sharetrader
Page 757 of 1722 FirstFirst ... 2576577077477537547557567577587597607617678078571257 ... LastLast
Results 7,561 to 7,570 of 17213
  1. #7561
    percy
    Join Date
    Oct 2009
    Location
    christchurch
    Posts
    17,222

    Default

    So today HBL still have $64mil of "surplus" capital,and strong eps growth..
    They also have a supportive shareholder base,who have shown they will advance more capital if the acquisition/s are worthwhile.
    They are therefore the envy of all Australasian financial institutions.

  2. #7562
    Reincarnated Panthera Snow Leopard's Avatar
    Join Date
    Jul 2004
    Location
    Private Universe
    Posts
    5,853

    Angry The commencement of proceedings

    Quote Originally Posted by Snoopy View Post
    ...PT was of the opinion that any capital over and above the minimum reserve bank requirements should be regarded as 'surplus capital'....
    Snoopy
    The Dog House
    Lower New Zealand

    Dear Canine

    With reference to the above quote from your recent post I refer you to this post: [http://www.sharetrader.co.nz/showthr...=1#post620346] where the Paper Tiger clearly clarified the meaning of his statement.

    Your willful, deliberate & repeated misinterpretation of the Paper Tiger's generous guidance to you through your impossible task of trying to prove that a perfectly sound bank hereafter called Heartland Bank is a bit of a fizzer leaves the Paper Tiger no options.

    Therefore you are challenged to a duel at 9am tomorrow (Saturday 28th May 2016) above the fields of Wanaka. The choice of World War I fighter planes is yours.

    On behalf of the Paper Tiger
    Manfred

    PS. The Baroness says thanks for the scone recipe and asks can you use fruit instead of the cow's liver?
    om mani peme hum

  3. #7563
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,223

    Default

    Quote Originally Posted by Paper Tiger View Post
    Snoopy
    The Dog House
    Lower New Zealand

    Dear Canine

    With reference to the above quote from your recent post I refer you to this post: [http://www.sharetrader.co.nz/showthr...=1#post620346] where the Paper Tiger clearly clarified the meaning of his statement.
    I read your referred post again PT, saw no clarification and came to the same conclusions as before. Namely:

    1/ "Minimum total capital in as per the conditions of registration" is the most restrictive covenant monitored by the Reserve Bank.
    2/ "Minimum total capital' as a capital ratio should be 8% plus a 2.5% 'buffer', making a total of 10.5%.
    3/ 'Total capital expressed as a percentage of risk weighted exposure' was 14.46% (HY2016) and 13.76% (HY2015), or 'about 14%' in round figures.

    Now 14% is well clear of 10.5%. But you PT, expressed no opinion as to whether you considered 14% or 10.5% as an acceptable capital ratio. Where no opinion is expressed between two restrictive figure standards, I assumed that you meant the lower reserve bank figure was the standard you adhere to, and the actual 14% figure (being greater than 10.5%) constitutes 'a pass' by your standards.

    Another possible interpretation is that you meant around 14% was your acceptable TCR standard. But if that was the point you were trying to make, then why mention the 10.5% TCR at all?

    Your willful, deliberate & repeated misinterpretation of the Paper Tiger's generous guidance to you through your impossible task of trying to prove that a perfectly sound bank hereafter called Heartland Bank is a bit of a fizzer leaves the Paper Tiger no options.
    Not saying Heartland is a fizzer. If I held now I would probably keep holding. But since I don't hold, I am looking for the cheapest possible acquisition price I can get. And my sniff tells me that HBL shares might be cheaper around the time of the next capital raising. And make no mistake, if HBL purchase MTF or UDC, there will be a next capital raising!

    Therefore you are challenged to a duel at 9am tomorrow (Saturday 28th May 2016) above the fields of Wanaka. The choice of World War I fighter planes is yours.

    On behalf of the Paper Tiger
    Manfred
    9am dogfight in Wanaka means a very early start when I lift off from Peter Jackson's fighter collection in Blenhiem! Ice on the wings, and I just might be caught. Nice try Monsieur Baron Rouge, but I have learned my lesson from Christmas time.

