Excuse my ignorance but isn't Heartland Bank a financial institution? I have yet to take the plunge on this one for the very reasons you have outlined.
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Lol, nothing wrong with that, i did it with peb when they signed there first usa insurer, had just started investing and made half a years salary in a week. Had no idea at first what i was putting my money into but everyone here seemed excited.
I did it again with ton on the asx and made decent money to before it burst.
As long as you have a tight stoploss and take profit while its there its worked well for me.
A lazy way to trade but if it works why the hell not i think.
Heartland is a Finance Company, cunningly dressed up as a Bank. Banks go BANKrupt. Even ones who are actually Finance Companies. We could be in a bubble now, but equally be in a Black Hole, being sucked into the centre and consolidated. But the journey is pleasant and the capital growth from 50 cents amazing.
Reserve bank is very happy with their operation, so is Fitch. Capital adequacy is fine, interest rates are at very low level's which is generally assistive in terms of making it easy for customers to service their loans , (lower level's of average loan delinquencies). I used to be "Thomas the doubter" but thankfully saw the light some time back...not as early as others but buying at 86 cents AFTER they'd received their investment grade credit rating upgrade last year was one of my most astute decisions for 2014. Barring a GFC Mk2 I see very little risk but what I do see is a company on a very reasonable PE ratio with a high dividend and excellent growth prospects.
No share is completely risk free but I reckon Its a very tough gig finding stocks with a better risk reward profile than HNZ :)
Meant to add that that it appears that there has been a very high retention rate of those building society customers and a high rate of deposits rolled over when they matured.
So most of the old building society customers seem more than happy to be dealing with a BANK. If anything they probably think they are better off belong to a NZ Bank rather than say Canterbury Society
And a lot of those building society traditions like community involvement remain, if nit enhamced.
Marac might be the financial company part of the overall business but the total business is more than a finance company. Would a finance company have special plans for parents to ensure that their kids get a good education?
I think their School Fees Program is a great thing for parents and even for grandma and grandpa to make sure their lovely kids get an education - a really cool initiative
And probably those kids will be customers for life as well, and hopefully richer than mum and dad