Heartland On Track for FY2027 NPAT of at Least NZ$102m

Heartland (ASX:HGH) issued a first-quarter trading update to show it remains on track for FY2027 guidance of NPAT of at least NZ$102 million and ROE of at least 7.5%, both excluding costs of its proposed TSB Bank transaction.

For 1Q2027, NPAT excluding Proposed Transaction costs was NZ$25.5m and reported NPAT was NZ$24.5m, after NZ$0.9 million of transaction costs, in line with expected FY2027 transaction costs of NZ$9.5 million. Average net interest margin was 3.92%, against guidance of greater than 3.88%, and the cost-to-income ratio was 54.7%, against guidance of less than 55.7%. ROE excluding those costs was 7.6%. In New Zealand, Reverse Mortgage receivables rose NZ$46.9 million to NZ$1,487.6 million, while Rural receivables fell NZ$50.6 million to NZ$624.3 million after a single large borrower changed its funding strategy, and Motor Finance receivables fell NZ$36.0 million. Heartland Bank's total NPL ratio improved to 1.87% from 1.92% at 30 June 2026. In Australia, Heartland Bank Australia's NPAT was AU$11.3m and its Reverse Mortgage receivables rose AU$117.0 million to AU$2,488.1 million.

The impairment expense ratio of 0.34% was above FY2027 guidance of less than 0.32%. Completion of the TSB transaction is targeted no earlier than December 2026, subject to all remaining conditions, and guidance will be updated on completion.