Heartland posts higher profit
Fledgling bank Heartland New Zealand has posted a $36 million profit, 421 per cent up from $7m the year before, and says it is looking for more acquisitions.
However, the bank said the $36m was up 48 per cent, or $11.6m, on last year's result when one-off expenses of $24.4m the year before were stripped out.
Those costs were related to a change in strategy regarding its non-core legacy property portfolio.
The bank declared a final, fully imputed dividend of 3.5 cents a share, taking the total dividend for the year to 6c a share.
The final dividend will be paid on October 3.
Heartland adjusted its profit forecast for the next year, the year to June 2015, saying the net profit after tax range was $42m to $45m, an increase of $1m from $44m at the top end.
The focus in the June 2015 year would be to keep up the earnings growth momentum and focus on bettering return on equity, which reached 9 per cent in 2014, and 9.7 per cent in the last quarter, compared with 6.4 per cent the previous year (the $24.4m in one-off expenses excluded).
"In addition, Heartland will continue to investigate potential acquisition opportunities that are ROE (return on equity) accretive as well as assessing possible capital management options to improve ROE."
During the year Standard & Poor's lifted Heartland's credit rating to BBB from BBB minus and the company completed the purchase of reverse mortgages business Seniors Money International for $87m.
Heartland said it expected its business and rural lending to grow modestly in the year ahead, while it is continuing its strategy of withdrawing from residential mortgages and replacing that with higher-yielding lending. More than $50m residential mortgages were placed with Kiwibank in the 2014 year.