Heartland Group Holdings Ltd. · NZX:HGH
Heartland — Corporate Update (February 2025)
12 slides from Heartland's corporate update, Feb 18, 2025
Slide 1: Market update
Market update 18 February 2025 INVESTOR PRESENTATION
Slide 2: Increase in Heartland Bank Impairment Expense
INCREASE IN HEARTLAND BANK IMPAIRMENT EXPENSE Impairment Expense % Increase in response to the impact of ongoing deterioration 1.99% in NZ economic conditions and to derisk and reposition some of the NZ bank’s lending portfolios. 0.96% 0.92% • Impairment expense of $49.6m required for 1H2025: 0.49%
Slide 3: Impact of Recessionary Operating Environment
IMPACT OF RECESSIONARY OPERATING ENVIRONMENT Quarterly GDP Growth (%) 3.5 1.5 -0.5 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 -2.5 -4.5 Quarterly GDP Growth (%) Restatement by Stats NZ Unemployment Rate (%) 6.00% 5.00% 4.90% 5.10%
Slide 4: Impact of Recessionary Operating Environment
IMPACT OF RECESSIONARY OPERATING ENVIRONMENT NZ economic conditions significantly deteriorated during 1H2025 • Largest six-month fall in GDP since mid-1991, excluding the COVID-19 period. • Unemployment rose to four-year high of 5.1%. • Financial hardships up 19% year-on-year. • Company liquidations
Slide 5: Motor Finance
MOTOR FINANCE Motor Finance arrears ratios Motor Finance 90DPD composition ($m & %) $80 7.00% $70 5.84% 6.03% 6.00% $60 4.87% 1.3%, $22 5.00% 1.2%, $20 4.75% $50 3.84% 4.20% 4.00% 3.59% 1.0%, $16 Millions $40 3.99% 0.9%, $14 1.2%, $20 1.2%, $20 1.3%, $20 3.00% 3.12% $30 0.7%, $11 2.95% 2.90% 1.0%, $
Slide 6: Open for Business
OPEN FOR BUSINESS O4B arrears ratios O4B 90DPD composition ($ and %) $14 25.00% 21.97% $12 20.00% 18.53% $10 7.1%, $6 16.89% 7.6%, $5 15.00% 15.14% $8 12.96% Millions 14.87% 4.4%, $4 $6 1.7%, $2 11.49% 10.00% 0.8%, $1 3.7%, $3 5.8%, $4 6.3%, $4 7.25% $4 5.28% 8.63% 1.7%, $2 2.9%, $3 2.5%, $2 5.00% 6
Slide 7: Asset Finance & Business Relationship
ASSET FINANCE & BUSINESS RELATIONSHIP Asset Finance arrears ratios Business Relationship arrears ratios 8.00% 7.40% 16.00% 6.98% 13.68% 7.00% 14.00% 6.16% 6.77% 13.00% 6.00% 5.62% 12.00% 11.28% 5.73% 5.00% 10.00% 4.90% 8.17% 4.00% 2.15% 3.57% 4.43% 8.00% 7.35% 7.29% 6.51% 5.74% 3.00% 3.33% 6.00% 5.5
Slide 8: Heartland Bank (New Zealand)
HEARTLAND BANK (NEW ZEALAND) Heartland Bank – Total provisions and coverage 1.86% 2.10% Heartland Bank portfolio composition 1.71% Livestock, Livestock NPLs, 1.34% 1.30% $76.7 3.4% 0.1% $74.6 $68.4 $52.4 $52.1 Reverse Mortgages & Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 Business, Residential 31.4% Collect
Slide 9: Provisions
PROVISIONS Motor Finance Open 4 Business 7.02% 4.44% $5.9 $6.1 7.53% 1.95% 4.71% 3.88% 1.67% $4.9 $31.7 1.41% $4.5 $4.7 $27.1 1.06% $22.5 0.80% $16.7 $11.6 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 Collective Provision Specific Provision Coverage Ratio Collective Provisio
Slide 10: Collections Enhancements
COLLECTIONS ENHANCEMENTS Heartland Bank has enhanced its collections, recoveries and write-off strategies Motor Finance and O4B loans • Adopted a more prescriptive repossession policy, to implement recovery action sooner in the collections cycle. • Implemented a prescriptive 180-day write-off policy
Slide 11: Looking Forward
LOOKING FORWARD 2H2025 expected to remain challenging for borrowers • While there may be some positive economic tailwinds emerging in NZ in 2H2025 from further interest rate reductions and a consequential increase in credit demand, it is expected economic conditions for NZ consumers and businesses w
Slide 12: Thank You
THANK YOU Investor & media relations Investor information Nicola Foley For more information Head of Corporate Communications & Investor Relations heartlandgroup.info/investor-information +64 27 345 6809 nicola.foley@heartland.co.nz
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