Announcement

FLLYR: HGH: Heartland announces full year NPAT of $72.0 million 09:50am 
HGH
17/09/2020 09:50
FLLYR
PRICE SENSITIVE
REL: 0950 HRS Heartland Group Holdings Limited

FLLYR: HGH: Heartland announces full year NPAT of $72.0 million

NZX/ASX Release

Heartland announces full year net profit after tax of $72.0 million (or $78.9
million adjusted to remove economic overlay for COVID-19)

17 September 2020

Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) achieved a net
profit after tax (NPAT) of $72.0 million for the financial year ended 30 June
2020 (FY2020). Included within this NPAT is an economic overlay of $9.6
million pre-tax which Heartland applied to its potential credit losses in
response to the ongoing uncertainties relating to the COVID-19 pandemic. The
adjusted NPAT (which excludes this economic overlay) is $78.9 million.

Highlights for FY2020
o NPAT of $72.0 million.
o Adjusted NPAT of $78.9 million (removing the economic overlay of $9.6
million pre-tax), up 7.2% ($5.3 million).
o Gross finance receivables (Receivables) of $4.6 billion, up 4.9% ($215.0
million).
o Return on equity (ROE) of 11.4%, up 31 basis points (bps).
o Net interest margin (NIM) of 4.33%, flat on FY2019.
o Net operating income (NOI) of $235.3 million, up 13.2%.
o Cost to income ratio (CTI) of 45.4%, up 3.8 percentage points (pp). After
allowing for changes in the accounting treatment and one-off impacts, the
underlying CTI is 44.5%, up 4.6 pp as a result of significant investments in
areas of strategic importance.
o FY2020 final dividend of 2.5 cents per share (cps), taking FY2020 total
dividend to 7.0 cps - a decrease of 3.0 cps (as a consequence of restrictions
imposed by the Reserve Bank of New Zealand (RBNZ) on distributions by banks
in New Zealand).
o A dividend yield of 8.2% (8.6% in FY2019).
o Earnings per share (EPS) of 13.7 cps, up 5.2%.
o Heartland has transitioned through a number of strategic phases to
establish itself as a digitally-led financial services group, 'a financial
technology company (fintech) with a bank licence'.
o In May 2020, Fitch Ratings (Fitch) affirmed Heartland's Long-Term Issuer
Default Ratings and Outlooks. Heartland Bank Limited (Heartland Bank) was one
of only two Australasian banks to have no reduction or adverse change to its
rating or outlook as it entered the economic downturn.
o Established new products to support customers affected by COVID-19.
o Digital tools such as electronic document signing and biometric facial
recognition enabled motor vehicle dealers to continue to offer Heartland's
motor vehicle finance despite alert level restrictions on in-person
interactions.
o Heartland Bank awarded Canstar's 2020 Bank of the Year - Savings and
Canstar's 5-Star Rating for Outstanding Value Savings Account for its Direct
Call and YouChoose accounts.
o Heartland Bank Reverse Mortgages awarded Consumer Trusted accreditation for
the fourth year in a row.
o Heartland Bank a finalist in the Diversity Works NZ Diversity Awards in the
Cultural Celebration category.
o Heartland Bank became an accredited Living Wage employer, and part of the
first Living Wage accredited industry in New Zealand.

See the attachments to this release, including the FY20 Results Release for
further information.

- Ends -

For further information, please contact the person(s) who authorised this
announcement:

Jeff Greenslade
Chief Executive Officer
M 027 382 0023

Andrew Dixson
Chief Financial Officer
M 027 263 2666

Address:
Level 3, Heartland House
35 Teed Street
Newmarket, Auckland
New Zealand

For media enquiries, please contact:
Nicola Foley
Head of Communications
M 027 345 6809
End CA:00359897 For:HGH Type:FLLYR Time:2020-09-17 09:50:41

Click here to view related attachments.