Heartland announces half year NPAT of $44.1 million

NZX/ASX Release Heartland announces net profit after tax of $44.1 million for the six months ended 31 December 2020 (or $43.2 million on an underlying basis after removing the impacts of one-offs) 22 February 2021 Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) achieved a net profit after tax (NPAT) of $44.1 million for the six-month period ended 31 December 2020 (1H2021), an increase of $4.2 million (10.6%) compared with the six-month period ended 31 December 2019 (1H2020). On an underlying basis (which excludes the impacts of one-offs ), 1H2021 NPAT was $43.2 million, an increase of $5.1 million (13.4%) compared with 1H2020 underlying NPAT. Highlights for 1H2021 - NPAT of $44.1 million, up 10.6% ($4.2 million). Underlying NPAT of $43.2 million, up 13.4% ($5.1 million) on 1H2020 underlying NPAT. - One-off items had a $0.9 million net impact on NPAT, consisting of $5.2 million of one-off gains and $4.3 million of one-off expenses. - Gross finance receivables of $4.7 billion, up 2.7% ($62.3 million). - Return on equity of 12.2%, up 54 basis points. - Net interest margin of 4.28%, up 5 basis points. - Net operating income of $125.3 million, up 5.6%. - Cost to income ratio of 48.8%, up 2.8 percentage points. Underlying cost to income ratio of 45.9%, up 0.8 percentage points. - Impairment expense as a percentage of average receivables decreased from 0.40% in 1H2020 to 0.19% in 1H2021. - FY2021 interim dividend of 4.0 cents per share, a decrease of 0.5 cents per share from 1H2020 (as a result of Reserve Bank of New Zealand restrictions on distributions by banks). - Earnings per share of 7.6 cents per share, up 0.7 cents per share. - In October 2020, Heartland Bank Limited was one of two Australasian banks to have no reduction or adverse change to its ratings or outlook by Fitch Ratings since January 2020. - $5.2 million fair value gain recognised in Harmoney, which is currently transitioning its funding model from peer-to-peer funding to wholesale securitised funding via warehouse structures. - Reverse Mortgages awarded Consumer Trusted Accreditation for the fourth year in a row. - Heartland Bank Limited awarded Canstar awards for savings accounts for consecutive years. - Further digitalisation of product applications and digital platforms - including digital Home Loans, Sheep & Beef Direct online loans, and a self-service online vehicle loan application. - 45 participants in the 2020/2021 Manawa Ako internship programme, up from 34 in 2019/2020. - Launch of Rocket, a mobile-led financial literacy programme for school leavers. See the attachments to this release, including the 1H2021 Results Release for further information. - Ends - For further information, please contact the person(s) who authorised this announcement: Jeff Greenslade Chief Executive Officer M 027 382 0023 Andrew Dixson Chief Financial Officer M 027 263 2666 Address: Level 3, Heartland House 35 Teed Street Newmarket, Auckland New Zealand For media enquiries, please contact: Nicola Foley Head of Communications M 027 345 6809 End CA:00367924 For:HBL Type:HALFYR Time:2021-02-22 09:32:53