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03-04-2021, 12:16 PM
#14511
Originally Posted by ziggy415
Rereading half yearly report " interest from leading aggregators regarding Australian reverse mortgage book "
Sometimes I like to reread the source material others quote to get some context. If the reference is incorrect this becomes difficult. In fact the above quote is not from the half yearly report, because at the time of writing no such separately titled Half Year Report has been issued. I did find the above quote but it was in the 'Half Year Result Press Release' on page 8, which is a different document.
Originally Posted by ziggy415
....and also " growing aussie reverse mortgage organically and inorganiclly "
Likewise the above quote is from yet another document, the Half Yearly Presentation (not the Half Yearly Report) on Slide 27.
Originally Posted by ziggy415
does this mean someone buying the debt and giving heartland money up front and the inorganic growth mean buying other banks reverse mortgage portfolio...several banks that used to offer reverse mortgages but don't now ...with policies still on books and returns getting less and costs per customer climbing..( Westpac) spring's to mind....announcement 2nd half of financial year..
I would interpret 'Organic Growth' as the growth as a result of normal business operations. In the case of Reverse Mortgages it is not clear what this means. Because even if no new Reverse Mortgages are issued the compounding interest on the existing reverse mortgages will ensure that at least in the medium term the Reverse Mortgage business will continue to organically grow. Yet somehow I suspect organic growth would include the writing of new Reverse Mortgages through established distribution channels.
By 'Buying debt and giving Heartland money up front', I think you are referring the process of loan securitisation. I think that is different to 'Organic Growth'. Loan securitisation refers to the rejigging of the financing that supports a particularly 'grouped subset of the Heartland loan book', by selling that portion of the loan book on to a third party. However, although this can free up Heartland capital to pursue more 'organic growth' as a side effect, the process of securitising existing loans is not a growth strategy in itself.
I would say 'interest from leading aggregators' does refer to the loan securitisation process.
As for the inorganic growth mentioned, you might be onto something with that residual reverse mortgage loan portfolio at Westpac. Westpac seem to be taking every opportunity they can to simplify their business. Getting rid of a Reverse Mortgage Rump would certainly do that. I think it would be a very substantial acquisition for the thinly capitalised Heartland Australia though, even after several years of Westpac being inactive in the reverse mortgage market. There are smaller moribund reverse mortgages facilitators operating the the Australian market nevertheless. So you might be right, even if it isn't the Westpac reverse mortgage portfolio that is up for sale. Bear in mind though that the quote you referenced began 'Explore opportunities', which would suggest there is no imminent 'done deal'.
SNOOPY
Last edited by Snoopy; 03-04-2021 at 08:29 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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07-04-2021, 08:49 AM
#14512
Two weeks ago global dairy (WMP) prices fell after a good run up ....and in last 2 weeks after a good run up Heartland share price has fallen quite a bit (6%)
Last nights dairy auction saw prices ‘stabilise’
That’s good news
Last edited by winner69; 07-04-2021 at 08:54 AM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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07-04-2021, 09:05 AM
#14513
Originally Posted by winner69
Two weeks ago global dairy (WMP) prices fell after a good run up ....and in last 2 weeks after a good run up Heartland share price has fallen quite a bit (6%)
Last nights dairy auction saw prices ‘stabilise’
That’s good news
Haha, most entertaining thanks winner. I was not expecting a link between dairy farmers buying and selling HGH shares based on their milk price fortunes, but I have seen you mention this before. There is a website dedicated to spurious correlations: https://www.tylervigen.com/spurious-correlations. There is a 94.7% positive correlation between the number of people who die by getting tangled in their bedsheets with US per capita cheese consumption....!
Joking aside, you have me sufficiently curious that I am tempted to run some numbers on dairy prices versus HGH share price. Have you run the numbers on this to test the strength of the correlation?
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07-04-2021, 09:42 AM
#14514
Originally Posted by winner69
I gathered that you were a non-believer
Intuitively it doesn’t seem to follow that whole milk powder prices and Heartland fortunes go hand in hand.
A fund manager I knew had a economic model he called the 3C’s .....inputs were climate, commodity prices and currency......essentially quanitfying how green the grass is and what producers were getting for their stuff and it’s impact on the NZ economy.
Greener the grass and higher the milk (and other products) prices the better the economy doing .....growing GDP .....and Jeff keeps reminding us Heartland’s fortunes are tied to the economy
So there is some rational thinking behind the relationship between dairy prices and Heartlands share price.
So keep on eye on things like SMD (soil moisture deficit), commodity prices and the NZD ... do some multiple regression stuff .....amazing how many things have a strong correlation to the 3C’s. ....like in a past life it was a good input into how much paint NZers might use in the future.
Cool eh
For Ferg
Diary prices and GDP linked and Heartlands fortunes reliant on the prevailing economy conditions says Jeff
I haven’t updated Heartland share price / WMP correlation for a while as I don’t have access to GDT data and don’t fancy paying to do so.
Was a reasonable strong correlation ...maybe not the quantum but the direction (up/down) with lags of both was interesting.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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08-04-2021, 09:53 AM
#14515
Good news: Heartland now stands alone with the cheapest home loan rate in the market at 1.99% with its online offering (HSBC raised its rates from 1.99% to 2.25%)
now a significant quarter of a percent gap between heartland and everyone else now at 2.25-2.29%
https://www.interest.co.nz/personal-...fter-two-month
Last edited by LaserEyeKiwi; 08-04-2021 at 09:55 AM.
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08-04-2021, 10:28 AM
#14516
isnt it a bit like OCA not raising their prices enough?
discl
have some
For clarity, nothing I say is advice....
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08-04-2021, 10:29 AM
#14517
Originally Posted by peat
isnt it a bit like OCA not raising their prices enough?
discl
have some
Was thinking the same peat
Also hard to maintain that huge 4.4% NIM when lending sub 2%
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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08-04-2021, 10:37 AM
#14518
Originally Posted by peat
isnt it a bit like OCA not raising their prices enough?
discl
have some
This is a brand new product and market segment for HGH - charging the same as everyone else is not going to win them any marketshare, especially with the automated online nature of the HGH offering (which reduces costs and enables the lower price)
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08-04-2021, 10:46 AM
#14519
Originally Posted by winner69
Was thinking the same peat
Also hard to maintain that huge 4.4% NIM when lending sub 2%
Not hard when they write less than $10m in home loans lol.
It's purely a marketing ploy. And a good one!
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08-04-2021, 11:51 AM
#14520
Originally Posted by Rawz
Not hard when they write less than $10m in home loans lol.
It's purely a marketing ploy. And a good one!
Best marketing ploy they ever did was to become a BANK ......has more credibility than a finance company and get mums and dads to deposit money with them.
Even their CFO publicly said it was just a marketing ploy
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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