I believe it will in the next few days
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Finding a bit of traction this afternoon, I'm expecting a modest/safe result on Thursday and no divvy.
It’s only the divvy that keeps this above water, with such a weak sp, testing my patience for sure. If I had any fortitude with this company maybe I should buy the yield now, but with the uncertainty over the divvy and the forthcoming depression, maybe quit now. Unsure 😐 I’ve never quit at a bottom and I don’t think heartland is going out of business, but it better show some resilience or I won’t be by myself at the exit. Cut your losses or buy the future, big call with heartland imo atpit
No market update seems to confirm that the result will be in line with previous guidance. And the last guidance we did see specifically mentioned
"The prohibition does not prevent Heartland from paying dividends to its own shareholders, and Heartland continues to consider whether it will pay any final FY20 dividend. Heartland's decision will be announced at the time of Heartland's FY20 results announcement. "
I am expecting a result in the high $70s and dividend will be paid, although much reduced.
Why are Heartland announcing this new funding arrangement just two days before they release their annual result? Why not hold off just two more days and let shareholders have the big picture from all angles? The cynic in me suggests they are going for the pump (to get the cash issue price higher) before the annual announcement arrives as a dump. I hope I am wrong. But Jeff is surely too clever to not stage manage the release of the Heartland result like this.
SNOOPY
Under the continuous disclosure rules, material matters have to be announced immediately to the market. It doesn't matter whether the annual result is due in 2 days or 2 months.
We have some growing on our farm...the locals of a certain ethnicity help themselves to it...ask me if I care lol
Anyway back to HGH. Got to admit I am confused despite the other Beagle's attempts to explain it. In line with the new international financial reporting standard concerning doubtful debt provisioning and a much more forward looking stance regarding same we have seen every other bank report results materially affected by this new standard in the context of this Covid environment and its impact on customers and the economy.
HGH have clear obligations regarding continuous disclosure and have a forecast in the market in the late $70m range.
I struggle to see how they can report a result within such a range that's consistent with this new IFRS standard and their continuous disclosure requirements. They must be in breech of one or the other.
In any event I cannot fathom how they can possibly make any sort of reasonable judgement about what bad and doubtful debts will be going forward seeing as Covid and its effects on customers and the economy is unprecedented and any attempt to use previous modelling such as during the GFC might be wildly inaccurate.
They might as well print the entire annual report in Te Reo this year as far as I am concerned.
I assume they talk to customers, use the feedback as one input, discount some more based on other inputs, make further assumptions, discount some more just to acknowledge the uncertainty and get to a number. Any decent lender will be doing this on a daily basis. As to whether the new number (or further write down of loans) is material enough to tell the market, 10% is a rule of thumb. They've had ample time to tell the market if that was the case so if they turn up tomorrow with a new level of write-offs then they will be in trouble won't they?
Well as you said Beagle I answered this before and, for those who haven't taken things in, I repeat my answer again (above). There is a difference between being able to pay the interest on a loan and the ability to repay the principal of that loan. If interest payments stop then the underlying loan asset can still be sold to recover any debt and deferred interest payments. It wouldn't surprise me in the least if Jeff after delivering his AGM address, pulled a butchers knife out of his trousers and when straight down to the farm to slaughter a few dairy cows. The meat would pay the loan capital off, and there would probably even be enough money left to get any errant blood stains off Jeff's business suit at the dry cleaners. Despite many loans being in possible default, and the new 'predictive standards' requiring them to be reported as such , that doesn't mean the debt will have to be written off.
My memory of how the Australian banks are playing this Covid-19 situation is rather different to yours. Yes there were big write offs. But it was also clear these write offs were backward looking and it was made very clear that as Covid-19 ravaged its way through the loan books more write offs would likely be required. No provision was made for these 'next stage' write offs. The most glaring example I remember was those homeowners who had taken a mortgage payment holiday yet were not being recorded as any bad debt risk. There is no such equivalent risk with the Heartland reverse mortgage loan book, which is one reason that I think Heartland is in a better position than the big four Aussie banks to withstand Covid-19.