    SNOOPY
    Last edited by Snoopy; 27-05-2016 at 06:38 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  4. #7564
    percy
    Join Date
    Oct 2009
    Location
    christchurch
    Posts
    17,222

    Default

    [QUOTE=Snoopy;622457]
    Not saying Heartland is a fizzer. If I held now I would probably keep holding. But since I don't hold, I am looking for the cheapest possible acquisition price I can get. And my sniff tells me that HBL shares might be cheaper around the time of the next capital raising. And make no mistake, if HBL purchase MTF or UDC, there will be a next capital raising!

    Heartland already have the balance sheet capacity to takeover MTF.
    UDC.Heartland would need to raise capital.And yes buying shares at a capital raising is usually a good time.BUT,if HBL were to takeover UDC it would be a "game changer" for HBL,and I would think there would be institutions/funds managers who would rerate HBL,so the chances of buying HBL shares at a discount may not happen.
    Go to www.chrislee.co.nz and read "taking stock".If he is right HBL could takeover UDC raising very little capital,which would see HBL rerated straight away.
    With directors/management being very large HBL stake holders, neither acquisition will be done unless it is in HBL's interest.They have always stated they do not want to be the biggest bank,just the best.!
    Last edited by percy; 28-05-2016 at 07:04 AM.

  5. #7565
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,223

    Default

    Quote Originally Posted by percy View Post
    UDC.Heartland would need to raise capital.And yes buying shares at a capital raising is usually a good time.BUT,if HBL were to takeover UDC it would be a "game changer" for HBL,and I would think there would be institutions/funds managers who would rerate HBL,so the chances of buying HBL shares at a discount may not happen.
    Go to www.chrislee.co.nz and read "taking stock".If he is right HBL could takeover UDC raising very little capital,which would see HBL rerated straight away.
    Here is the small excerpt from Chris Lees's article relating to a possible takeover of UDC by Heartland.

    ----

    Heartland would achieve the most synergies and would know the market better than any other potential buyer. It might need to raise perhaps $100 million of new capital through a rights issue and a similar sum through a Tier One bond issue, to digest the cost of UDC, which I would guess to be in the area of $400 million.

    I reach this figure by beginning with UDC’s sustainable profit, maybe $50 million, and deducting from it the extra profit provided by the ANZ “subsidy” of super-cheap funding and the implicit guarantee.

    The real sustainable profit may be $30 million after these deductions.

    A multiple of 12-15 might then get you a sale price range of $360 million to $450 million, say $400 as a mid-point.

    ----

    The latest UDC results can be found here:

    https://www.udc.co.nz/pdf/UDC_Prospectus_69.pdf

    This shows NPAT of $57.05m for UDC

    Heartland in FY2015 had selling and administration expenses of $68.403m (Heartland FY2015 report 'Selling & Administration Expenses', note 5). UDC had total operating expenses of $32.278m (UDC prospectus note 4). That is a difference of $36.125m. I would consider that $36.125m as a measure of services provided to UDC, who do not have a branch network, from ANZ.

    So taking a tax adjusted figure of those expenses from the declared UDC profit, I get an adjusted independent UDC profit of:

    $57.05m - (0.72 x $36.125m) = $31.04m

    That is very close to Chis Lee's figure, but using a different way of assessing any implicit 'subsidy' by ANZ.

    Using a 'mid point' PE of 13.5 I get a value for UDC of:

    13.5 x $31.04m = $425m

    Yet NTA at balance date was only $365m. And NTA is the figure that New Zealand's greatest ever banker, Sir John Anderson, used when he sold PGGW Finance to Heartland all those years ago.

    So is a sale price of $365m to $425m doable for Heartland? Why does Lee say Heartland only need $100m of capital (and the rest borrowing?) to do this? $100m of new capital looks a little light to me.

    SNOOPY
    Last edited by Snoopy; 28-05-2016 at 01:22 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  6. #7566
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,223

    Default

    Quote Originally Posted by percy View Post
    Heartland already have the balance sheet capacity to takeover MTF.
    A short excerpt from the Chris Lee article regarding MTF

    ----

    The Commerce Commission found against MTF, then the High Court found against MTF, the Court of Appeal found against MTF and now the Supreme Court has confirmed that MTF has no further right of appeal.

    The next step is to discover how many thousands of MTF hire purchase clients must be refunded hundreds of dollars.

    Over many years, the client numbers could be in tens of thousands.

