Heartland Group Holdings Ltd. · NZX:HGH
Heartland — FY2025 Earnings Presentation
51 slides from Heartland's earnings presentation, August 2025
Slide 1: FY2025 Full Year Results
Investor Presentation FY2025 Full Year ResultsFor the 12 months ended 30 June 2025
Slide 2: Contents
Contents 01 Executive summary 3-11 02 New Zealand banking 12-25 03 Australian banking 26-35 04 Outlook 36-40 05 Additional information 41-46 06 Disclosure, appendices & glossary 47-50 2 2
Slide 3: Executive summary
01 Executive summary Andrew Dixson Chief Executive Officer, Heartland Group
Slide 4: Presentation of results
Presentation of results Financial results in this investor presentation are presented on a reported and underlying basis. • Reported results are prepared in accordance with NZ GAAP and include the impacts of one-offs, both positive and negative, which can make it difficult to compare performance bet
Slide 5: FY2025 summary
FY2025 summary A year of significant reset, change and integration. Heartland prioritised capital efficiency during FY2025, restoring a superior margin and actively derisking its lending portfolios to strengthen its foundations for the future. Overview • NPAT of $38.8m. Underlying NPAT of $46.9m, me
Slide 6: Group financial results
Group financial results 8m NZ, Reported Underlying Reported v Underlying FY25 FY24 Movement FY25 FY24 Movement FY25 FY24 NII $307.3m $277.6m $29.7m 10.7% $307.3m $277.8m $29.6m 10.6% - ($0.2m) OOI1 $15.6m $12.7m $2.9m 22.6% $15.5m $20.2m ($4.7m) (23.2%) $0.1m ($7.5m) NOI $322.9m $290.4m $3
Slide 7: FY2025 reported vs. underlying
FY2025 reported vs. underlying Entity FY2025 HBL HBAL HGH2 Reported NPAT $38.8m $21.9m $29.8m ($12.8m) ‒ De-designation of derivatives $1.1m $1.1m - - ‒ Fair value changes on equity investments held ($1.6m) ($1.6m) - - ‒ Other non-recurring income $0.5m $0.5m - - Other operating income (OOI) ($0.1m)
Slide 8: Underlying OPEX
Underlying OPEX $56.4m (45.2%) FY2025 v FY2024 $18.6m (11.4%) • OPEX was up primarily as a result of the ownership, governance and <189.1 integration of the AU bank: 3.3 7.6 181.3 • the AU bank was required to maintain its own core functions 7.7 6.3 162.7 • the NZ bank required increased investment
Slide 9: Non-strategic asset (NSA) realisation progress
Non-strategic asset (NSA) realisation progress Accelerated NSA realisation is enabling capital to be redeployed to high-return core lending portfolios. • Online Home Loans is in run down after Heartland Bank closed applications to new customers on 18 March 2025. • 4Q2025 saw the largest reduction in
Slide 10: Capital
Capital Heartland remains well capitalised, and both banks maintain strong regulatory capital positions. • There are currently no ordinary share capital issuances planned to meet future requirements. • The increase in share capital is due to the reinvested dividend per Heartland’s DRP. • Capital opt
Slide 11: Shareholder return
Shareholder return 4.2% Underlying ROE3 Underlying ROE 11.9% 2H2025 6.0% vs 1H2025 1.9% 9.8% 10.9% 9.8% 4.2% 2.0 cps 12.1% 10.2% 6.0% Final dividend 1.9% down 1.0 cps vs FY2024 FY23 FY24 FY25 1H 2H 6.9%1 Underlying EPS (cps)4 Dividend yield 16.0 13.5 7.8 6.1 5.0 • Heartland has declared a FY2025 fin
Slide 12: New Zealand banking
02 New Zealand banking Leanne Lazarus Chief Executive Officer, Heartland Bank Kerry Conway Chief Financial Officer, Heartland Bank
Slide 13: NZ banking: FY2025 summary
NZ banking: FY2025 summary Heartland Bank’s vision is to be New Zealand’s leading specialist bank, with a superior customer and originator experience, low CTI ratio and a strong ROE. Efficiency Quality Growth Disciplined cost management and efficient use of Actively manage lending for margin and ris
Slide 14: Financial results
