Please Joshua, what's CETI
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Exactly and the vast majority of that's secured by first registered mortgage security over farmland and buildings which have held up in value quite well.
OTOH an awful lot of HNZ's lending to the dairy sector 7% of circa $3b = $210m is secured only by way of the herd itself, (which could prove awfully hard to liquidate in a complete dairy meltdown), as they're big on stock financing and sharemilker financing. If a significant percentage of that herd financing goes pear shaped then watch out for a major impact on FY16 and FY17 earnings.
I wonder if Craigs have actually bothered to differentiate between the two different types of dairy lending and their relative risk profile ?
Correct.
ANZ has reduced their exposure at 31/3/2015 to $11.3 billion,so as you point out it is only a small % of their total business.
However, if you read this thread, I have been ridiculed for saying HNZ did not have the same exposure as the Aussie banks .
Like you, I am a great admirer of the Australian banks, and have only been doing comparisons, so people have a true picture that HNZ's dairying exposure has been low.
Yes the slow down in dairying will affect all NZ,but will have very little effect on HNZ's profit.
Jonas not being replaced
That should add $1 million to the bottom line
Good eh
Yep
"HNZ’s balance sheet is in a strong position. The non-replacement of the Head of Strategic &Product Development’s position suggests less focus will be placed on value-accretiveacquisitions and more attention will be on organic growth. The latter is less capital intensive and lower risk"
HNZ's approach to dairy customers that are presently going backwards is to simply keep supporting their clients through this...which of course implies that there is some light at the end of this very long and very dark dairy tunnel but what if like Iron Ore being depressed for many years we see the same pattern replicated with dairy ? How many years do they keep throwing good money at sharemilkers and farmers with unviable operations at the present low price, let alone if it falls further ? Lets all try and forget that Fitch a few months ago were warning regarding credit rating with dairy problems shall we ?
I see nothing, nothing at all. http://www.shutterstock.com/s/ostric...line=217847644
So Target of $1.30 is unchanged from several months ago.
So the 12 month target has been stretched to a 18 month target
Hardly stellar is it?
What's CETI anyway
One good thing is that Craig's have many believers and a BUY on Heartland should give the share price a boost over the next day or two.