Back to 180 plus next week
That’s good
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Back to 180 plus next week
That’s good
I wonder when Reserve bank will allow NZ banks to start issuing dividends again. We might not be too far away from that given vaccines are close to being deployed (minimising chances of another lockdown).
APPRA restrictions are removed on big oz banks
I think ours are on till end of March then who knows..
Share price back to the 180’s ....ST ‘smart money’ said this about true value
Would like to have said the rise due to Heartland doing something special but the share price just seems to be following the Oz banks up
Can’t complain ...it’s going up .....even though NZX says share price still lower than 52 weeks ago.
This is For Bars preview. Lifted target from $1.41 to $1.61 - Lets hope HGH management are right.
1H21 Preview — Headwinds Remain
UNDERPERFORM
Preceding HGH's 1H21 result in February, we adjust our near-term forecasts in light of the improving domestic economic
backdrop. In recent months New Zealand's domestic economy has recovered faster than expected, with the 2020 trough
shallower than economists anticipated earlier in the year. HGH's stock has rallied in recent months consistent with the
recovery of Australasian banking peers and other cyclical stocks. We maintain our UNDERPERFORM rating given 1) HGH's
high risk profile in comparison to international banking peers, 2) HGH's sub scale profile (makes up 1% of banking assets in
NZ), 3) sustained cost pressure across the business, 4) expected Net Interest Margin (NIM) compression in light of growing
competition, and 5) an expected slowdown in loan receivable growth heading into 2021.
What's changed?
We raise our short term forecasts but remain cautious over softening receivable loan growth in 2H21
The company has recently guided loan receivable growth for FY21 to be up mid-single digits against our previous forecast of +9%.
While the motor division and reverse mortgage portfolios have shown steady growth, the company expects the business and personal
divisions to have negative loan receivable growth for FY21. We expect subdued loan growth to lead to increased advertising and
marketing spend in the second half of the year. In light of a stronger economic backdrop we lift our FY21E NPAT to NZ$77.2m from
NZ$64.7m, against a Bloomberg consensus (ex-Forsyth Barr) of NZ$78.3m and company guidance of NZ$83m–85m.
Long unemployment tail likely with drop off in wage subsidy
Anecdotal feedback shows small business owners in New Zealand have experienced a drop off in demand after the post lockdown
spike, while more bullish economists forecasts expect unemployment to peak in calendar 1Q21. Coupled with a roll off in wage
subsidies across the country, we note there could be indirect impacts felt from the hospitality/tourist/retail sectors operating on
skeleton staff and/or closing down given the current border closure and lack of tourism for the peak summer months.
Rural remains an opportunity for HGH
In recent years HGH has reduced its rural loan receivable assets due to the high concentration risk of individual loans and the inability
to compete on yield with larger banks. With the RBNZ applying an increased capital charge to rural assets, larger banks which have
had large exposures to rural assets have now either reduced the number of loans or increased yields in order to maintain Return on
Equity (ROE). In the current environment we see rural financing as an emerging opportunity for HGH, with the group able to leverage
its legacy assets, brand and rural network to compete in a less competitive environment.
do they have a copyright notice on there reports?
they might have a notice somewhere on the reports just check them. Lucky we separate our data from our summaries.
we must check with them.
It is a very small part of it
ANZ hinted they were probably going to reverse their special covid provision.
Jeff has essentially already said that ...and included in F21 guidance of $85m
If Forbar included this their forecast in line with company forecast ......they come up with a $1.61 target because they think lower multiples than say Oz banks is appropriate.