Financial results Reported Underlying FY25 FY24 Movement FY25 FY24 Movement NII $212.4m $210.6m $1.8m 0.9% $212.4m $210.6m $1.8m 0.9% OOI1 $21.3m $19.0m $2.4m 12.5% $21.3m $27.2m ($5.9m) (21.6%) NOI $233.7m $229.6m $4.2m 1.8% $233.7m $237.7m ($4.1m) (1.7%) OPEX $131.8m $104.5m $27.3m 2
Slide 15: Receivables
Receivables Momentum continued in Reverse Mortgages, with Rural growth driven by Livestock Finance. Subdued economic conditions continued to impact Motor Finance and Asset Finance, with an increased focus on quality lending. $368m (-7.3%) Core business NSAs $141m (-3.2%) $179m (-35.1%) 29 (77) 165 (
Slide 16: Underlying NIM
Underlying NIM FY2024 NIM Avg. 3.79% FY2025 NIM Avg. 3.87% Exit NIM up 29bps YoY >4.25% despite headwinds 4.18% Despite pricing competition from declining interest 4.13% >4.20% rates and subdued credit demand, FY2025 exit NIM 3.89% 3.92% 3.83% 3.84% 3.82% expanded to 4.13%, exceeding the 4.00% 2H202
Slide 17: Underlying OPEX
Underlying OPEX Other operating expenses, $12.3m, 10% Advertising & public relations, $1.6m, 1% FY2025 Vehicle lease & GST unrecoverable, $3.4m, 3% Total FY2025 underlying OPEX of $128.1m, largely Debt Collection & other fees, $3.8m, 3% made up of: • $64.1m personnel expenses, based on 482 FTEs Cust
Slide 18: Asset quality
Asset quality NPL ratios Portfolio composition Receivables composition 3.82% 3.65% 3.40% 3.31% 3.21% Reverse Mortgages, 2.84% 2.70% 26.1% 2.34% 2.46% 2.40% Rural, 12.8% June 24 Sept 24 Dec 24 March 25 June 25 Motor Finance, 35.2% Total Bank NPL Core Portfolio NPL Business NPL, 3.2% Finance, 15.3% He
Slide 19: Impairment expense
Impairment expense Underlying Impairment expense ratio Total provisions and coverage FY2024 FY2025 1.40% 2.10% 0.60% 1.86% 1.94% 1.71% 3.32% 74.6 76.7 68.4 67.4 1.24% 21.5 21.3 28.5 20.7 0.77% 0.92% <0.85% 0.70% 0.60% 0.47% 46.9 53.3 48.2 46.7 0.41% 0.22% Dec-23 Jun-24 Dec-24 Jun-25 FY2024 1Q2024 2Q
Slide 20: Funding & liquidity
Funding & liquidity • Deposit retention remained high, positioning the bank well 30-Jun-25 for the commencement of the Depositor Compensation 1 1 Scheme on 1 July 2025. Introduction of the scheme is not 1-Week MMR 1-Month MMR Core funding expected to have a financial impact on Heartland Bank. New Ze
Slide 21: Capital
Capital New Zealand Banking Group1 – Total Capital movement $m Heartland Bank’s capital remains well 20 23 (34) 1 15 16 (50) 40 40 above regulatory minimums and is well 68 55 positioned for future growth. • Throughout FY2025, a focus on capital optimisation led to the release of $9.8m in capital thr
Slide 22: NZ lending performance: Reverse Mortgages
NZ lending performance: Reverse Mortgages Outlook $1,233m Receivables as at 30 Jun 2025 +$165m, 15.5% since Jun 2024 • FY2026 growth: >18% Asset quality1 • NPL2 ratio: 0.17% ($2.0m) • Average current loan size: $154k $58.3m NOI as at 30 Jun 2025 +18.5% vs FY2024 • Weighted average current LVR: 25.3%
Slide 23: NZ lending performance: Rural
NZ lending performance: Rural1 Outlook $609m Receivables as at 30 Jun 2025 +$29m, +4.9% since Jun 2024 • FY2026 growth: >6% Asset quality Includes $374m Rural Lending2 and $235m Livestock Finance • Early-day arrears (5 – 89DPD): Reduced from $10m (1.7%) to $5m (0.8%) Rural NPLs and provisions for NP
Slide 24: NZ lending performance: Motor Finance
NZ lending performance: Motor Finance1 Outlook $1,694m Receivables as at 30 Jun 2025 -$77m, -4.3% since Jun 2024 • FY2026 growth: >3.0% Asset quality Includes $1,565m Motor Lending2 and $130m Wholesale Lending • Early-day arrears (5 – 89DPD): Reduced from $85m (4.8%) to $76m (4.5%) Motor Finance NPL
Slide 25: NZ lending performance: Business Finance
NZ lending performance: Business Finance1 Outlook $779m Receivables as at 30 Jun 2025 -$258m2, -24.9%2 since Jun 2024 • FY2026 growth: <-9% Asset quality Includes $166m Business Lending and $613m Asset Finance • Early-day arrears (5 - 89DPD): Reduced from $50m (4.8%) to $43m (5.5%) $46.3m Business F
Slide 26: Australian banking
