I was going from The NZ Herald article headed;
"ANZ wins battle of the mortgages as Auckland's real estate market faces cut-throat rivalry."
Printable View
On the Australian market which had two more hours to absorb the news and is far more liquid with over 14m shares changing hands in ANZ today, they fell 4.1%. NAB down 3.8% and WBC on the Aussie market down 4.5%. Heartland trading had less time to absorb the bad news but fell more. I expect a flight to the safest possible banks and in particular deposits to Government guaranteed Kiwi bonds to gain strong momentum, (no lol, nothing to laugh about today).
on the brighter side...at these prices Snoopy will now become a hbl holder and only positive posts will be in his book
I don't think so.
He will need to keep a good amount of money to one side,as he may have to defend himself, against the possibly libelous statements he made about The Governor of The Reserve Bank of New Zealand in his post #7800.
The directors of Heartland Bank would most probably join the party too.
I don't mind snoopy posting,but when I see his post is the last in the index I don't go there to read it,honestly it's just too technical for me.
if you analysed all the stocks like that,how many would you come away with that you could make a positive investment decision on.
I have made a bit of money from time to time with HBL,but if I took those sorts of posts seriously for my decisions I would be institutionalised,in the ward for people whom Just don't get it.
No offence Snoopy.
Bit harsh .... while I don't always agree with Snoopy's sentiments do I see his posts as a great contribution to this forum (and thread).
Sure - it might be hard for everybody to do this level of analysis for every stock in a diversified portfolio ... but this makes it so valuable if others share their analysis with us on this forum. This does not mean that we should accept anything without own research and further scrutiny, but it means it gives us a first hint that there might be other things worthwhile to research ... or alternatively it might give us more confidence in one particular area.
What Snoopy is essentially doing is just turning the torch into dark corners of the stock under question and shining some light into them. He tells us how he interprets what he sees - and we may or may not agree with his interpretation, but at least do we have than a choice to revisit the corners he looked into or we can choose to dismiss his findings (and yes, he is not always right, but than - who is)?
So - please Snoopy, continue to share your findings and analysis with us ... and for anybody who feels overwhelmed by some of his close scrutiny or who prefers to put the head into the sand ... there is always the ignore-list or you can just close your eyes and dream.
Discl: hold HNZ and think about accumulating (thanks to clown Boris & his idiots) ... but still prefer to learn about potential (and real) warts prior to them blowing up into my face;
Researching stocks takes time and expierence.A great deal of reading,and understanding what you are reading.Attending annual general meetings,company presentations and speaking to the CEO or CFO to get clarity on any issue I do not understand.The better the research,the better the results.
It is very easy to compare what companies achieve, with what they say they will do.
The same came be done with sharetrader.Any one can read a thread from start to finish, and then they have an idea of who knows what they are talking about.Easy. Yet so many just don't bother and are left wondering why they get it wrong.
I don't think it's harsh at all,just telling it like it is, for me.
Snoopy has a right to post whatever he likes on the subject,but to delve into the balance sheet and financials so deeply really for me,is an aside to what is actually happening with the shareprice,and apart from basic fundamentals and the outlook for the company over the next year,that is all I need to make an investment for whatever timeframe I'm happy with. And I do presume others do enjoy the friendly banter with him regarding his analysis.
A lot of small trades today.iS THAT MORMAL OR HAVE I MISSED SOMETHING.
Good post BP. I also enjoy reading the results of the resident Beagle dog's foraging. He's get's his furry snout into places some don't like to examine and has a reasonably good nose for sniffing out decaying rat's lying in dark corners. Don't always agree with him but I enjoy watching his work just as much as watching the Beagle dog's at the airport go about their work.
I had the real pleasure of owning a beagle for 11 years so I think I can say with quite some authority that they seem to derive their own pleasure simply from getting their snout into all sorts of different places. They really seem to get off on discovering new scents and trails to follow and I think the resident beagle is no exception to the breed. Not so sure about the tummy rub thing, Kelly never seemed to like that all that much but I can assure you Sidney Silky Terriers absolutely love that :) All dogs like a good pat from time to time. I admire his tenacity.
DON'T PANIC!!!!!!!!!!!!!
