[QUOTE=janner;388844]Sorry Ken Ring brought the whole lot.Missed mine as it was a display model without the box or instructions.
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So you are saying NZ is going to better in your opinion ??.
IF so... OUR BANK will also do better.. CAPICHE ??..
No mouse.. Cash up... Put your money into the safest currency in the world and receive..... .. ..
hmmm..hmm..hmmmmmmm.. 1 ( one ) percent interest if you are lucky.. as it devalues..
My money is on the NZ HEARTLAND..
[QUOTE=mouse;388846]Everyday people are selling shares as they either want the money or think they are over priced,while others have money to invest and think the shares they are buying will produce good divies and share price growth.
Every one who owned PGC shares got seriously burnt.If they think HNZ is the same as PGC they are wrong.
Do not be too pessimistic.Govts in America and Europe have huge debt,but remember the listed companies have very strong balance sheets,and the people in Europe carry very little debt,while the American public have been reducing personal debt.Oz govt has very little debt.In Christchurch look at all the new utes and four wheel drive vehicles the tradesmen are driving. All the cranes,huge new poo trucks,etc.[all on time payment or leased.Think HNZ]
Janner, I live in Christchurch. The level of damage here is fairly large. As far as I can guess, there are 50,000 homes needing replacement or repair. So whilst the world stews we could be OK. Providing the insurance companies dont go bust.
Ansvar has. But Ansvar NZ, not the Ecclesiastical Insurers of London. The London lot have just walked away.
Now, that is important. A major company has said, not my problem. Stew. And walked.
Which brings us to Heartland. A Kiwi Company. People with cash in overseas owned banks need to look at Ansvar, and consider if their own bank could just walk away. 'Sorry Chaps, your cash has vanished. Bye.' People should put their cash into NZ owned banks. Not Heartland if you own shares in it. Spread your risks.
Percy, the problem is people got burnt with PGC and the other companies combining to form Heartland. One of my mates had 'shares' in Southern Cross. They refused to let him cash the shares in. Southern Cross got expelled from the Association of Building Societies, or whatever it was called. The problem is those people are all wanting to dump their shares. Which will depress Heartland shares.
My conclusion. Heartland shares are a 'hold.' They were a buy at 50 cents. Thankfully I had the cash to buy some at that price. We can look to reasonable dividends in the immediate future. As you say Percy, the amount of new gear in Christchurch is amazing. I am sure Heartland is active in the market.
Next, in a financial crisis, the last thing to hold is cash. It can vanish as in Weimar Republic or, after the war, West Germany cancelled all their cash and gave everyone fifty dollars or whatever. Bank notes, bank deposits, the lot, were cancelled. If you owned buildings that were still standing, or other assetts, you escaped the haircut.
Mouse;company fortunes change,good people come on board,and people change their opinons.Ryman did nothing for a couple of years and people sold out.Share price is now about 15 times what they sold for.Mainfreight came on the market and were going to take on the world,only to fall over in Aussie.People who sold ,have seen that share go up 10 times.Ebbos looked as though they would lose a hospital contract.People who sold have seen that share go up over 10 times.Skellerup went through a number of owners who along with shareholders lost their capital.Now a very strong company with little or no debt.
HNZ has set the foundations for a prosperous future.Sellers will miss out!!
Quite. My crystal ball says 90 cents, December 2014. The Genie supplied with it agreed.
Percy, crystal ball without Genie, suggested 12 Dec 2014 at 12.43? $1.57.
My ball would not go any further, even with prodding.
Percy got 2015 $2.38 and Dec 2016 over $3.00.
What I think we all agree with, its a hold. Those who want quick profits, well you made them between 50 cents and 70 cents. Pretty spectacular actually. So wait to December 2014. I will be delighted to be proven to have a crystal ball price that is far too low.
One problem is that cheap, on sale, Crystal Balls, even with a Genie, are a bit unreliable. Plus can break down. Getting them serviced is a problem.