03 Australian banking Michelle Winzer Chief Executive Officer, Heartland Bank Australia Kerry Conway Chief Financial Officer, Heartland Bank
Slide 27: AU banking: FY2025 summary
AU banking: FY2025 summary Heartland Bank Australia’s vision is to be Australia’s leading specialist bank, enriching customers’ lives through financial freedom. Business growth Service excellence Diversify distribution Continue to focus on expansion within existing Through a commitment to strategy e
Slide 28: Financial results
Financial results Reported Underlying FY25 FY24 Movement FY25 FY24 Movement NII $86.5m $61.8m $24.7m 40.0% $86.5m $61.9m $24.6m 39.7% OOI1 $2.7m $2.1m $0.5m 24.3% $2.7m $2.7m ($0.0m) (1.7%) NOI $89.1m $63.9m $25.2m 39.5% $89.1m $64.6m $24.5m 38.0% OPEX $47.7m $38.2m $9.4m 24.6% $46.4m
Slide 29: Receivables
Receivables Strong growth continued in Reverse Mortgages as Heartland Bank Australia maintained its market leading position. Livestock Finance saw a return to growth as confidence returns to the market, despite some impacts from drought in Victoria and South Australia. A$290m (14.7%) 4 (23) 2,265 30
Slide 30: Underlying NIM
Underlying NIM 3.59% >3.65% Exit NIM up 75bps YoY 3.27% 3.13% 3.47% • Cost of deposits: lower cost of funds through >3.40% 3.31% funding mix transition which completed successfully, moving from 100% reliance on 2.67% 3.01% wholesale funding to deposits making up 81% of funding as at 30 June 2025. 2.
Slide 31: Underlying OPEX
Underlying OPEX Other operating expenses, $4.6m, 10% Travel, entertainment and insurance, $1.1m, 2% FY2025 Advertising and public relations, $1.4m, 3% Total FY2025 underlying OPEX of A$46.4m, largely made up of: Occupancy costs and depreciation - PPE & RoU, $2.7m, 6% • A$20.5m personnel expenses, ba
Slide 32: Funding & liquidity
Funding & liquidity • In FY2025, Heartland Bank Australia used deposit funding to complete the repayment 31-Dec-24 30-Jun-25 of a A$800m wholesale debt funding facility. • The transition to a predominantly deposits funding mix, from a reliance on wholesale MLH MLH funding, has been successful. Depos
Slide 33: Capital
Capital Heartland Bank Australia - Capital movement A$m Heartland Bank Australia continues to operate above 27 (1) regulatory capital minimums and is 50 3 well positioned for future 50 Tier Two sustainable growth. 275 CET1 246 • Heartland Bank Australia maintained a strong regulatory capital positio
Slide 34: AU lending performance: Reverse Mortgages
AU lending performance: Reverse Mortgages Outlook A$1,980m Receivables as at 30 Jun 2025 +A$309m, 18.5% since Jun 2024 • FY2026 growth:>19.0% Asset quality2 • NPL 3 ratio: 0.88% (A$17.4m) • Average current loan size : A$208k A$63.8m NOI as at 30 Jun 2025 • Weighted average current LVR : 24.6%4 • Ach
Slide 35: AU lending performance: Livestock Finance
AU lending performance: Livestock Finance FY2025 Receivables (A$m) A$254m Receivables as at 30 Jun 2025 +A$3.7m, 1.5% since Jun 2024 285.0 280.8 281.9 Single significant customer 259.4 refinance in 254.7 250.1 251.9 250.1 248.6 253.8 June 2025 241.7 241.8 A$12.6m 21.9% growth 231.3 (Oct 2024-May 202
Slide 36: Outlook
04 Outlook Andrew Dixson Chief Executive Officer, Heartland Group
Slide 37: FY2026 outlook
FY2026 outlook Capitalising on the reset, change and integration that occurred in FY2025, Heartland expects to deliver improved ROE and profitability in FY2026. Its focus will be on: Maintaining a refined strategic focus on its core product sets. 1 - NZ bank: Reverse Mortgages, Rural Lending, Motor
Slide 38: FY2026 outlook: Reverse Mortgage opportunity
FY2026 outlook: Reverse Mortgage opportunity Each bank will prioritise growth and innovation in Reverse Mortgages to retain its leading position and increase competitive advantage in markets with significantly untapped potential. Reverse Mortgages Australia New Zealand Commentary Market sizing1 A$ N
