Warren Buffett likes Wells Fargo because it is the least leveraged of the majors ....by a long way..
Their ratio is only 8%
Jezebel no wonder the world is in a perilous state
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Warren Buffett likes Wells Fargo because it is the least leveraged of the majors ....by a long way..
Their ratio is only 8%
Jezebel no wonder the world is in a perilous state
Now we are talking the same language.RBNZ liked it enough to grant HNZ a bank licence.
Talk at the AGM was that the "non core property" was moving along.Auckland units sold,better security on a number of properties,lifestyle properties still slow to sell,building in Wellington that accounted fo 15% of "non core properties"ie about $24mil was now ready to be put on the market.
In a lot earlier post I pointed out HNZ do not have have the residential property problems the Australian Banks have.[in Australia].You picked up on this at the time.
I rang Chairman Bruce Irvine on Tuesday to congratulate him of the bank licence.He was in Melborne,so left a message.There was a message on my phone on Friday from Bruce telling me he received my message and thanks.
Most impressed he found the time at this time of year to ring me.
Percy will you shift all your bank accounts to them then. This cat will not put any money anywhere near them.
No.I bank with Westpac.I have a home run business,dealing with over 200 schools and libraries.I have them on direct internet banking and changing would mean a mess.I have no need to borrow money,so will not be using their services.I do have a term deposit at Westpac that I should change to HNZ.I was a long term shareholder of PGC and never used Marac.At present, a trust I am a trustee for, hold ANZ bank shares.I have in the past owned Trust Bank shares and when taken over I held Westpac shares.I think Westpac are only average.I run cash management a/cs NZ and Australian with Craigs,who give me excellent service.
Heartland Bank has maybe a lot of shareholders who do not want to hold long term. They may have started out with the Sydenham Money Club. Then to Canterbury something and then swallowed into Heartland. They have seen the value of their holdings destroyed. I do not know at what point they will sell. Many of course cannot sell, their holding is too small.
Next problem. Its a bank. They need more capital to expand, and that capital can only come from shareholders. Stuffing cash into a bank as a deposit gives you say 4% return. A 3% return from Heartland requires more or less a 2 cent dividend for a 70 cent share. But the shares have an assett backing of 90 cents. So Heartland has to pay a 3 cent dividend from maybe only a 6 cent per share profit to keep shareholders happy at assett valuation of the shares.
But Heartland has to make another 'cash call.' They need more capital, but shareholders do not want to pay. A bit like Pike.
Next, what expertise does Heartland have in its specific lending area? It lends on Property. Commercial and Residential. The two require different experience.
They lend on machinery. Is it Farm machinery, or Civil Engineering equipment. What sort of market exists for the stuff?, what is it worth second hand?
I think they even lend on Cows.
They operate all over NZ. I suspect they cannot have all the expertise at every branch.
I would appreciate ideas on the above comments. I think Heartland cannot trade above 90 cents in the next two years, to December 2014.
mouse - you overlook that they have an equity ratio of 16% which is the envy of other nz financial instos
you also shouldn't upset percy on the night before xmas
santa will bypass your house tonight ..... and give that lovely red ferrari (financed by marac of course) to to some other deserving punter
anyway merry xmas from me
So why does Heartland only have a BBB rating. Or is it BBB-? The Equity Ratio is of course good, but expansion must reduce the Equity Ratio.
Hopefully I have not upset Percy too much, and Happy Christmas to both Percy and Winner.
I got an early new Toyota Corolla, financed by Toyota! So happy to miss the Ferrari, and its repayments. Paying for the Toyota is bad enough. If Heartland could hit $2.00 I could rid myself of Toyota debt!
Nice to have you back.Missed you.Have a nice Xmas.
Rural loans; Yes big on cows.Their representitive is at the sale yards,facilitating the loans.
HNZ.Read the presentation given at AGM and you will see who they lend to,mainly cars,machinery etc that was Marac.
I think they use telephones to get expert advice.Have lending limits and guidelines.
Property only residential home loans which they are not competing with major banks.Commercial etc no new loans.
Best way to keep upto date and understand the company is to buy a small parcel of shares,then as you get to know the company and people better you can buy more.I see they have paid the special divie,intend to pay an interim dividend in Feb/March then a final divie later in the year.
Until we find out what they are ,we can't work out yield.More capital will only be required if they do a big acquisition like buying F&P finance,in which case I think you would see the institutions keen to underwrite.
All your questions are answered in company annual report and presentations.
Any Sydenham Money Club shareholder should be proud that their second rate company has developed into HNZ which is now a registered bank,listed on NZX.
Pike never did one thing they said they would do.HNZ have done EVERTHING they set out to do.At present they are only achiving 4% on equity.This will increase to over 10% in a short period of time.Astute investors are buying in as they understand this will drive the shareprice.Weak shares moving to strong holders.
A good answer Percy.. PTC asked if you would transfer " all " of your accounts..