[QUOTE=janner;387893
Think it maybe a while before any decent upward movent is seen .. Every one has already positioned themselves..[/QUOTE]
From my post 822.
mouse. Your comment that you have enough at present goes to back up my post.
Others are talking about resistance @ .70c
It is not resistance .. It is prudence or empty pockets, to spend any more on HNZ than they already have ...
Looking forward to the Feb figures..
You can have to much of a good thing they say..
Dividends. It seems to me that the minimum dividend is 1 cent interim, 1.5 cents final. They have to pay 3 cents annually to get real support for the shares. A 4 cent dividend seems impossible to me. Any ideas?
Happy New Year.
I think it would pay to wait until Feb when the interim result is announced,then we will have a better idea of how they are trading,and will know if, and how much they are paying in the way of interim dividend.Only a few weeks away.
It was not long ago that posters on this thread we saying we would not see a dividend, or a banking licence for sometime.!!!
There seems to be an orderly distribution and accumulation of shares at the .69c level,very healthy I think,been going on for a while now.
I sort of think that maybe the instos will let the market cool down a bit in the new year,just to see where prices head in the short term,after such a good year.
A friend phoned today. Kiwi bank has, or will on Monday, close his account. He was, very foolishly as it happened, demanding that Kiwi Bank did what its adverts said it did. A new bank is needed. I suggested Heartland. Sydenham.
Alas, the branch is no longer there. A victim of Progress. Gone. So I looked on the Heartland website. To find the branches. In the South Island.......
Which consist of, Rangiora, Ashburton and Riccarton. Our total number of South Island Branches.
My mate appreciated the information, and is still without a bank. He did say that the TAB is a good option, with branches everywhere.
Percy, Kiwi Bank is closing his account.
TAB is a good bet, but weak on overdrafts maybe.
Westpac, ASB, BNZ are all overseas owned. In Christchurch, as you know, we have just seen Ansvar the insurance company go broke in NZ. It is still solvent overseas, but is not fully paying their claims in NZ. Plus have closed down now in NZ. So he would prefer a New Zealand owned bank. But not go to Rangiora to deposit cash!
I used to buy meat at Cross Bros, then the young chap, James, took it to Spotlight. His wife then told him to move from Christchurch due to quakes. She wasnt staying. So he went. Pack and Save is now it.
No, No, Percy. He is a very strange, and dying breed. He actually works for a living. No Gold Card, but he would like a few South Island Branches with a couple in Christchurch. It seems amazing that such a bank, except Kiwi Bank and SBS, does not exist. Kiwi Bank is cancelling his account!
The Cooperative BANK has branches at Papanui and Riccarton as well as at Burnham Camp (jeez more branches than that thing that has a equity ratio to be proud off)
And mouse no overseas shareholders ..... actually no greedy shareholders at all ... so would be working in the interest of your friend and other depositors .... just like banks were meant to be
I have some money with them
Wish him well at the Coop.
Maybe there will be enough demand for a Coop sort of web site, where Coop members could have their say,like those of us who follow shares do on sharetrader.
If New Zealand owned is important, then TSB Bank should fit the bill.
Based in Taranaki, so I'm unsure about branch coverage in other area, but I have used their online services for a long time with no problems - best service I've come across.
On list of shareholders I have dated 10/12/12 NZ Central Securities Depository Ltd., held 16.8433% of the HNZ shares.I have no way of working out which instos make up that holding.
In shareholder notice 3/12/12 ACC reduced their holding from 7.460% to 6.443% having sold 395,825 shares at average .6925 cents per share.I also note Bryan Mogridge sold 75,000 shares.May be increasing his Rakon holding.???? Bernard Wimp [lo baller] still holds 2mil shares,while Hugh Green Investments hold 1,589,780 shares.
He did think of them, will probably do so actually. But it does underline the hill that Heartland has to climb. Of course, they are using PGGWrightson as a sort of branch. But for lending. Depositors probably would like a bank with at least a facade on the building!
TSB could do, they have a Sydenham branch.
