sharetrader
Page 688 of 688 FirstFirst ... 188588638678684685686687688
Results 13,741 to 13,750 of 13750
  1. #13741
    Member
    Join Date
    Feb 2020
    Location
    Nelson
    Posts
    432

    Default

    Heartland's internet banking UI could do with a bit of an update but other than that they're doing pretty ok in the digital area I think.

  2. #13742
    Legend
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    7,116

    Default

    Quote Originally Posted by winner69 View Post
    Snoops

    I think you will find that Heartland’s equity in Harmoney is treated as an Investment in Equities and that equity as such is ‘valued’ each year with any change in that value going through Income Statement.

    Heartland don’t pick up their ‘share of Harmoney’s profit’ in their accounts. They do not equity account Harmoney’s earnings.

    The lending done through Harmoney is done in Heartland’s name (just like others using the platform) and it is those loans that Heartland shows in their books. Harmoney is just a shopfront Heartland use.

    I admit I haven’t delved too deeply into Heartland’s account to say that’s how it’s done but it appears so but willing to stand corrected if this is a load of the proverbial.
    This is what I have previously mused about the relationship between Heartland and Harmoney.

    Quote Originally Posted by Snoopy View Post
    Heartland own just 13.1% of Harmoney. But 'ownership' and 'providing capital with which to make loans' are two different things, And I think Heartland do both of those things for Harmoney.
    I think you have just said you agree with that statement at least Winner. But here is where my thinking on Harmoney has become a little confused.

    When Harmoney was a 'peer to peer' lender, there was a very clear division between one set of customers supplying loan capital, another set of customers taking borrowing capital and Harmoney clipping the ticket for bringing the parties together and administrating the loans. Now the retail customers supplying loan capital have been discarded, but the retail 'borrowing' customers are still there. Big players, the likes of Heartland, have replaced retail customers as the supplier of loan capital. So as part owners of Harmoney, Heartland are supplying loan capital AND clipping their own loan ticket. When Heartland talk about 'Harmoney & Other Consumer Loans' they are talking about the former conduit of income, not the latter. I would argue it is misleading to report like this, just like it would be misleading to label 'Motor Vehicle Finance' as 'Kia & other Motor Vehicle Finance'. Because although Kia might now be Heartland's biggest motor vehicle loan customer, the Kia loans are in essence no different to other motor vehicle loans. Likewise from a 'Consumer Loan' perspective, there is nothing to distinguish a Harmoney consumer loan from any other consumer loan as far as Heartland is concerned from an operational perspective. 'Harmoney & Other Consumer Loans' should just be called 'Consumer Loans' and that simple 'switch of label' would make the accounts much easier to understand.

    The actual Heartland earnings from the Harmoney entity, resulting from Heartland's 13.1% equity stake, are in fact hidden in Note 11 of the annual accounts for FY2020. Note 11 is labelled 'Investments' and a sub-category of that is labelled 'equity investments'. Heartland's 13.1% Harmoney sake is part of this $16.335m 'equity investment' total. We are further referred on to Note 20 for a description as to how this equity is treated:

    "Fair value for details of the split between investments measured at fair value through profit or loss, fair value through other comprehensive income and amortised cost."

    From Note 20 we learn

    "The fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments, the Group determines fair value using other valuation techniques."

    Harmoney is not a listed entity as I write this. So it is the last sentence in the quote above that applies. Further on in Note 20 we learn that in valuing such assets Heartland use:

    "Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)."

    It sounds to me on this basis that Heartland are able to make up the value of Harmoney on their books to be whatever they like, by choosing whatever 'unobservable inputs' they deem fit

    "Investments in unlisted equity securities are classified as being fair valued through profit or loss and are valued under Level 3 of the fair value hierarchy, with the fair value being based on unobservable inputs."

    No more explanation is given. But I am imagining that the unobservable inputs that cause an annual change in the value of the Harmoney stake are taken into the Heartland statement of Comprehensive income 'somewhere' but are not labelled as anything to do with Harmoney in the Heartland accounts. Is that how you see it working Winner?

    SNOOPY
    Last edited by Snoopy; 21-09-2020 at 02:22 PM.
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  3. #13743
    Junior Member
    Join Date
    Apr 2020
    Location
    New Zealand
    Posts
    21

    Default

    Capital Adequacy and Risk
    From each banks latest public reports (Basel III)
    Date
    Bank CET1 % Tier1 % Total %
    YoY Ratio Growth/Decline
    12/08/2020 CBA 11.6 13.9 17.4 Positive
    19/08/2020 ANZ 11.1 12.9 15.8 Positive
    18/08/2020 WBC 10.8 12.86 15.99 Positive
    31/03/2020 NAB 10.39 11.96 14.61 Negative
    20/06/2020 HGH 12.67 12.67 12.67 Negative

    I used the ASX parent companies for the above comparisons vs. HGH, these are all from the own banks most recent disclosure statements

    Heartland quoted Tier 2 capital as zero in the past two years disclosures, this is where the discrepancies above are between the big four and Heartland.

    Heartland specifically call out in page 64 of their latest disclosure statement that they may need to look at Tier 2 capital, or capital raising to meet the new 16% capital adequacy framework in the far distant future.

