Heartland Group (HGH) H1 2026 earnings summary

Executive summary

• Net profit after tax for H1 FY26 surged to NZD 48.8 million from NZD 3.6 million year-over-year, with underlying NPAT at NZD 46.1 million, reflecting a strong turnaround in profitability.

• Underlying return on equity (ROE) rose 540 basis points to 7.3%, with average NIM expanding 51 basis points to 3.92%.

• Strategic reset and technology investments, along with NSA realization, drove improvements across all key metrics.

• Interim dividend declared at NZD 0.035 per share, up NZD 0.015 from H1 FY25, with a payout ratio of 72%.

• Total comprehensive income for the period was $85.5 million, compared to a loss of $4.5 million in the previous year.

Financial highlights

• Net interest income increased by 11.3% to $165.9 million year-over-year; net operating income rose by NZD 15.4 million.

• Cost to income (CTI) ratio reduced by 304 basis points to 54.6%.

• Impairment expense ratio dropped to 0.35%, a reduction of 105 basis points, with impairment expense falling 74.7% to $12.8 million.

• Aggregate receivables grew AUD 157 million (4.3% annualized), with strong growth in reverse mortgages and livestock finance.

• Earnings per share increased to 5.20 cents from 0.40 cents year-over-year.

Outlook and guidance

• FY26 guidance reaffirmed: underlying ROE of at least 7% and underlying NPAT of at least NZD 85 million.

• NZ Banking NPAT expected to exceed $45 million, AU Banking NPAT to exceed AU$37 million (NZ$40 million).

• NIM and asset quality improvements expected to continue, with positive adjustment to impairment expense ratio guidance.

• The group continues to focus on simplifying its portfolio and redeploying capital into higher-return core lending.

• Regulatory capital requirements for the banking group will be reduced effective 1 March 2026.