Actually, it might become even cheaper. But, then again, could get much worse. Flick a coin for the answer!
BUT, if people want to get out of sterling or whatever, to put it into the Kiwi, they might put it in shares.
Again, flick a coin.
BUT there will be winners and losers from this lot.
I have no clue which I shall be!
Advice please.
It is a fact that companies whose ROE and eps increase,have the capacity to pay increasing dividends, will see their share price increase.
In today's environment of on going low interest rates, the market is looking for companies with strong balance sheets,that are paying good dividends,and have the capacity to increase them.
I see Heartland fitting the bill on all measures.
No need for flicking coins when you have done sound research.I leave that to Tossers.
Has Brexit realy changed anything with regards to new zealand....the potential down the track maybe with regards to higher interest rates, but for now nz will keep trucking along....we will get trade deals with europe and britain on similar terms as now....bargains abound on the nzx
For this morning's 'question of the day' I am reverting to my favourite subject - impairment :-) - and specifically the non-core property portfolio of FY2013 (or is that the non-core dairy portfolio of FY2017).
Now, a Heartland banker who makes an impairment provision is seen as
A/ prudent, far sighted, managing debts to best practice and responsible.
OTOH a Heartland banker who has to write off a loan is seen as
B/ reckless, lacking in due diligence, ill disciplined and squandering resources.
Now the curious bit. At the end of the day whether a loan is written off in advance by 'provisioning' or written off immediately in an 'expense' makes no difference to the long term position of Heartland bank. So my question is, are Heartland's senior loan managers best characterised by A/ or B/ ?
SNOOPY
Well, yes - BREXIT has changed some things re NZ markets:
* NZD went up ... i.e. reserve bank likely to further drop interest rates.
* British consumers have less money (due to dropping pound sterling) - i.e. British consumers can buy less (including from us). This will impact our exports as well as tourism; Might impact as well on our housing market (potentially more UK immigrants but with less money), which may or may not be a good thing;
* British unemployment is going to rise (well, this is not just common sense, but as well what the crown analysts predicted (check out the links hoop posted) - i.e. less money for the British consumer - consequences see above.
* NZ just negotiating a free trade deal with EU. Getting too cosy with Britain during this time might impact on our chances to be successful with the continent. Will be an interesting balancing act;
Still agree, that we have at this stage likely some bargains in our stock market ... this is unless the British disease is spreading.
Brexit and Heartland.
Funding;Unlike the Aussie banks HBL does not rely on any European wholesale funding.So no funding problems for Heartland,who have 38,000 individual depositors,19,000 of whom have been with Heartland for 10 years or more..
Interest rates;Should interest rates increase all banks, including Heartland, will do well as their margins increase.
....................;Should interest rates stay low,Heartland has been steadily improving their net interest margin over the past four years and that looks set to continue.
......................With their capacity to grow dividends [projected to be 9cents per share fully imputed for 2017] ,strong equity ratio,I would think investors will be attracted to Heartland.From what I have read The Reserve Bank of NZ is more likely to reduce interest rates than increase them
If everyone was an Accountant, then you would be right.
But people can become panicked. DON'T PANIC!
Markets can go all over the place.
However, we can be thankful that Heartland runs on cash borrowed in NZ. PLUS that they have a pretty diversified loan book.
The sp can go up, or more likely down. Since we in NZ cannot escape a Global Meltdown...Or even heavy rain.
You forgot option C - With great reluctance and after a great deal of time has passed and considerable forbearance has been shown, reluctantly doing what is only done as an absolute last resort because all possible efforts aimed at recovery, rescheduling, restructuring, refinancing or otherwise avoiding recognising a loss have been completely and utterly exhausted and the loan has irrevocably failed with absolutely no chance whatsoever of even a partial recovery. This is only done after all channels of recovery have been fully exhausted including any proceedings taken against guarantor's if any and liquidation of all assets held as security.
That's how most finance companies and banks operate.
Meanwhile, of course, the loans have been 'rolled over' so that it can be claimed that there are Zero loans in arrears. The loan book is Healthy. Do Not Worry.
But.............at the back door those in the know are lined up for their cash.