[QUOTE=mouse;389262] But it does underline the hill that Heartland has to climb. Of course, they are using PGGWrightson as a sort of branch. But for lending. Depositors probably would like a bank with at least a facade on the building!
Not so.Heartland have no trouble attracting depositors.
Percy .... HNZ spokesman
You mentioned a targeted ROE that hnz was going for in one of your reports. What was it and was their any rationale in coming up with such number
At the AGM some one asked Jeff Greenslade why HNZ were only achieving 4% ROE.He replied that he intended to get the ROE into double didgets.
[Can't remember if he gave a time frame,but don't think it will take too long].
I think SCOTTY posted UDC result,which I think HNZ should be able to match in the not too distant future,ie and I still think the ROE achieved by ANZ and CBA should be HNZ's goal.
Beauty of the share market is that you can sell any time you want.If you have paid less than current SP you make a profit, as well as getting your equity back.Should the SP be less than you paid you take a loss and get back what ever equity is left.Each day people are buying and selling,some making a profit,while others make a loss.Should you keep making profits you are making the right decisions.Should you keep making losses I think the sharemarket is not for you.
I am not too badly hit from all this. But NZ, Kiwis, have had to put up with leaking buildings, the collapse of Finance houses, earthquakes, decline of wages. Bankrupt insurance companies. I am pretty surprised there is any cash left in our islands.
Return OF equity is still pretty important.
Most companies on NZX have very strong balance sheets and are paying good dividends.I believe the banks are full of money.Steel and Tube placement of approx $90mil was sold down by one broker within 20 minutes.Pent up cash waiting for SOE floats.Kiwi Saver is increasing quickly and looking for investments.Travel overseas,or read articles on overseas and you will realise how lucky to be living in NZ which has rule of law,stable government,and a strong ecomony.Trev "you don't know how lucky you are."
A target ROE of say 14% implies a relatively high degree of leverage ....more than at present ...and sort of says more 'risk' has to be taken on
hnz remuneration policy seems a bit vague ......do you know much about that Percy
Question then - is improved roe part of execs incentive?
The 14% may be too high a target,but in time we should see the $160mil to $180mil of non core property assets sold,and think they should get good returns from car,truck,machinery,livestock financing etc .If they develope what they are good at, and what they know, risk should not be unreasonable. They are not looking to be everything to everybody,and I expect [or hope] the branch roll out will be slow,therefore overheads charges should be modest.
HNZ remuneration policy,I have not read,so can't comment.[I have never been able to understand one incentive plan. I have always felt they are a transfer of wealth from shareholders to management ,and I have a record of always voting against them]
You have convinced me that 14% roe is a reasonable target
If achieved why the heck would you want them to pay divie ......hard for you make that much after tax. ...so let them do it for you
After 5 years equity would be 722 million ..... Keeping that equity ratio everybody is envious of they would have over 7 billion lent out
Good eh ...share price would reflect that ....so don't ask for divies .....please
Makes you realise how quickly and profitabily financial intos can and do grow. Any time the "big" banks have been in trouble and come to shareholders for funds they recover very quickly.I am thinking of Westpac in the early 1990s when it looked at one stage Kerry Packer was going to take them over.!!! I think all the "big" Aussie banks have problem [Aussie] residential loans,which off course HNZ don't have.[Although they have their non core property problem].
History confirms you are better off owning a bank,rather than having money in the bank.
Remuneration policy .... esp around exec incentive and relevant KPIs .... seem to be out of the public domain (confess i didn't look too hard) .... except the committe sees that is tied to enhancing shareholder value .... yippee
Have written to them asking if there are documents outlining such things that investors might be able to see to from an idea of how they are going to enhance shareholder value ..... in other words percy how they are going to transfer wealth from shareholders to themselves
Just been looking at the latest (FY2012) ANZ annual report. With Heartland now a bank, it is always good to look over your shoulder and see what the competition are doing.
