HGH - Heartland Group Holdings

[percy]

http://www.interest.co.nz/business/8...ainty-not-best

Happened to tumble across this one on interest.co.nz, which I frequent quite regularly....

Thanks for the link.
Another market being serviced by existing staff and channels.
Worth a go.

[kizame]

Would be interesting to know what sort of person would be interested in such a loan, 1. it's floating 2. it's not the greatest deal as far as interest rate goes.
Maybe a short term bridging loan? Hmmn but good luck to them,there are all sorts of people out there in all sorts of situations.
Most banks these days are pretty damn quick to organise a loan if you have everything hbl wants,crikey I did it on my phone in no time.

[winner69]

NBR confused with reverse mortgages where HBL see good growth potential. They are definitely not interested in any other mortgage market.

Appear they are eh

[iceman]

Would be interesting to know what sort of person would be interested in such a loan, 1. it's floating 2. it's not the greatest deal as far as interest rate goes.
Maybe a short term bridging loan? Hmmn but good luck to them,there are all sorts of people out there in all sorts of situations.
Most banks these days are pretty damn quick to organise a loan if you have everything hbl wants,crikey I did it on my phone in no time.

This is what the Deputy CEO said about type of customers being targeted: "What we can see is if we can acquire customers cheaply, customers who don't want the best rate, and are not at the risk end of the curve in terms of high LVR, but do value speed and certainty, then we think we'll be able to provide them a service they'll value," Flood said.

This is definitely quite a big change in strategy for HBL who have consistently said they do not want to be in the residential mortgage market. Percy we can´t say anymore that they " always do as they say they will" :-)

I am not sure about this new direction but time will tell. At least it sounds like they will not be spending any money on this as all will be done with existing staff through existing channels.

[percy]

This is what the Deputy CEO said about type of customers being targeted: "What we can see is if we can acquire customers cheaply, customers who don't want the best rate, and are not at the risk end of the curve in terms of high LVR, but do value speed and certainty, then we think we'll be able to provide them a service they'll value," Flood said.

This is definitely quite a big change in strategy for HBL who have consistently said they do not want to be in the residential mortgage market. Percy we can´t say anymore that they " always do as they say they will" :-)

I am not sure about this new direction but time will tell. At least it sounds like they will not be spending any money on this as all will be done with existing staff through existing channels.

I made a mistake.I thought like Scotty,Jeff Greenslade was talking about RELs, not usual mortgages.
So HBL are positioning themselves, where they said they would.Digital products delivered online.
They have made it very clear they want margin,by keeping the cost of delivering the product using existing staff and systems,and by safe guarding themselves with only floating rates.
Yes it seems to fit their suite of products,and if they can add yet another product at no extra cost,and make a margin, it is worthwhile.They are not trying to go head to head,with the major players .

[iceman]

They are not trying to go head to head,with the major players .

Which is exactly the reason I have always liked the idea that they´ve stayed out of the residential mortgages and focused very successfully on niche products that the majors are not offering. It will be interesting to watch how this goes for us.

[Baa_Baa]

I made a mistake.I thought like Scotty,Jeff Greenslade was talking about RELs, not usual mortgages.
So HBL are positioning themselves, where they said they would.Digital products delivered online.
They have made it very clear they want margin,by keeping the cost of delivering the product using existing staff and systems,and by safe guarding themselves with only floating rates.
Yes it seems to fit their suite of products,and if they can add yet another product at no extra cost,and make a margin, it is worthwhile.They are not trying to go head to head,with the major players .

Digital or not, they're putting $ at risk in a market they haven't previously overtly targeted, let alone through this online channel. It may work out fine, but shareholders usually don't like surprises, eh Percy? Rationalise it any way you want, but keep an eye open on this experiment. Maybe it's chump change for HBL going after this new opportunity, but it's your money and it is an experiment.

[percy]

Digital or not, they're putting $ at risk in a market they haven't previously overtly targeted, let alone through this online channel. It may work out fine, but shareholders usually don't like surprises, eh Percy? Rationalise it any way you want, but keep an eye open on this experiment. Maybe it's chump change for HBL going after this new opportunity, but it's your money and it is an experiment.

RELs are great margin mortgages.
So if HBL can do a residential mortgage,online, and make a good margin, lets do it.
In fact the way they are approaching it is a very low, or little risk,which shareholders appreciate..
They know the market,having arranged residential loans for Kiwi Bank.
It is about choice.Most people will shop around for the best fixed rate mortgage.HBL have said they are not in that space.Other people will go online, with a floating rate.HBL will be in that space. Bit like people being happy to pay extra at New World, for a product that is cheaper at Pak'n Save.

[winner69]

I look forward in a few years time to Snoopy's analysis as to how residential mortgage lending has lowered Heartlands Net Interest Margin from the current lofty 4% plus to whatever it ends up at

Could lower NIM significantly if Flood's dream comes true ....... "The market is enormous. if we had $1 billion of residential mortgages suddenly then that's hugely transformational for Heartland and will make a real difference. And I kind of think $1 billion of residential mortgages, the market probably wouldn't notice."

[winner69]

I would hazard it a guess that Jeff still looks out his office window at the cranes on the skyline and then on the way home driving past new subdivisions salivates over the potential in lending to property developers just like the good old days.

Huge opportunity for Heartland and I believe finance getting harder to getbat the moment .....so becoming niche.

Could retask some not so busy people to make it worth while

Only a matter of time before Heartland back in this sector - just too tempting