I hasten to add that I think Heartland is pretty solvent, and I am not selling atm.
According the to last half yearly report (HY2016), Heartland has $377.605m in bank borrowings. This is rather smaller than the $2,174.533m of depositors funds on the books. But it is certainly not nothing.
The trend seems to be increasing the amount of depositors funds relative to parent bank borrowing over recent times. That means less risk exposure to overseas wholesale banking markets. Obviously the prefoetal support for Heartland which commenced trading five years ago from all those depositors who put their money in ten or more years ago has been helping.
SNOOPY
Don't let the bad loans or potential bad loans overcloud your view of Heartland, Roger. Go back to 2012, and the fall back position for some of those expensive property development sections in the 'non-core' property portfolio was to put a couple of sheep on them. As Heartland themselves have joked, dairy cows can at least be slaughtered. And the price of beef in the supermarkets seems to be holding up.
The 'Snoopy Adjusted Underlying Profit' assumes a non-core property type hit every five years. This means whatever the headline figure for FY2016, and it might be bad, the SAUP I still estimate at $52.683m. I think you need to look through the big hits like the dairy downturn, to determine fair investment value.
The Reserve Bank are actual the most brutal Heartland bears. That BBB rating means Heartland will be expected to go bust one in every six recessions. It is still a little early to predict whether the coming recession will be 'the one'.
SNOOPY
I think 'A' would look better for the long term management incentives too. 'B' is what a new MD would do. Clear the decks, so we can have five nice years of 'A', before crossing companies to the next corporate assignment. Then let the next new guy have his 'B' year. I think that is how management incentives tend to work these days.
SNOOPY
I learn something new every day. I always thought that those ratings were set by the likes of Moodys, Standard and Poors, Finch etc. as is the case with industrial-type companies.Quote:
The Reserve Bank are actual the most brutal Heartland bears. That BBB rating means Heartland will be expected to go bust one in every six recessions. It is still a little early to predict whether the coming recession will be 'the one'.
When Heartland rave about their BBB rating they provide a link to a RBNZ document about what it means
Table below
Approx. probability of default over 5 years with a BBB rating is 1 in 30 (5 times more likely than those with a A rating). The approximate, median likelihood that an investor will not receive repayment on a five-year investment on time and in full based upon historical default rates published by each agency.
Irrespective of whether motels are full in Westport or Aucklnd is booming there is always a possibility of default
In practical terms comparing BBB with AAA rating.
Enjoy this.
I recently asked Heartland Bank's head of banking,Chris Foold whether Heartland would be looking for a higher rating.
"No point, as were are already attracting funds at the same rate as AAA Banks."!!!!!!!!!!!!
Thank you both for clearing that up, I'll now remove my mischievous tongue from my aching cheek!
Back to pondering Brexit, imminent recessions and rising interest rates!
;)
Sure you meant possibility Winner and agree there's always the possibility of a GFC Mk2. Nice image. BBB - Capacity to make timely payment - Adequate. I guess that's adequate unless the custard really hits the fan in a major way.
Spitting hairs,or just nitpicking?
I took it to mean HBL were attracting funds at the same rate the Australian Banks were paying for their NZ deposits.
What ever way you take it,HBL they are achieving what they formed Heartland for,ie attract funds at a very low rate.
investors who don't understand the risk IMO.
BBB - = 1 chance in 30 (3.33%) of default within 5 years. A rated is 1 chance in 150 (O.67%) of default in five years. Investors should be getting a 3.33-0.67 / 5 = 0.53% premium per annum on 5 year term deposits with a BBB rated bank over what they can get on an A rated bank. Throw into the mix too the Reserve Bank's open bank resolution here and people accepting very low interest rates on long term deposit with HBL simply don't understand the risks, (albeit they are fairly minor) but they are certainly not getting a return commensurate with the risk taken. A lot of things can happen in 5 years.
Interestingly HBL's 5 year term deposit rate for over $20K is 3.8% (ANZ for example for 5 years is 3.6% per annum) and that return is fully taxable so for investors on a 33% tax rate their net return for the risk is 2.55% per annum.