The balance sheet on page 74 shows net assets of $41.220m. Net loans and advances are listed on the same page $427.823m. So I get an equity to loan ratio of:
$41.220m/$427.823m= 9.63%
ROE based on end of year equity was
$5.661m/$41.220m= 13.7%
Of course the true ROE figure uses the average equity over the year. But for ease and consistency of calculation, this is the way I like to do things.
Return on equity seems to be slowing as a result of tougher conditions in the whole banking sector. So maybe that cash issue to shore up the Heartland balance sheet is a bit closer?
SNOOPY
An update on the position in Australia that Percy in particular is very concerned about: Bonds and Notes (see Note 27) have increased to $63,098m. Add that to shareholders equity of $41,220m and total available capital to ANZ is now $104,318m. That is a 10% increase on the $95,404m available at the end of the previous financial year. The Aussie crisis is receding!
If you regard the bonds and notes as 'quasi-capital', then ROE for ANZ drops to:
$5.661m/ $104.318m = 5.4%
Realistically, IMO, this is the kind of return you should be looking at as the long term potential of Heartland Bank.
Heartland bank had equity of $343.7m at last balance date. So assuming all of that equity can be worked we are looking at a long term profit potential of:
0.054 x $343.7m = $18.6m
So Heartland are overperforming the benchmark by quite a long way in FY2012, with a $23.6m profit. Of course with a bit more shareholder capital, perhaps $23.6m is sustainable long term?
SNOOPY
Come a banking licence and how the Heartland rates have changed from September 2012: Call rate 4.0% (+0.25%), 90 days 4.2% (-0.3%) and 12 months 4.55% (-0.45%). The best of the big four banks (actually all of them) now offers 3.25% for 90 days.
So the Heartland risk margin over 90 days is now:
4.2% - 3.25%= 0.95%
On a one year basis Westpac and BNZ offer the best depositor rates at 4.2%
So the Heartland risk margin over 12 months is now:
4.55%-4.2% = 0.35%
The 12 month margin is trimmed there from 0.5% 'pre-bank'.
That means Heartland are competing more vigorously for depositors funds at the shorter end. Trying to grab market share? Good for growth. Maybe not so good for profit margins?
SNOOPY
Snoopy .... for most periods >12 months Heartland term deposit rates are currently very attractive .... .3% to 0.5% more than Rabo or Cooperative BANK
Some Cooperative money due to be reinvested soon .... might have to go to Heartland ..... but would hate to as the reason for coopaerative is around the social conscience side of me ..... hate seeing greedy shareholders making dosh on my dosh
Conclusion - Heartland trying to attract deposits with very attractive rates? Good eh or is it bad? Or did they really work out that Cooperative BANK was doing better than they were at attracting money?
I do like winner69's sentiments, but is he is talking to the wrong forum? ..... this is about money and making it work.
I'm on Percy's side, probably less for myself than for my grandchildren
Mr garfy - some of us don't have all our money 'working' in the share market all the time ..... and the comments are relevant to this forum and thread in that they supported snoopy's little analysis in that heartland probably/may be buying business and it may be hurting their margins short term ..... or even worse that Cooperative Bank might be doing better than them
Agree percy better you own the bank than having money in it (over the long term) but just like you percy some of our money is 'in' the bank isn't it
Some could say that other BANK gives you the best of both worlds - having money 'in' it as well as owning it (though I have yet to work out what you get from 'owning' it yet)
Jeez - twice in a few weeks I have been told off . castigated by fellow posters for putting things in the wrong forum .... either the world is going stupid or there has been too many full moons. About time for some more raves about Occupy and what we should be doing to cut greedy bankers and shareholders down to size
Good bit of advice from 12 to 14 year olds St.Agnes School,via Peter Lynch in Brian Gaynor article in this morning's Herald.
"Investors should look at small companies,because as a group they tend to out perform the larger ones over the longer term."
We should remember their advice when comparing Heartland with ANZ and Westpac.
ps.Brian Gaynor article well worth the read.
Next full moon you should go to the Vatican and tell the Pope there is no God.!!!!!! lol.
Wouldn't mention your Co_Op idea for the Vatican Bank .They got into enough trouble on their own!!!!
