cases even anguish
Heading to $1.40 in 12 months isn't it.
Yep thats a great chart,and you are right,less pain,but providing you check back on the weekly to make it quicker to see the inevitable (even if it's a year or two away)change in trend. Long term for direction,short term for timing.
I don't think it will be a year before 1.40 is achieved.Just my opinion.
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Originally Posted by Roger
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