Total return over 5 years is thus, (ignoring compounding) = 12.75%, less risk of default 3.33% = net risk adjusted return 9.42% / 5 years = 1.88% per annum net return less an adjustment for potential loss of capital due to the possibility of the Reserve Bank invoking its open banking resolution. This post shows why I will only bank with an A rated bank.
Proof of the pudding is in the eating.
"38,000 individual depositors,19,000 of whom have been with HBL 10 years or more."
That is known as loyalty.
It does not just happen.It has been earnt.
I seem to remember posters here saying HBL would not get through the government guarantee ending.Remember those ? rubbish off course.
96.7% chance they'll all be okay for the next five years too Percy.
With each years improving ROE,and net interest margin,profit,together with Heartland Bank carrying excess capital,and the fact NZ's outlook remains excellent, I would think those in the know, would rate their chance of being all OK for the next five years as closer to 100%.I know I do.
ps.I expect HBL's share price to be in excess of $3.00 in 5 years time.
And that is why I remain "well positioned."
Hey nextbigthing - that $1.60 later in the year is a now a pipe dream i reckon. I think the mood on the street is is now rather subdued and expectations might only be about $1.20 now ...maybe $1.30 if we lucky.
Looks like acquisitions off the agenda - need that excess capital in these times.
Current price now below the 50EMA, 100EMA and 200EMA. Thats not good is it.
What are you hearing on the street up your way mate?
I have banked with Westpac for 52 years.My business banking has been with them 43 years.
I have had the same accountant for 43 years.
I have dealt with Craigs for over 35 years.
I no longer hold any Westpac shares.
I hold Heartland Bank shares,which I have been steadily adding to.
I looked at opening an account with ANZ Securities,as well as Heartland Bank, and decided I could not be bothered filling out their forms.
I generally buy shares for the long term,ie I have been a share holder of Ebos for approx. 27 years.
Yeah me too my bank is Westpac ; but the bank i invest in in NZ to profit from is Heartland; what a great track record against the odds its carved out some great niches and risk wise its minimal compared with the small cap spekkies and Goldies i play with. Kinda like SCL i know a weather event could stuff things up occasionally but thats the risk I'm prepared to take; as is walking out the door.
With these sort of rates of household borrowing you'd think Heartland would be doing much better than expected .....must bea profit upgrade soon.
http://www.interest.co.nz/property/8...last-seen-2008
Numbers concentrate on housing loans but implied is strong growth in consumer borrowing (outside of home loans)
I'm told that Heartland will be Open for Business in late august when BNZ is Closed for Good
Closed For Good: BNZ Great stuff; hats off.
Quite right to pull me up on this Macduffy - my wording was a little sloppy.
Perhaps what I should have said was the Reserve Bank has decided that a minimum requirement for a bank is the "Capacity to make timely repayments." The minimum credit rating that would indicate this is BBB (as determined by Fitch in the case of Heartland). The Reserve Bank accepts the Fitch rating and all that this implies (likelihood of defaulting on customer deposits in any given year 1 in 30 - or if you accept a business cycle is six years, one business cycle in five).
Nevertheless the essence behind what I said, namely that the reserve bank accepts the Heartland BBB rating and the associated one in 30 year default risk that the BBB rating implies is correct.
SNOOPY
Sorry to be pedantic here, Snoopy, but does the RBNZ "accept" credit ratings as distinct from "noting" them? Where would they go if another ratings agency came up with a different rating, as is sometimes the case in other industries/markets?
Heartland got their own BBB credit rating from Fitch, IIRC.
I seem to recall Jeff Greenslade saying they were not seeking a 'second opinion'. So by my reckoning that means the Reserve Bank has 'accepted' it. If the Reserve Bank had merely 'noted' the opinion, it suggests that they might be on the look out for another rating to either confirm or contradict Fitch. But the Reserve Bank have not asked for a second opinion. By my reckoning this means the Reserve bank have 'accepted' the Fitch rating, and all the predicted consequences, -good and bad- , that flow from that Fitch rating.
SNOOPY
Credit rating , don't get me started ......
https://en.wikipedia.org/wiki/Credit...ubprime_crisis
Good post. People need to keep in mind that credit ratings for banks must be investment grade, minimum of BBB- and maintained as such.