No greedy sharehoders here,only nice people wanting to improve their knowledge about listed company shares,so as they may become more successful at investing.
I would be interested to hear anyones comments as to the flat share price for Heartland. It has hovered between 68-70 cents for around 3 months now.
I suppose it is taking time for the shareholding to settle down.G Kerr sell down,other short term holders,and others waiting for the banking licence.All that is behind us now,so we have to wait until [mid]February for the interim result.
After all said and done [usually more said than done] it will be the earnings and expectations of future earnings that will drive the share price.
The problem seems to me to be that banks around the world are in some trouble. This is from the Telegraph,
http://www.telegraph.co.uk/finance/n...-BoE-says.html
The comments on the news are also interesting. I am pretty happy with Heartland at the present price. But things could go sour. Having shares is always more risky than having gold bars.
Thanks winner69.The SP looks poised.!!!
Surprised the market did not react to Belgarion picking HNZ in sharetrader competition on 12/1/2013.
I expect most of us on sharetrader are awaiting his notification that he is building another one of his famous pyramids.
Then all of us loyal disciples will join in, singing "Onwards and Upwards," composed by none other than our own winner69.
Ramping urgently needed. Percy, we are relying on you! All the mice are in disbelief.
This may be the last boarding call before the train leaves the station.Just clearing the rats and MOUSEs, and other nervous nellies out of the carriages,so the smart money can enjoy the journey.The advertising blitz [as promised by the Chairman at the AGM] should be starting shortly.
Poised, for renewed trajectory.Fasten your seatbelts.!!!!
freeeeedooomm!!!!!
Not so.!!! As Heartland BANK were waiting for their banking licence,which was delayed,they put off their advertising blitz.Once this advertising blitz gets underway,every one will want to be on board.In the meantime, to keep the faith visit www.heartland.co.nz
Percy ... unless retailers have a decent estatline operated online shop they are dead eh
This is what is happening with banking
http://www.nzherald.co.nz/business/n...ectid=10860090
Maybe HNZ future is being niche ..... getting back to heartland roots and doing it the old fashioned way ... talking to people in branches ......stuff this wizardry internet stuff
What ever business you are in you need to be close to your customers,ie on line,on phone or if you want to be "really" close you follow Heartland's example and go to your customer.Heartland's man/men are at the saleyards where farmers are buying stock.Heartland is there,on the spot.! That is "really close". Old fashioned way,using latest technology.Yes HNZ are concentrating on niches.
Yip - just wait for marketing push. Still selling below NTA it is a bargain at present.
I just hope they have the technology all set up as there are lots of people that would like to move away from the Ozzie banks.
Is this train traveling on the Gisborne to Napier line or Vice versa
A great lot of comments. I shall retire to the mouse hole for a bit. But still counting on Percy to do the ramping. Plus, dont trust Possum the Cat. Even on the gravy train.
Trades have been pretty steady - 565K yesterday and 1m on one day earlier in the month and most other days 100/200K but there has been a solid wall at the 69/70c mark which has been hard to move. I see that the closing sellers yesterday are: 43K @ 68c, 492K @ 69c and 753K (down from 1.3m) @ 70c so the wall is coming down :).
I am a large holder of HNZ as I see their SP to be a bargain also (even more so when I bought most of mine at 54c!). Below NTA for a bank in one of the worlds most profitable banking markets, with good management and who is already making a growing profit which puts their SP at around $1* right now... you're mad if you don't buy them even at 70c I reckon. I think this year, if their marketing campaign is successful, they will prob top 40 million, giving them a SP in the $1.70 range but more importantly a solid divie! If they continue to perform, we could be looking at really good divies the next few years at least.
*Based on 6% return, 24 (million profit)/388 (million shares)
Which gives 6 cents per share, with a 50% dividend policy, which they could adopt, provides a 3 cent dividend. The dividend level is what will raise the share price. Plus the SP has to rise to enable HNZ to make a cash call. A Cash Call has to come to finance any expansion.