I agree that forecasts for FY2021 may end up being 'wildly inaccurate'. But directors must only be able to demonstrate that they have put their best efforts into forecasting the future position and have acted prudently in line with those reasonable beliefs. The law appears to allow them to forecast future bad debts as a linear extrapolation of current bad debts. They can forecast something that turns out to be wrong and still fulfill their legal obligations is my reading of those BDO report comments. Of course as time goes by and their forecasts look wrong, the directors do have an obligation to update their forecasts and keep shareholders informed. But I don't think you can criticise directors for not being able to forecast three years in advance in this business climate.
SNOOPY
And why is this different for any of the banks. I tend to think they are all just wildly guessing and I have my sneaking suspicions that many of the covid impairments being made by other banks are likely to come back into the normal books at some time. Who knows of course and we all have a-holes I mean opinions
While I can't disagree with your comment KJM, I am not satisfied with that explanation. To start with you make the assumption that the announcement is material, but is it? It is not marked as 'price sensitive'. All that has happened is that a bundle of existing REL loans have been packaged up and sold off as one securitized loan. No doubt Heartland still have some unspecified risk exposure to this securitized loan in extremis. But Heartland have not seen fit to tell us what risk remains once the securitized loan deal is done. If this announcement was really material, I would have expected more detail than what was given. There is a promise that more securitized loans in the future are possible. But on a day to day basis, nothing much has changed with this announcement. Now, if there was a change in a substantial shareholder holding (as a completely different event example), that would have to be notified to the market too - but not immediately. I think there is something like a month's grace before a notice has to be posted. So I have real doubts that this announcement was 'material'.
Nevertheless, for the sake of argument, let's assume the new lending arrangement announcement was material. I would assume that the board has met, probably today, to sign off the annual result presentation for tomorrow. It would seem quite logical for the board to sign off this new loan deal as well at the same board meeting. The securitized loan deal could have been done 'subject to board sign off'. That would have been a legitimate way to delay, by a few days, the announcement of the new lending facility. But perhaps the board met on the 14th to sign off the loan deal for announcement on the 15th. If that happened, wouldn't the board have also signed off Thursday's profit release at the same time? So if the new loan arrangement was material, why has the profit announcement, which was surely even more material, been kept under wraps for three days?
I guess the proof of all this could come out in the wash with tomorrow's profit announcement. A cash issue would come as no surprise for shareholders who have seen other banks do the same to shore up their balance sheets. A cash issue would certainly be material, but it would only have been signed off at the last minute to avoid running foul of continuous disclosure rules. That means the board meeting was this afternoon. And that means the new loan arrangements, if material, were not signed off at the same board meeting. And that means the new loan arrangements were constructed in such a way that they:
1/ Were not material after all OR
2/ Did not need final board approval - by design, IOW one way or the other, the board deliberately chose to release details of the new loan arrangements two days ahead of the annual result.
SNOOPY
if interest rates stay under 1% for the next (n) years, what price will you pay for 3%.
THATS THE QUESTION.
"HEAPS and HEAPs"
YOUR THE WINNER!!!
Im not an economist but even with my accounting background not financial maths. We have discussed bold methods of direct government debt funding. Mr O has not been had his offer taken up and therefore he will have to try to keep interest rate low if he wants to support the high NZ debt.
Which assets classes are going to be in demand, buy those. In fact thats why anything on the any market paying 4.5% is still undervalued.
https://www.cnbc.com/2020/09/16/singapore-summit-cppib-ceo-on-zero-bound-interest-rates.html
https://www.cnbc.com/2020/09/16/blac...t-returns.html
Waltz ....cnbc is bad for your health
well its not behind a pay wall for most here for most people to read.
Bloomberg is also in use but the site we download the most is the US economic research site. Yahoo's free API was closed off a few years ago.
we use another site but thats on a VPN only.
you have to down load special OS software.
and remember we arnt always in residence in these lovely isles.
we have our own languages to use far better at interlinking software than python and javascript and accessing raw data.
and we have no idea what the local news here is.