The most recent and most spectacular failure of an investment grade financial institution was South Canterbury Finance which was rated BBB- the same rating as the Cooperative bank and only one notch below HBL.
I have witnessed some sloppy math on here regarding probability and the one in 30 chance of default over a 5 year period. If you roll a six sided dice six times you are not guaranteed to roll a 6 even though you have 6x 1:6 chances. There's something called independence of events.
"A basic assumption in probability theory is that each event is independent of all other events. That is, previous draws have no influence on the next draw. "
This means that if Heartland doesn't default in the course of a year the probability of it defaulting the next year does not increase.
The approximate, median likelihood that an investor will not receive repayment on a five-year investment on time and in fullbased upon historical default rates published by each agency.
Adequate BBB Baa BBB 1 in 30
I don't disagree with anything you have written above regarding probability theory Axe.
But I do think that in relation to any particular example (in this case Heartland) that just because you are applying probability theory, that doesn't mean that all years in which Heartland operates neatly organize themselves into "independent events." For example, consider Heartland's non-core property portfolio.
If the bad property is a drag on the company one year, and there is no significant improvement in selling down that portfolio or writing it down over that year, then it will be a drag on the company the next year too. IOW because loans 'span the years', this means that successive years in which Heartland operates are clearly not independent of each other.
I would imagine the statisticians who draw up these loan ratings know that each business year of Heartland is not independent of the next. So they will have adjusted their risk model to compensate. To give a very simple (oversimplified for any reality, but useful for explaining the concept) example of this to make the point.
Consider 30 years of a financial institution in business, made up of two types of years: 'good' years and 'bad' years. Let's assume for the purposes of this example that there are an equal number of 'good' and 'bad' years. Let's assume that the chance of going bust in a 'bad' year is 1 in 15. Let's further assume that the chance of going bust in a 'good' year is 1 in 45. Because there are an equal number of 'good' years and 'bad' years the average chance of going bust when any year is picked at random, with no knowledge as to whether that year is good or bad, is 1 in 30. Spookily similar to a finance institution with a BBB rating!
So when you see a BBB rating applied to a finance institution like this, what is the chance that in any particular year the chance of going bust is 1 in 30? There is actually no chance at all that this will happen! But that doesn't mean the 1 in 30 year risk ratio when applied to this particular financial organization is wrong.
SNOOPY
As far as I understand it, the credit rating is the probability that the bank will default in the next 5 years from the time the credit rating was issued. Therefore whatever probability that is (e.g. 1 in 30), it's only valid to estimate the risk for the whole 5 year period starting at that point in time. You can't use that probability to estimate the risk for any given year (e.g. you can't say for any particular year that the bank has a 1/30 chance of defaulting). So if the BBB rating was issued 2 years ago, you don't know what probability of the bank failing this year or next year is. If you want the probability of it defaulting in next 5 years, you'd need the credit rating to be reassessed again based on current information.
That's how I see it too Cricketfan.
Interestingly though banks rated AA are rated a 1 in 300 chance of failure. Banks like ASB, BNZ, Westpac and ANZ are all rated AA- so technically within the definitions as laid out by S&P and Fitch your money is ten times safer there than with a bank rated BBB. I doubt many depositors have a handle on that. In my view this also explains why HBL's PE must be a lower multiple than a major AA rated bank because the same risk premium needs to apply to equity investors who are first cab off the rank when it comes to taking a haircut.
I would assume with the rating being a one in 30 over 5 years that the rating would have "good" and "bad" years calculated in the mix. Note that it is not a one in 30 chance in a year - it is a one in 30 chance over five years - so the chance may be lower or greater for an individual year. I do not believe the risk rating of BBB is wrong.
"bbb Good fundamental credit quality‘bbb’ ratings denote good prospects for on-going viability. The bank’s fundamentals are adequate, such that there is alow risk that it would have to rely on extraordinary support to avoid default. However, adverse business or economicconditions are more likely to impair this capacity." https://www.fitchratings.com/web_con...and_scales.pdf
I think you are confusing the 1 in 30 chance over a 5 year period with a one in 30 year event. In weather terms a one in 30 year event is "expected" to occur within the 30 years. In probability one in 30 chance is different.