If they made 14% return on equity and didn't pay divies prob never need to raise any more cash .....double equity in 7 years ....pretty good eh
Surely reinvesting at 14% return is better than giving it back to shareholders in this early stage of growth
Why does an increased divie needed to raise the share price?
With 16%
YES 16%
and I will repeat, 16% equity ratio HNZ has a huge capacity to expand without raising further cash.
You will not find an institution in Australasia with a better equity ratio.
Also profitability will add to the 16% equity ratio.
Only requirement for further funds would be if they took over F&P Finance,in which case they would most probably do a placement to institutions.
People buy shares for either a dividend stream, or a capital gain. The present shareholders of HNZ had a dividend stream, particularly from Pyne Gould. Maybe we have to have a new lot of shareholders who are in it for a capital gain. They of course will buy at 50 cents, as I did for the majority of my HNZ shares. But the shares allocated from Pyne still make me a bit furious. The NZ sharemarket is a bit like the Wild West. In fact, it is the wild west. Unfortunately no sign of John Wayne, nor Tonto on the horizon.
[QUOTE=mouse;390660. But the shares allocated from Pyne still make me a bit furious. The NZ sharemarket is a bit like the Wild West. In fact, it is the wild west. Unfortunately no sign of John Wayne, nor Tonto on the horizon.[/QUOTE]
.
Bit like the sharemarket crash of 1987. Learn,get over it, and move on.
HNZ is a very good company,building a bright future for New Zealanders,borrowers,lenders and shareholders.
The point is, Christchurch is a bit hot. Much better to sit at the computer than riding over the range, even with Tonto. Problem Percy is that the Pyne investors, and I was one at a fairly low price, have not got over it. They are waiting to sell. Plus CBS lot want to sell and joined by the Southern Cross lot. All of this is depressing the SP. How long it will be hot for in Christchurch, or how long it will take the unwilling holders of HNZ to divest themselves of the stock is a bit unknown.
When I price a company, I generally don't do it based on what they state as their divided policy, particularly if the company is in growth phase. Imagine Apples price over the past few years if all investors did that! I assume that any money that is not handed out as divies (particularly with financial instos) will go towards bigger divies later. As others have said @16% equity they are looking pretty hot in that department already plus their stated desire to become "a regular dividend payer", what more do you want?
I am a fresh investor in the company so don't have any bad feelings of previous mischief from when they were separate instos. If those that do want to mistakenly sell their shares for less than they are worth, thats not my problem. All it means is the SP will lag behind its real value for longer than it should.
Currently HNZ is offering some damn good deposit rates. My feeling is once these are advertised strongly it will result in more deposits, more money to loan, while maintaining their good equity position and returning higher profits.
I am always the optimist however I haven't seen any convincing arguments yet to dissuade me of said optimism.
Blobbles, the situation that people are not only thinking of selling below the assett backing of their shares, but are doing it in droves, is holding down the price. I think that anyone going in now will do well. At 50 cents investors got the shares at half price to assett backing. What we are seeing is an irrational reaction to past problems. So I actually think Percy is totally correct in his postings. However, he does not look like Tonto and may not even be able to ride a horse.
you have exposed the 'problem' as to why it trades below nta. I have tried to make this point before, and it remains a key reason for my reluctance to become a shareholderQuote:
I am a fresh investor in the company so don't have any bad feelings of previous mischief from when they were separate instos.
almost everybody who owns these is pissed off, under water to varying degrees, or is impatiently waiting to see some action. In addition to those who have these in their portfolio at ~88 cents, you have subunderwriters to the cap raise from 75 and 65, and (possibly/probably) the "smarts" who took PGC's holding off them cheap, looking for an exit as well.
it's no wonder it can't gain traction!
that said, percy will have his day in the sun, it's a matter of having the patience to hold them for another few years
Thanks Xerof.
As I have come to expect from you an excellent post with very valid points.Heartland will not happen overnight.It is however happening,and your advice to be patient should be remembered by all Heartland investors.I well remember selling my Ryman, that I got at the float,after a couple of years as "they didn't seem to be doing much."I certainly am looking forward to my "day in the sun".!!!!
