Heartland Group Holdings Ltd reported a 92.8% rebound in underlying net profit after tax to NZD 90.4 million for the fiscal year ended June 30, 2026, compared with NZD 46.9 million in the prior year.
The group’s reported net profit stood at NZD 93.2 million, exceeding underlying profit by NZD 2.8 million. Net operating income rose 9.8% to NZD 354.3 million, driven by a 36-basis-point widening in the group’s net interest margin to 3.98%. Operating expenses increased 6.7% to NZD 193.5 million, though New Zealand bank costs declined marginally by NZD 0.7 million.
Return on equity improved 236 basis points to 7.3%, while the cost-to-income ratio narrowed 155 basis points to 54.6%. Impairment expenses fell 55 basis points to 0.45%, and the New Zealand non-performing loan ratio decreased to 1.92% from 3.21%.
The board declared a final dividend of NZD 0.035 per share, a 75% increase from NZD 0.020 in the prior year, maintaining a 73% payout ratio against underlying profit. The dividend reinvestment plan will not apply to the final payment, extending Heartland’s 15-year streak of uninterrupted distributions.
Portfolio growth remained robust, with New Zealand reverse mortgage receivables up 16.8% to NZD 1.44 billion and Australian reverse mortgages climbing 19.7% to NZD 2.37 billion. The group’s non-strategic asset realization program concluded with a residual portfolio of NZD 94 million, having reduced total assets by NZD 270 million during the year and releasing NZD 32 million in capital.
Heartland also confirmed a conditional agreement to acquire TSB from the Toi Foundation for NZD 620 million, followed by a merger to form TSB Heartland Bank, targeting completion in December 2026 subject to regulatory and shareholder approvals. The Reserve Bank of New Zealand reduced Heartland’s transitional capital overlay from 200 basis points to 50 basis points following the integration of Heartland Bank Australia.
For fiscal 2027, management guided for underlying net profit of at least NZD 102 million, a return on equity target of at least 7.5%, and reverse mortgage growth exceeding 18% in both New Zealand and Australia. New Zealand net interest margins are expected to stabilize near 4.05%, while Australian margins are projected to contract by 13 basis points to 3.68%. Heartland will report results on a reported basis only starting in FY2027.
The company’s shares rose 1.23% to $1.235, within a 52-week range of $0.805 to $1.30.