I have banked with a the ASB through all of their changes since 1959/60 .. Have used nearly all of the others during that time..
ASB is still my Main Bank.. During all of their changes they have looked after me..
My fervent hope is... ( I feel that it will happen ).
That HNZ will replace the ASB in the hearts of NZ'rs.. By giving better or at the very least.. Equivelent service ( Hard to do ) ..
Thus saving this country SQUILLIONS of DIVIDEND dollars going into Aussie pockets..
Making me and all of the many believers on this forum... RICHER !!.. :-))
[. A bit like Pike.
Come on mouse.. Hnz is not " A bit like Pike. "..
Pike was pie in the sky.. Just like NZO is.. A promise of millions " IF "..
There is no " IF " in a Bank Managers responsibilities today !!..
" Next, what expertise does Heartland have in its specific lending area? ".
They have dealt and won, dealing with GK .. !!.. Coming out of the other end smelling of roses..
Mouse... This is not a time IMPO.. to be taking on Toyota Debt.. OK.. OK.. I am the original scrooge..
Better to keep your old dunger and invest in HNZ.. :-))
Go for the ROLLER..
A good question.. !!..
It lends on Property. Commercial and Residential. The two require different experience.
They lend on machinery. Is it Farm machinery, or Civil Engineering equipment. What sort of market exists for the stuff?, what is it worth second hand?
I think they even lend on Cows.
They operate all over NZ. I suspect they cannot have all the expertise at every branch.
I would appreciate ideas on the above comments. I think Heartland cannot trade above 90 cents in the next two years, to December 2014.[/QUOTE]
My Toyota Debt is interesting. It is a new car. Interest rate is 2.5%. Plus set-up costs. So I pay around $800 interest including set-up costs for a two year loan. Now the reason I am giving these details is that most new cars are sold with 'manufacturers finance.' Currently between zero and 5%. Which Heartland cannot, and should not, compete against.
The leaves Heartland only able to make vehicle loan on second-hand vehicles. Which are at a greater risk of having trouble. (My Toyota has a five year free servicing and five year warranty). Similar situations would probably apply to Industrial and Farming Machinery. The manufacturer providing finance. Again leaving Heartland with loans on second-hand machinery which may only have an economic life of ten years.
My point is, vehicles require specialist knowledge to make a profit from financing them. It was Marac that produced the outstanding profit results for Pyne Gould and Marac that produced the losses thatdrove them almost to bankruptcy. Borrowers must be both willing to pay and able to pay.
This is just one simple example of problems facing all financial institutions.
Heartland has a very wide lending scope. Do they have the expertise required for that scope?
I do not know. I would appreciate discussion on the situation.
Pike by the way is very similar to Heartland. Both are 'start-ups' and Heartland needs a continuing level of support from their shareholders. Should the shareholders not give the support then they will see their holding diluted.
Marac do supply "manufactures finance" Mazda and others.Years of successful motor vehicle finance.Reputable second hand dealers,no Honest John Motors.
Marac LOST money [as did most finance companies] on proprty development which they did not understand.They no longer lend to this sector.
The rest of Marac is excellent.Very strict guidlines on ALL lending.
HNZ is not a start up.Each party to the merger has been in business for a good number of years. HNZ is PROFITABLE after spending a fortune in legal fees on the mergers and huge fees getting the banking licence.Now has a banking licence [ie like a new Toyota] and has started paying a dividend.HNZ have been honest in what they sey out to do,and have achieved all they said they would.
Read the annual report and the presentations and you will find ALL the answers to your questions there. Nice pie graphs on lending,which regions,borrowings,everything.
Remember Pike could not even get the tunnel to the coal right.What, twice the cost and three times the time taken.?
Go to HNZ web page www,heartland.co.nz to get all the information you require.
Mouse.
To try and understand your Toyota debt,think "interest free" TVs etc from Smiths City,or Noel Leemings.You may get low interest or no interest terms,but the retailer pays the interest.Toyota,Smiths City,Leemings don't get interest free money,your interest payments savings comes out of their mark up.It is a " marketing ploy".
Not exactly with new cars. All car makers are stuck world wide with stuff they cannot move. Hence these very low interest rates, plus even a low price on the car. Which is considerably helped by a very strong NZ dollar. The point is, in this situation that Heartland ends up financing only second hand cars. Which have a much higher chance of turning into a lemon, and thus a bad debt. I am very happy with Marac expertise being transferred to Heartland. So they know about car finance. But they are lending at a higher risk.
My query, and I repeat it, is the wide range of finance that Heartland is providing. Do they have the expertise to do it?
Next, I managed to buy 15,000 Heartland at 50 cents. Which has now put me close to being in the black with costs for Heartland. But those not in my fortunate position must be very seriously wanting to sell shares that have cost a lot of investors a lot of cash. Hence my idea that the shares have a natural price ceiling for the next couple of years of 90 cents. Any ideas on that? What sort of price can we realistically forecast by December 2014?