    If there were 20,000 refunds at $250 per borrower, the amount repayable would be $5,000,000.
    The scale of the problem may well be greater.

    Will that bring MTF’s real value to a figure that makes it a takeover target?

    -------

    Have not examined the MTF accounts closely, but Lee could be on the money here. Not happy reading for MTF stakeholders, buy HBL would not want to get offside with Turners. Turners could pull their MTF business and divert it to their own in house finance commpanies. Another potential body blow for any MTF buyer?

    SNOOPY
    Last edited by Snoopy; 28-05-2016 at 12:23 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  7. #7567
    percy
    Join Date
    Oct 2009
    Location
    christchurch
    Posts
    17,222

    Default

    We certainly live in interesting times.
    For fun HBL agree to buy UDC for $400 mil.
    A bond issue of $100mil.
    An underwritten renounceable rights issue of 2 for 10 at $1.20 [which would raise over $110mil].
    What would HBL's sp be, and what would the rights trade at.??
    ps Chris Lee may also be a low high jumper.Better being that than a lost marathon runner.lol.
    TNR.I think TNR have more to gain from a HBL takeover of MTF than HBL have in losing TNR's business.If Byrne is his usual smart self, he will tie up a rosy deal for TNR.You must remember MTF have recourse on the "originator"should any of their loans go bad.This contingent liability is why shareholders [including TNR] will be keen on a HBL takeover.
    Last edited by percy; 28-05-2016 at 12:29 PM.

  8. #7568
    Speedy Az winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    37,739

    Default

    Quote Originally Posted by percy View Post
    We certainly live in interesting times.
    For fun HBL agree to buy UDC for $400 mil.
    A bond issue of $100mil.
    An underwritten renounceable rights issue of 2 for 10 at $1.20 [which would raise over $110mil].
    What would HBL's sp be, and what would the rights trade at.??
    ps Chris Lee may also be a low high jumper.Better being that than a lost marathon runner.lol.
    Nbt and me say $1.60
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  9. #7569
    percy
    Join Date
    Oct 2009
    Location
    christchurch
    Posts
    17,222

    Default

    Quote Originally Posted by Snoopy View Post
    A short excerpt from the Chris Lee article regarding MTF

    ----

    The Commerce Commission found against MTF, then the High Court found against MTF, the Court of Appeal found against MTF and now the Supreme Court has confirmed that MTF has no further right of appeal.

    The next step is to discover how many thousands of MTF hire purchase clients must be refunded hundreds of dollars.

    Over many years, the client numbers could be in tens of thousands.

    If there were 20,000 refunds at $250 per borrower, the amount repayable would be $5,000,000.
    The scale of the problem may well be greater.

    Will that bring MTF’s real value to a figure that makes it a takeover target?

    -------

    Have not examined the MTF accounts closely, but Lee could be on the money here. Not happy reading for MTF stakeholders, buy HBL would not want to get offside with Turners. Turners could pull their MTF business and divert it to their own in house finance commpanies. Another potential body blow for any MTF buyer?

    SNOOPY
    I am sure HBL's legal team have been through the judgement 100 times.
    The case was MTF "Sportzone" only. The liability was under $10,000 for the 21 deals over a period of a couple [ or three] years.
    So what is the liability? I don't know.It is very vague.Big difference between $10,000 and $5mil.!
    Has the CC made its point,and leave it at that?.[I think the point was made years ago when the CC first took MTF to court]
    Last edited by percy; 28-05-2016 at 01:26 PM.

  10. #7570
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,223

    Default Customer Concentration Test HY2016

    Quote Originally Posted by Snoopy View Post
    I am rather overdue for our once a year peak into customer ‘asset distribution’ and ‘asset quality’. Our concentration test is that:

    Highest single new customer group exposure (as a percentage of shareholder funds) <10%

    Regional Risk

    From AR2015 Note 18b, the greatest regional area of credit risk in dollar terms is Auckland, with $830.027m worth of assets. This represents:

    $830.027m/ $3,234.025m = 26% of all loans

    This is slightly up on FY2014. But I don’t rate that concentration of loans in Auckland as being an issue. Particularly so when ‘Auckland’ is such a varied catch all group.

