-
28-02-2016, 09:38 PM
#7161
Originally Posted by winner69
Heartland announcement said this -
Given continued market interest in the dairy sector in New Zealand, Heartland advises that its direct exposure to dairy farmers is 8% of its total lending book as at 31 December 2015. The average loan to value ratio (LVR) for Heartland’s dairy is 57%
Good to see them still lending in an industry that has a bright future. As Heartland says ' cautious approach to new lending, but remain open to new customers and supportive'
Dairy exposure pretty low at 8% of receivables - say $234m
But it's LVR at 57% that's the real good news. Previous number they quoted was 61% so 57% is pretty amazing seeing farm prices are down.
Just shows that even though total loans are up the quality of those loans appear to be much stronger. Incredible really. This is reflected in a pretty minimal increase in impairments as well.
Seems all honky dory down on the farms that Heartland have an exposure to .....and Heartland prospering from it
Just wondering how to factor in the loans the dairy farmers have to Fonterra ? Surely with extra debt it will make the serviceability a lot harder on their bank loans ? LVR might be better in the above picture however the overall situation has to be worse .
-
29-02-2016, 08:19 AM
#7162
Originally Posted by kiora
You are assuming the loans are secured against land,sometimes they are on livestock and plant.
What has happened to stock and plant prices?How have they valued them?
How have they assessed land values?
Kiora - You would have to assume that an institution of such good standing as Heartland has a robust and proper methodology to come up with a number like 57% LVR
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
-
29-02-2016, 08:44 AM
#7163
I have doubts from a practical viewpoint that they would really force their dairy customers to get fresh valuations every single year. If a customers account was badly in arrears or under review I can certainly understand that it would be reasonable to ask the customers for fresh valuation reports.
Last edited by Beagle; 29-02-2016 at 08:49 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
-
29-02-2016, 10:08 AM
#7164
Its not just Dairy... it is the actual effect on the wider rural loan base which concerns me, I see wider rural financial distress showing now up everywhere, nine months after this started, for instance a larger commercial pump service and installer discussing dairy and wider farm accounts that have been dragging on for 9 months now. His bank is now demanding more reporting. Beef is also not great and many other farms have part dairy exposure as well, directly and indirectly. I initially picked on HB as it has a broad wider rural base and in my opinion the service sector to the farmers are where the real scale of the problem does lie.
-
29-02-2016, 11:38 AM
#7165
Originally Posted by Raz
Its not just Dairy... it is the actual effect on the wider rural loan base which concerns me, I see wider rural financial distress showing now up everywhere, nine months after this started, for instance a larger commercial pump service and installer discussing dairy and wider farm accounts that have been dragging on for 9 months now. His bank is now demanding more reporting. Beef is also not great and many other farms have part dairy exposure as well, directly and indirectly. I initially picked on HB as it has a broad wider rural base and in my opinion the service sector to the farmers are where the real scale of the problem does lie.
Possibly the best barometer we have for rural servicing is PGW.
Their lastest result was not flash,be neither was it doom and gloom.
Their exposure to dairying is approx. 24% compared to HBL's under 8%,
I did sell my Tru-Test and PGW some time ago for the very reasons you pointed out.
Last edited by percy; 01-03-2016 at 07:00 AM.
-
01-03-2016, 05:04 PM
#7166
Up 2 . But good to see some buying going on and not the relentless selloff of the last few weeks. The tide may be turning.
-
02-03-2016, 06:56 AM
#7167
-
02-03-2016, 10:39 AM
#7168
Originally Posted by K1W1G0LD
Up 2 . But good to see some buying going on and not the relentless selloff of the last few weeks. The tide may be turning.
It has turned
Will be $1.20 by end of week
And $1.30 by Easter
Enriching times
Last edited by winner69; 02-03-2016 at 02:31 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
-
02-03-2016, 02:14 PM
#7169
Originally Posted by winner69
It has tuned
Will be $1.20 by end of week
And $1.30 by Easter
Enriching times
You can tune a Piano Winner, but you can't Tuna fish.
-
02-03-2016, 02:33 PM
#7170
Originally Posted by K1W1G0LD
You can tune a Piano Winner, but you can't Tuna fish.
...bit its like a well tuned rocket engine to take off big time
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Tags for this Thread
Posting Permissions
- You may not post new threads
- You may not post replies
- You may not post attachments
- You may not edit your posts
-
Forum Rules
|
|
Bookmarks