HGH - Heartland Group Holdings

[GRIFFIN]

Come on guys you no the drill you turn up on the john Deere with ya Swani on unless yer one of those soft hand townies.

[GRIFFIN]

Oh and by the way Heartland actually own the John Deer and i think maybe even the Swani .

[percy]

Come on guys you no the drill you turn up on the john Deere with ya Swani on unless yer one of those soft hand townies.

Yeah right on the money.Best I can do is use "Country Air" room freshener as my after shave.!!!! lol.

[GRIFFIN]

Good one percy you may not know it but you can actually get a spray that smells like old fermented silage which a lot of town boys use to smell more macho, but us country boys just smear our selves in udder cream works a treat. Go Heartland.

[blobbles]

Looks like all those wanting a nominal divie just got their wish 1.5c ex Dec 14!

[blobbles]

Ha haa, check out their AGM presentation page 16 "Bank Registration Update", followed quickly by "Strategy Update". Nothing to say on that matter...

[blobbles]

Looks like good news as far as I am concerned.

Some good points as I see it:
They are looking for greater balance in their loan books - great for stability longterm.
The statement "Our emphasis is on cash flow and the drivers of productivity", in some ways, I would hope so, but again points to a higher stability strategy (better future ratings) if they pull it off.
They are creating new products aimed at retail sector (education/security&income/health/retirement) which will be interesting to see how they turn out... these sound innovative at least

Concerns:
Day to day banking (outsource) - does this mean they let some other bank handle their general account/back office banking functions? This seems to be a rather large risk... anyone at the AGM care to indicate where they are going with this? Does this answer the question about their IT systems any? Maybe they aren't investing in one themselves (which would be rather silly I would think) but are relying on others to provide?

[GTM 3442]

Concerns:
Day to day banking (outsource) - does this mean they let some other bank handle their general account/back office banking functions? This seems to be a rather large risk... anyone at the AGM care to indicate where they are going with this? Does this answer the question about their IT systems any? Maybe they aren't investing in one themselves (which would be rather silly I would think) but are relying on others to provide?

Real banking systems are big and expensive.

A number of smaller players use (say) Westpac to provide their core banking systems, as well as card processing.

[blobbles]

Real banking systems are big and expensive.

And as they are looking at becoming a real bank, I would expect that an investment in their own infrastructure to be a smart thing.

Buying a banking system from an international vendor now wouldn't be such a bad idea with the high NZ $$ it shouldn't cost you too much. Also with a small customer base, transferring them over to a new system isn't going to be enormously costly. Doing these things in 3-5 years time however would be dramatically more costly, I would think, as the NZ dollar probably won't be as high as it is (I am prepared to eat those words) and they will probably have many more customers and product offerings. As an IT guy that has been working on the ANZ/National Bank transition, I do have some cred when it comes to these statements!

As they look to add new products to their offerings, it does make me wonder what IT system they have backing their ability to do so. They obviously have something now, but it doesn't sound like its a full blown system. Early investment in sound IT infrastructure for a new bank is an investment in their future. Under investment is likely to damage them.

With a few dozen million in the bank, they could probably purchase/migrate customers over to their own system which is under their control and/or buy the extra modules to turn your system into a fully blown one. It is also likely to lower their institutional risk which would make them a (hopefully) more stable and profitable banking platform. Using a vendor as your core system provider though... you can only offer similar offerings to those that are offered by your vendors bank, essentially you are stuck in their business. You are also a competitor to the person providing your service, not really a good position to be in.

[percy]

A very positive well attended AGM.Tone of the meeting was good.Chairman let the meeting flow.The presentations were excellent.Questions from the floor were answered well.A friendly meeting.The chairman said they were looking at a number of acquisitions opportunities.
Balance.The chairman said a growing lending book will result in negative cashflow and said note 12 in annual report tried to set this out.
Plenty of space for HNZ in their markets without taking on the major banks. Low profile is because they decided to save their advertising money until the banking licence.Then they will go for it.
Good to run into Forest and his wife.
Sometimes I have been concerned I have pushed HNZ too much on sharetrader,[may be bias ?].Well after today's agm I feel vindicated,and any one buying on my say so;,you have done the right thing.A very well run company,strong depositor base,good clients,doing well in the sectors they want to be.Good board,good MD,who is keen to get return on equity into double didgets as soon as possible.A company that knows where they are want be and how they are going to get there.STRONG BUY>