Let use the odds of rolling 2x D6 and both coming up with a 6.
There is a 1 in 36 chance of this occurring on each roll. Over 36 rolls what is the chance that you have not rolled 2x D6?
I would say around 0.36721
What this 1:30 year rating really means is that the chances of not going bust in the next 30 years is slightly better than a third. A better question may be 'Over what period is there an equal lilelyhood of going bust or of staying in business?"
That works out to just over 24.5 years
I would argue that the probability of a bank failing is more atune to a 'weather' event. A bank must navigate financial storms. There is nothing in the reserve bank statement on 'Explaining Credit Ratings'
http://www.rbnz.govt.nz/-/media/Rese...8179.pdf?la=en
that says anything about each year bering independent, and risk being a summation of independent trials. That is something that you introduced into the explanation Axe.
When throwing two dice, the chance that you roll a 6 on both dice is 1/6 x 1/6 = 1/36Quote:
Let use the odds of rolling 2x D6 and both coming up with a 6.
There is a 1 in 36 chance of this occurring on each roll. Over 36 rolls what is the chance that you have not rolled 2x D6?
Therefore the chance you will not do this is 35/36
The chance of not rolling a double six twice in a row is 35/36 x 35/36
The chance of not rolling a double six 36 times in a row is: (35/36)^36 = 0.367 as Jantar said.
Now your question Axe. What is the relevance of this to assessing a credit risk of a bank like Heartland?
SNOOPY
Let's put this question in a more Heartland relevant way. There are two investors, each investing $10,000 with Heartland on the same day.
1/ Investor A puts their money in a Heartland term deposit for 5 years. Interest is compounded annually.
2/ Investor B puts their money in a one year Heartland term deposit. Upon maturity, investor B reinvests their term deposit plus interest earned for another year. Investor B does this for five years in total.
Over the five years the credit rating of Heartland does not change and the interest rate curve remains flat (i.e. the one year interest rate is the same as the five year interest rate). The actual interest rate earned from Heartland does not change over the five year period.
Now hopefully Axe, you will agree with me that at the end of the five years both Investor A and Investor B will have excatly the same amount of money in their Heartland account. But which investor, A or B, has taken the greatest risk over the five year investment period?
SNOOPY
If you assume that all years are independent (which I would argue they are not), and the chance of going bust in one year is one in thirty (which some others don't agree is the right interpretation of reserve bank risk) then.
The chances of not going bust in any one year is 29/30. So taken of 30 consecutive years
(29/30)^30 = 0.3616
or 'slightly better than a third'.
(29/30)^y = 0.5Quote:
A better question may be 'Over what period is there an equal lilelyhood of going bust or of staying in business?"
That works out to just over 24.5 years
=> ln(29/30)^y = ln0.5
=> y x ln(29/30) = ln0.5
Working out the natural logs then solving for y, gives y = 20.4 years
SNOOPY
My calculations may be correct. But does either of those calculations that I did give the right answer to the questions posed?
Now another question. Heartland seem to be soundly run. So how do they move up from their bottom of the barrel bank BBB rating? Or do the niche markets they operate in, forever condemn Heartland to remain BBB?
SNOOPY
Investor A and B have taken different risks with choosing between a 1 year TD renewed 5 times or one 5 year TD. I would not agree that they would have "exactly" the same money at the end unless the interest rate offered to both was the same at the time of deposit and did not change at all over a 5 year period - which is unlikely.
In my view the depositor that has taken increased risk is the depositor with the 5 year.
This risk is normally rewarded by the bank offering a higher interest rate for the longer period. The depositor takes some interest rate risk ( that interest rates may rise and they miss out) they take the risk that their personal circumstances may change over the 5 years and they may have to withdraw their money early (resulting in loss of interest and fees.) They also take risk that there is a one in 30 chance over the 5 years that heartland may not be able to pay in full and on time (credit risk).
There is an amazing correlation between risk and return.
http://www.heartland.co.nz/content/i...ent-rates.aspx
12 mths 3.40% p.a
5 years 3.70% p.a.
The difference between a one in 30 chance over 5 years and a one in 30 chance for a single year is significant - if there is a one in 30 chance over 5 years - what is the chance for a single year?