In the interim, people are going to sell some of the shares once the price looks acceptable, and hold the rest. So it is not just fed-up investors who are looking to sell all, it is quite a few who need to balance their share holdings and get some of the new John Key opportunities. Which will see more value? How much to have in HNZ? So the SP could well be under pressure for two years. Having said that, a price around 70 cents could well be satisfactory for a handy number of investors.
Your missing nothing Sparky,it has been stated all along there were about 89cents of nta/share,the fact the market doesn't reflect this is a mystery,but inevitably they will claw their way back to reflect that value I guess when they prove an increasing bottom line.
However the fact the market has risen so much,and is roaring ahead whilst HNZ languishes, and is also a safer bet than most at current valuations hmmn. I can only suggest they will have their day when the rest of the market corrects,and people start looking for cheap overlooked stocks.I still think this stock will be excellent accomodation for my share investment dollars.Patience.
For me there are no negatives with this company,it is holding it's value at the most at the mo.
But I'm looking for the boring steady performer to eventuate,once runs start to be scored.
I guess for you,you just need to wait for the move above 70c,and don't need to do anything until that happens.
Heartlands share price should be in the 90c to $1 mark, given both their NTA and their profits are about 6c per share plus their excellent equity position. See the previous few posts why it isn't there though, pissed off holders keeping the price down most likely.
People claim there aren't any bargains to be had on the NZX obviously aren't looking at these guys. They are my largest holding, not because I expect a capital gain but because I expect an excellent and growing rate of return. My pick is a 6-10c dividend this year, at below 70c SP, thats a damn good bargain.
Remember they are sitting on quite a bit of cash, are a fully NZ funded and new bank in a banking environment that is highly profitable and has lots of customers who will switch loyalties for a higher rate of return (and check out thei current savings account rates, 4.5% for 1 year TDs and much better saving account rates than the other banks). Their growth, should they play their cards right, which they seem to be, should be assured.
I considered buying late last year. I decided not to based on the unknown costs (on-going and one-off) of bank registration, the amount of loans they must have in Canterbury that are still the subject of claims, and the cost of new branches and consolidation of others.
I like the target market they are aiming at. I don't know if they have the economies of scale to prosper in an all out mortgage war between the majors.
Will keep an eye on them, but suspect they will plod along for some time yet.
The whole question is, what is the dividend this year? If we get a 6 cent dividend I will be over the moon, as will the share price. I think it far more likely to be a three cent dividend, one cent interin, two cent final. Three cents might move the share price, but I doubt it. Plus bank shares around the world seem to not be in demand. We have lots of sellers at 70 cents. There will be more at eighty cents. And that is the problem, people do have a memory and those who were badly burnt might not have further appetite for a barbecue. I think Heartland is OK, but time has to pass before the share price recovers. Which means its a hold medium term if you own Heartlad shares at present.
At that rate you would be better putting money in HNZ than owning it ... at least this year
Just winding percy up
still can't see why you guys think it so important to give most of the earnings away as dividends .... surely with a target of achieving 14% ROE you are better off letting them using your money .... unless you have better investements erning more than 14% pa .... and if this is case why be in HNZ in the first place
The problem is, most investors in Heartland originally put their cash in to get an income stream payed every six months. So it is not just important to pay regular dividends, it is essential. Three cents annual dividend should hold the share price where it is, or may even persuade it a bit higher. We just have to wait. Another two years or more.
But if they kept all the earnings and still made the promised (sorry targeted) 14% ROE all the cash would be working hard growing the company by lending out more and more
Shareholders would be better off in the long term if all earnings (no divie) are reinvested at 14% - shareholder equity would double in 7 years ... and go up at a faster rate
You are most probably right.Each $16mil of net profit gives them the capacity to fund an extra $100mil of lending while retaining their 16% equity ratio. Compounding growth from retained earnings certainly adds value to any company, makes dividends seem a waste of valuable capital.