HGH - Heartland Group Holdings

[percy]

From The Managing Director's [Mr.Jeff Greenslade] address to the HNZ AGM on 11/12/2015;
Rural Division.
"We remain well-positioned to support our dairy farmer customers and we currently have no expectation of losses as a result of the current dairy prices."
ps.I thought it was you W69 who asked the question about diversity,but in hindsight you would have asked it Maori!!>> lol.

[Crackity]

Reserve Bank still are a bit worried about dairy loans
http://www.sharechat.co.nz/article/d...4-of-loanshtml

Exposure for Heartland (even though exposure to dairy is 'low') is that dairy bad debts ccould affect profits by $4m to $28m

Factor into your thinking as you see fit.

possibly relevant to HNZ eh Winner? Some of our posters ( ex / banned or current) may have said a bit more?


The Reserve Bank has estimated the cash-flow shortfall for the average dairy farmer is likely to be more than $1 per kilogram of milk solids this season and that banks could see defaults on between 2 and 14 per cent of dairy sector loans.

In an updated assessment of dairy sector vulnerabilities, the central bank said low global milk prices are placing dairy farmers under significant cash flow pressures with most farmers expected to have cash losses in the current season, compounding weak returns from the previous season.



and I'm picking you got the 2 million to 28 million possible profit hit from

The results suggest that losses are manageable for
the banking system as a whole, despite dairy lending now accounting for 10 percent of all bank lending. Loss rates for the banking system
are estimated to be 2 percent of the system’s dairy portfolio under
the base scenario, and 14 percent under the severe scenario. These losses amount to around 2 to 18 percent of total before-tax profits of the five largest dairy lenders over a typical four year period (and a similar percentage of initial capital) suggesting that they are manageable for the system as a whole. It is also likely that capital ratios would come under pressure due to increases in risk-weighted assets.

[winner69]

ps.I thought it was you W69 who asked the question about diversity,but in hindsight you would have asked it Maori!!>> lol.

It was by far the best question/comment from shareholders wasn't it.And sadly not even one iota of response from the Chairman.

Rest of of the questions/comments were pretty shallow though, except for the guy who asked some questions about MTF

[percy]

The guy who asked the questions about MTF I thought was either an originator or a car dealer, as he knew what he was talking about.Interesting was Jeff Greenslade saying if they went further with MTF, then the "recourse" of loans would be a matter of negotiation.Would appear a lot of water has yet to flow under that bridge.
At a ChCh HNZ agm poster Mouse asked the chairman for each director seeking re-election to speak.Chairman Ricketts quickly cut him off by saying :"we don't do it that way here." Very rude,so it was with a certain amount of delight I noted Ricketts made mention that the Share Holders Assn would like to hear from directors seeking re-election.Ricketts noted in future they would do this,but as they had 8, instead of the usual 2 being re-eclected today. they would not do it for this meeting.
I must admit Chairman Ricketts keeps good control of meetings. He has a wealth of experience, and I note he is also a director of Suncorp in Australia.Holds a lot of shares too,so has skin in the game,as do the other directors.

[winner69]

From The Managing Director's [Mr.Jeff Greenslade] address to the HNZ AGM on 11/12/2015;
Rural Division.
"We remain well-positioned to support our dairy farmer customers and we currently have no expectation of losses as a result of the current dairy prices."
.

OK, I get the last part of that statement - we don't expect to have losses

But what does 'well positioned to support our dairy farmer customers' really mean? Maybe makes more sense if he just leftboutvthe well positioned bit and said 'we are supporting ..'

Or maybe ' well positioned to support' means we have plenty of shareholder cash to support them - like prop them up

Interesting that the Commerce Commissions are in a round about way saying that the fonterra loans should be really be a cost to the farmers and not a freebie. Wonder where that might go over time.

[percy]

OK, I get the last part of that statement - we don't expect to have losses

But what does 'well positioned to support our dairy farmer customers' really mean? Maybe makes more sense if he just leftboutvthe well positioned bit and said 'we are supporting ..'

Or maybe ' well positioned to support' means we have plenty of shareholder cash to support them - like prop them up

Interesting that the Commerce Commissions are in a round about way saying that the fonterra loans should be really be a cost to the farmers and not a freebie. Wonder where that might go over time.

I am sure Jeff put in the "well positioned" just for you and me, knowing full well how much pleasure we get from the phrase.
Yet the "we don't expect to have losses" is very clear.!
I sorry I am in two minds about Fonterra helping out at risk dairy farmers.Some excellent arguments for,and an equal number against.
I am however very keen for Heartland to help their at risk customers. Farmers have long memories, and will never forget the Bank that helped them when they needed help.I should point out Westpac helped me out some 40 years ago,and I have not forgotten that,yet.!

[forest]

[QUOTE=winner69;601205]OK, I get the last part of that statement - we don't expect to have losses

But what does 'well positioned to support our dairy farmer customers' really mean?

Dairy farmers/share milkers are as you realise a small part of the rural loan book.
Of the few who finding it difficult to repay the loans back as per contract or pay interest as per contract HNZ has a close look
at their financial situation.
If a new client would have applied for the level of dept as the defaulting client (similar dept application, history of earnings, equity etc)
and the new client would likely be approved for that loan. Then the existing client would be offered an concession, likely an extended term.
In this case the loan wont be in default.
However if a new client would not be able to secure a loan under similar circumstances the loan is considered in default.

I can see the logic of this approach.

[Joshuatree]

Thanks Forest; so thats supporting our current farmer clients with concessions to see them through the cycle and El Nino but not new entrants ?.How long this weak dairy pricing cycle lasts is the question i guess?

Just a reminder that HNZ changes ticker at the end of year to HBL. cheers JT

[Yoda]

Bol bands are at a bit of a squeeze.. And seems to have topped out. Anyone got a crystal ball or an educated guess?

[percy]

Bol bands are at a bit of a squeeze.. And seems to have topped out. Anyone got a crystal ball or an educated guess?

HNZ has been known to track sideways at times.
Resistance appears to be $1.34,while support is $1.30.
Break out will show which way the sp is headed.
I would guess [very uneducated] the high dividend yield,and HNZ's capacity to pay increasing dividends, will attract dividend seekers, and therefore the breakout will be on the upside,but I don't know when.