    Industry Group Risk

    From AR2015 Note 18c, the greatest 'business group' risk in dollar terms is Agriculture, with $537.286m worth of assets. This represents:

    $537.286m/ $3,234.025m = 17% of all loans

    This is slightly up on FY2014, when agriculture was

    $469.020m/ $2,891.597 = 16% of all loans

    Both these figures are quite high and trending in the wrong direction for FY2015. Given that Heartland is nominally a specialist agricultural lender I wouldn't be too concerned. But if agricultural loans go above 20% of the total (or dairy representing about half the agricultural loans above 10%), then I would sound an alarm bell. This situation will need careful watching when the FY2016 result details are released IMO.

    Now a word on Asset Loan Quality.

    Looking at Note 19d, the Grade 6 monitor assets have come down from $115.76m to $99.849m. Good news!

    Next, the sum of the grade 7, 8 and 9 assets is now $26.533m, down from $31.765m. This is a useful improvement.

    When these loans appear on the balance sheet, they are netted off against provisions for impaired assets already made. The provision for collectively impaired assets is now $10.201m, up from $6.999m. So a few more losses have been 'taken on the chin'.

    The $8m ‘fair value adjustment for present value of future losses’ in FY2014, has reduced to $6.242m in FY2015. This provision relates to the Home Equity Release Loans acquired in FY2014. I cannot explain why this reduction has occurred

    Overall, ‘problem assets’ (grade 6, 7, 8 and 9 combined) total $126.382m. This is down 14% on the $147.591m recorded in FY2014.
    Updating these risk calculations based on the last half year reporting date, using figures found here.

    http://shareholders.heartland.co.nz/...ment-dec15.pdf

    Our test requirement is:

    Highest single new customer group exposure (as a percentage of shareholder funds) <10%

    Regional Risk

    From reference Note 12b, the greatest regional area of credit risk in dollar terms is Auckland, with $779.242m worth of assets. This represents:

    $779.242m/ $3,237.047m = 24% of all loans

    This is two percentage point reduction on FY2014. Still high. But I don’t rate that concentration of loans in Auckland as being an issue. Particularly so when ‘Auckland’ is such a varied catch all group.

    Industry Group Risk

    From reference Note 12c, the greatest 'business group' risk in dollar terms is Agriculture, with $570.735m worth of assets. This represents:

    $570.735m/ $3,237.047m = 18% of all loans

    This is slightly up on FY2015, when agriculture was

    $537.286m/ $3,234.025m = 17% of all loans

    These figures are quite high and continue trending in the wrong direction for HY2016. Given that Heartland is nominally a specialist agricultural lender I wouldn't be too concerned. But if agricultural loans go above 20% of the total (or dairy representing about half the agricultural loans above 10%), then I would sound an alarm bell. This situation will need careful watching when the FY2016 result details are released IMO.

    Now a word on Asset Loan Quality.

    In the half year result, ther is no breakdown of the 'judgement loan' category of lending. Judgement loans consist of business an rural lending, the latter in particular of interest in this climate of dairy industry turmoil. This means that accounting provisions on dairy loans are largely hidden in these half year accounts.

    In the half year presentation p14, Rural impairments are up $0.3m to $0.4m, "which remains very low." Total impairments across all loan categories are now $5.6m. I wonder how realistic that rural sector provision is given a very recent Fronterra milk solid payout forecast of $4.20? I would be happier if the rural provisioning at Heartland was higher! But all will be revealed when the greater disclosure on these judgement loans is released at the full year reporting date.

    When these loans appear on the balance sheet, they are netted off against provisions for impaired assets already made. The provision for collectively impaired assets is now $12.029m, up from $10.201m at full year balance date. This has risen largely because new provisions have exceeded actual write offs over the last six months.

    The $5.599m ‘fair value adjustment for present value of future losses’ in HY2016, is slightly reduced compared to the $6.242m for all of FY2015. This provision relates to the Home Equity Release Loans acquired in FY2014. I believe this provision is a requirement of accounting standards and in the past has overestimated actual losses. So is this an indicator of HBL writing net less home equity release business going forwards? IOW their home equity release portfolio is unwinding as it shrinks, in real terms? I note that the interim presentation p19 states "steady increase in new business" but "high repayment levels".

    SNOOPY
    Last edited by Snoopy; 01-05-2017 at 06:36 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

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
  •