Axe, as unlikely as that may seem, if you had read the entire question, you would have seen that I was asking you about just such an unlikely scenario. Changing the question to make it more realistic is pragmatic and sensible, but it doesn't address the question I was asking you!
(Snoopy's head looks up expectantly and tail wags)
I am still hoping Axe that you might take pity on a poor mutt and answer the question that I asked. After all, I did answer the probability question that you put to me. However, failing that, I can come at what I see as 'the issue' from a different angle.
So now to the new question.
The 'one in whatever' ratio (1:30 for a BBB organization) interpretation that the reserve bank quotes in their explanatory notes is
"The approximate, median likelihood that an investor will not receive repayment on a five-year investment on time and in full, based upon historical default rates published by each agency."
Suppose I had taken out the following five term deposit investments with Heartland.
1/ A five year term deposit taken out in FY2012
2/ A five year term deposit taken out in FY2013
3/ A five year term deposit taken out in FY2014
4/ A five year term deposit taken out in FY2015
5/ A five year term deposit taken out in FY2016
Which of these investments (could be one, more than one, or none) does the implied current Heartland BBB credit risk 1:30 of not being repaid apply to?
SNOOPY
Heartland Bank can trace their history back to 1875.
At no time have they ever not repaid an investment on time and in full to the best of my knowledge.
So after 140 years, I would think the odds are very much in favour of them continuing to repay investments in full and on time.
For most of those years loans were approved by directors who;
Were in the same class at school as your big sister,
Drove past your farm on the way to the meeting,
Brought or sold goods and services with you, or
Had a quiet word with your boss at the County Club
Does this happen now?
Boop boop de do
Marilyn
Thankfully Heartland Bank have evolved.
The next big advance for banking is digital/online.
Heartland are at the forefront with products that suit their modern clients needs.
Are No, HBL s history is only a couple of years old, 1875 you refer to Ashburton permanent building society,HBLs management is totally different now so you can't extrapolate that as being THEIR history. This is a new era and entity.
that being said,doesn't mean management won't work to the same principles.
Yes right back to 1875 and the Ashburton Permanent Building Society.
Bit like Westpac, which was formed in 1982, but their history goes back to 1861.
Now we can understand the significance of Heartland holding their first agm in Ashburton,and the wonderful mural Heartland had on their Ashburton building, showing Heartland's history timeline.
Since 2012 heartlands credit rating has been upgraded.
22 May 2014 S&P upgrade
29 Oct 2014 28 October 2014
Heartland New Zealand Limited (NZX: HNZ) is pleased to announce that Fitch
Rating (Fitch Australia Pty Ltd) has raised its long term issuer credit
rating on HNZ subsidiary Heartland Bank Limited (Bank) to 'BBB' from 'BBB-'
outlook stable. The full release from Fitch Rating is attached.
Fitch Rating noted the Bank's consistent reduction in non-core assets
resulting in improved asset quality and stronger earnings, and that its
business model focuses on niche markets in which it has a leading market
share.
Heartland is pleased with the raised rating, which follows Standard & Poor's
raising the Bank's credit rating earlier this year (22 May 2014).
Snoopy - I have a lot of respect for you and your contribution to ST.
However I feel we are losing relevance to this thread and/or covering things that have already bene covered in depth by other posters
I am happy to continue our discussion via PM if would would like. :)
Good to see CEO Jeff Greenslade, and head of banking Chris Flood, adding to their holdings.
Confirms they believe what they have been saying at the presentations they have been giving.
Yes, though are you sure they paid for the shares themselves? Shares have been bought under the existing "LTI scheme". Correct me if I am wrong, but I assume the abbreviation stands for something like "Long Term incentive"? Might be just free money (i.e. paid by share holders) for the senior management team ...
Hey t-j - reckon the share price will get to $1.30 and stay above it this time around
winner69, I believe heartland are very well positioned ;)
As they say every dog has it's day and Heartlands day is finally coming eh
Once past 130 only another 10 cents or so to get back to where it was 18 months ago
Think nextbigthing meant 160 and not 106 in his recent post - 160 by time of full year announcement - nothing in the way to stop that is there.