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18-11-2015, 05:00 PM
#6701
Originally Posted by stoploss
Originally Posted by Paper Tiger
HNZ is a tiny little bank:
ANZ $134B of liabilities;
ASB $71B of liabilities;
HNZ $3B of liabilities.
Best Wishes
Paper Tiger
HNZ falling over is not such a significant risk to NZ, unlike the big five.
But I would rather it not go phut!
Best Wishes
Paper Tiger
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18-11-2015, 05:08 PM
#6702
Originally Posted by stoploss
I don't think anybody is doubting Heartland ability to withstand a major dairy downturn. Dairy after all only 7% odd of total loans. No need to 'stress test' Heartland.
The so named other banks exposure to dairy is irrelevant to any discussion re Heartland.
What's important is the impact on Heartlands future earnings if more than expected of the $200m plus dairy loans under perform. Remember earnings are only $50m odd so it doesn't take too much extra bad debt to make a dent in that.
As Heartland themselves say 'expect higher levels of impairment in FY16. I wonder how much more?
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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18-11-2015, 05:30 PM
#6703
What could be the impact on Heartland's future profits?
Maybe as high as $9m a year
This from the Cows in Calf thread (where good stuff is often posted). They refers to the RBNZ
They're not worried about HNZ because its a small lender with a higher capital ratio already and they know HNZ are planning to raise more capital early next year.
By their own estimations 18% losses in the sector implies HNZ could get hit for about $37m (18% of $207m). Expect HNZ to spread that over a number of years to make it manageable, amortised over 4 years = $9m a year reduction in profits and seeing as they're forecasting $50m then its not going to upset the financial stability of the economy other than shareholders expecting profit growth, (Reserve bank doesn't care about them).
Last edited by winner69; 18-11-2015 at 06:56 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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18-11-2015, 08:28 PM
#6704
Dairy farm prices down 19% from a year ago
Could mean that the 62% LVR that Heartland touts is now about 78% (based on averages applying to Heartland)
https://www.reinz.co.nz/shadomx/apps...siteName=reinz
Last edited by winner69; 18-11-2015 at 08:51 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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18-11-2015, 09:07 PM
#6705
Originally Posted by winner69
My view is the Heartland lending to the dairy sector would be at a higher risk end of the market compared to the big 5(when considering client financial health & reason for the loan) .So if the big 5 may have 5-10% dairy lending impaired I would expect 2-3(maybe higher) times this % impairment with the Heartland loan book.My understanding is the Heartland loan book is more likely for stock etc rather than over land.
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19-11-2015, 11:23 AM
#6706
HNZ share price on fire today - up to $1.32
Even the DRP shares if lastvApril soon to be in the money
Steady rise from here and $1.40 by the time of ASM and then who knows what might happen ....confirmation of $56m earnings and a good old Jeff ramp up might shoot up to $1.50 ---- yippee
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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19-11-2015, 11:44 AM
#6707
There have been two recent brokers' reports on HNZ.Both were very impressed with HNZ's capital management proposals,the use of Tier2 capital to fund the possible share buy back, and the positive affects that will have on eps,roe and dividends.
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19-11-2015, 11:50 AM
#6708
Originally Posted by percy
There have been two recent brokers' reports on HNZ.Both were very impressed with HNZ's capital management proposals,the use of Tier2 capital to fund the possible share buy back, and the positive affects that will have on eps,roe and dividends.
Maybe that's why the share price is pushing into the mid 130's
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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19-11-2015, 12:16 PM
#6709
Originally Posted by percy
There have been two recent brokers' reports on HNZ.Both were very impressed with HNZ's capital management proposals,the use of Tier2 capital to fund the possible share buy back, and the positive affects that will have on eps,roe and dividends.
If everything else remains constant doesn't paying interest on these bonds reduce profits = value of dividends paid out is reduced as a consequence
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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19-11-2015, 12:32 PM
#6710
No.
ROE increases.
Interest paid on bonds is debuctible.
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