Heartland sees flat profit in 2013, announces special divvy

Article – BusinessDesk

Heartland sees flat profit in 2013, announces special

By Paul McBeth

Nov. 30 (BusinessDesk) –
Heartland New Zealand, which expects to hear back on its
banking licence application before Christmas, sees flat
profit in the 2013 financial year, and has announced a
pre-Christmas special dividend.

The Auckland-based lender
told shareholders net profit will probably be between $21
million and $24 million in the year ending June 30, 1013 at
today’s annual meeting. That compares to annual profit of
$23.6 million in the 2012 year.

That profitability
represents a 45 percent to 66 percent improvement in pre-tax
profit, and depends on asset growth, lower cost of funds
from a successful bank registration, a focus on costs and
charges on impaired assets staying at current levels,
Heartland said in its AGM presentation published on the
stock exchange.

The company’s board also declared a 1.5
cents per share special dividend, with a record date of Dec.
14 payable on Dec. 21. Heartland’s directors gave no details
on future dividend policy, saying only that payouts would be
based dividends on its after-tax profit, subject to
maintaining a prudent level of capital.

capital needs will vary from time to time, depending on a
range of factors (including regulatory and credit rating
requirements, general economic conditions, current and
expected growth and the mix of business),” the company said
in a statement.

The shares rose 1.5 percent to 69 cents,
and have rallied 43 percent this year. The stock is rated an
average ‘outperform’, based on two analyst recommendations
compiled by Reuters with a median target price of 65 cents.

Heartland was formed through the merger of Pyne Gould’s
Marac Finance unit with the Canterbury and Southern Cross
building societies, with a view to securing a banking
licence in a shift away from a new regulatory regime that
imposed stricter conditions on non-bank financial

Last month Heartland had its investment
grade BBB- credit rating affirmed with a stable outlook by
Standard & Poor’s, which cited the lender’s strength as very
strong capital and earnings assessment, good geographic and
business diversity, and sticking to its timeline for its


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