Slide 39: FY2026 guidance
FY2026 guidance Heartland expects FY2026 underlying NPAT to be at least $85 million. The FY2026 guidance detailed below is subject to change once the impact of the technology investment required to deliver against Heartland’s technology strategy is known. Heartland expects the difference between rep
Slide 40: Long-term ambitions
Long-term ambitions Heartland intends to present updated long-term ambitions, resetting to a full five-year time horizon to demonstrate its operating metrics at scale. Intentional and necessary resets in Heartland’s businesses throughout FY2025 have rebased the starting position assumed when Heartla
Slide 41: Additional information
05 Additional information
Slide 42: Non-strategic assets (NSA) overview
Non-strategic assets (NSA) overview NSAs are primarily NZ assets that are outside of Heartland’s core lending strategy, or do not deliver threshold ROE. Balance Movement Balance Asset type Description Exit strategies Dec-24 ($m) ($m) Jun-25 ($m) • Diversified portfolio of agricultural lending primar
Slide 43: Motor Finance arrears vs. auto industry average
Motor Finance arrears vs. auto industry average 6.5% 6.3% 6.3% 6.1% 6.1% 5.9% 5.9% 5.8% 5.7% 5.8% 5.5% 5.4% 5.4% 5.3% 5.2% 5.1% 4.9% 5.0% 4.7% 4.5% 31/12/2024 31/03/2025 30/06/2025 Market Arrears (Centrix Market Report) Total Motor (HBL) Consumer Motor (HBL) 43 Note: • For the purpose of this compar
Slide 44: NZ Reverse Mortgage portfolio analytics
NZ Reverse Mortgage portfolio analytics $1.23b $211m (+$13.6m vs FY2024) 73 17.1% NZ Reverse Mortgages Average age of youngest borrower Compound annual +$165m (15.5%) vs June 2024 FY2025 origination2 (new customers)3 growth rate4 $153,518 $77,583 8.1% 25.3% Average current Average initial Weighted a
Slide 45: AU Reverse Mortgage portfolio analytics
AU Reverse Mortgage portfolio analytics A$1.98b A$404m (+A$73m vs FY2024) 73 17.9% AU Reverse Mortgages Average age of youngest borrower Compound annual +A$309m (+18.5%) vs June 2024 FY2025 origination2 (new customers)3 growth rate4 A$208,221 A$161,907 14.3% 24.6% Average current Average initial Wei
Slide 46: Sustainability
Sustainability Heartland’s sustainability strategy is built on three pillars: FY2025 achievements Environment • Heartland hit its target to increase the percentage of new 1 generation vehicles funded by the NZ Motor Finance portfolio year Support the just transition to a net-zero economy on year. 16
Slide 47: Disclosures, appendices & glossary
06 Disclosures appendices & glossary
Slide 48: Disclaimer
Disclaimer This presentation has been prepared by Heartland Group Holdings Limited (NZX/ASX: HGH) (the Company or Heartland) for the purpose of briefings in relation to its Financial Statements. The presentation and the briefing (together the Presentation) contain summary information Non-GAAP measur
Slide 49: FY2024 reported vs. underlying
FY2024 reported vs. underlying Entity FY2024 HGH HBL HBAL Reported NPAT $74.5m $0.3m $55.8m $18.5m ‒ De-designation of derivatives $6.6m $6.6m ‒ Fair value changes on equity investments held $0.3m ($1.3m) $1.6m Other operating income (OOI) $6.9m ($1.3m) $8.2m ‒ Australian Bank Programme transaction
Slide 50: Glossary
Glossary ADI Authorised deposit-taking institution NSA Non-strategic assets The New Zealand Banking Group consists of the NZ Bank and its NZ subsidiaries, APRA Australian Prudential Regulation Authority NZ Banking Group, NZBG excluding Marac Insurance. The Banking Group includes all of the NZ bank’s
Slide 51: Thank you
Thank you Investor & media relations Nicola Foley Head of Corporate Communications & Investor Relations +64 27 345 6809 nicola.foley@heartland.co.nz Investor information For more information heartlandgroup.info/investor-information
Heartland Group Holdings — FY2025 Earnings Presentation on 6ix