    Bank
    Credit Rating
    (Fitch)
    Current PE
    (Yahoo)
    Current Yield %
    (Yahoo)
    Pre-Covid19 Yield%
    (SimplyWallSt)
    CBA AA- 12.17 3.04 6.4
    ANZ AA- 11.53 2.93 7.9
    WBC AA- 12.25 0 7.5
    NAB AA- 15.01 6.54 7.5
    HGH BBB 9.14 8.73 9

    One thing that makes heartlands yield even more attractive is that the dividend is currently fully imputed, vs. the Australian banks which have historically only had small imputation credits attached.

    Fun Fact: More MP's in Parliament own HGH shares than any other publicly traded company.

    I'm not trying to fear monger, and I don't think anyone owning this stock should lose any sleep about owning it at present, just trying to add some balance to the discussion. Personally I believe HGH is significantly higher risk than CBA and quite a lot higher risk than WBC or ANZ.

    I totally agree with comments from multiple people around higher risk vs. higher rewards for HGH.

  4. #13744
    Possum in the headlights Beagle's Avatar
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    16,869

    Default

    I added a few more today at $1.27 cum the 2.5 cent final divvy, fully imputed as always. I don't see it as any riskier than any of the Australian banks and the lack of any meaningful, (almost nothing or nothing at all) imputation credits from the Aussie banks means Kiwi's are ostensibly being taxed twice on the income the bank makes, (company pays tax in Australia at 30% and you pay it as well on the dividends often at 33% for many taxpayers). I'm not a big fan of double taxation as there's not much of a meal left after both the Australian and N.Z. Govt have both taken a big bite of the pie.
    No butts, hold no mutts, (unless they're the furry variety).

  5. #13745
    Legend peat's Avatar
    Join Date
    Aug 2004
    Location
    Whanganui, New Zealand.
    Posts
    5,474

    Default

    Quote Originally Posted by Beagle View Post
    I'm not a big fan of double taxation
    So droll if you dont mind me saying so

    You'll love the GST on your property rates
    For clarity, nothing I say is advice....

  6. #13746
    Member
    Join Date
    Mar 2020
    Location
    In the trough
    Posts
    495

    Default

    Quote Originally Posted by peat View Post
    So droll if you dont mind me saying so

    You'll love the GST on your property rates
    GST on top of fuel taxes is my personal favourite :-)

  7. #13747
    Legend
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    7,116

    Default Rural Loans: FY2021

    Quote Originally Posted by Snoopy View Post

    Rural finance

    No change
    Quote Originally Posted by Beagle View Post
    It was good to see HGH's rural lending down 10% in their report. Unwinding of their low margin lending in this very cyclical sector makes good sense when the dairy payout is over $7.
    Heartland's rural loans consist of two distinct parts. There are the:

    1/ 'Rural Relationship Loans' where Heartland is involved in financing the whole farm, and
    2/ 'Livestock Finance' where Heartland is financing the acquisition of animals for seasonal fattening up, with no security pledge over any other assets bar the animals themselves.

    Heartland have had a policy of reducing '1' and expanding '2'. Given the relatively positive outlook for farmed commodities (bar wool), the the continued reduction in farm financing in NZ by the big four banks (under instruction form their Australian parents to reduce NZ farm exposure), i am slightly surprised the 'Rural Relationship Lending' policy at Heartland has not been reversed (just as Heartland are once again offering regular house mortgages to city folk).

    Rural Relationship Loans were $535m on the FY2019 balance date, down to $490m on the FY2020 balance date. Over FY2019 these loans only offered an averaged 6% ROE.
    So the reduction in profit after tax fro these loan losses, based on the $45m gross loan value reduction would be:

    0.06 x $45m = $2.7m

    Livestock loans have been more profitable on an averaged 13% ROE But Livestock Receivables are unfortunately down as well from $122m at FY2019 year end down to $115m at EOFY2020. So the profit loss on livestock loans I estimate to be:

    0.13 x $7m = $0.9m

    This downturn cannot be blamed on the weather or Covid-19 either, as the likes of PGG Wrightson with their 'GoLivestock' finance program , increased the value of animals funded from $47.8m to $48.1m over the same comparative period.

    As you can see from my 'quote bubble' above, I hadn't accounted for either of these earnings reductions in my previous modelling projections.

    SNOOPY
    Last edited by Snoopy; 21-09-2020 at 10:39 PM.
    Industry shorthand sees BNZ employees still called 'bankers' but ANZ employees now called 'anchors'. Westpac has opted out of banking industry shorthand...

  8. #13748
    Investor
    Join Date
    Jul 2014
    Posts
    4,013

    Default

    https://www.interest.co.nz/banking/1...pular-and-bank

    Heartland Bank CEO Chris Flood says online home loan 'trial' proved popular and bank will relaunch offers once interest rates settle down

  9. #13749
    Member
    Join Date
    Mar 2020
    Location
    great barrier island
    Posts
    354

    Default

    Heading back to $120.strange with divie coming up?

  10. #13750
    Member
    Join Date
    Mar 2020
    Location
    In the trough
    Posts
    495

    Default

    Quote Originally Posted by nevchev View Post
    Heading back to $120.strange with divie coming up?
    Markets are generally taking a well deserved breather at the moment. Dow was down 500 points last night. Nothing to see here.

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •