Non-major bank reveals focus for FY17

by NZ Adviser22 Feb 2017
Heartland Bank has reported a net profit after tax (NPAT) of $29.1 million for the half year ended 31 December 2016 (the Current Reporting Period), an increase of 14% from the half year ended 31 December 2015.

The bank attributed the increase in profitability primarily to growth in receivables across all divisions – Household, Business and Rural, although net receivables from residential mortgages fell by $8.1m to $37.7m during the Current Reporting Period.

The bank launched a number of digital platforms over the last half year as part of its next strategic step. 

“Heartland’s early strategic focus was product-centric, delivering innovative banking products in niches that were underserviced by the other banks. Heartland has entered the next phase of its strategy, focusing on the channels through which its products are delivered,” the bank stated in a report. 

“Execution of this strategy is twofold, with digital channels being utilised to provide a fast and simple customer experience and, for depositors and reverse mortgage customers, maintaining a high touch telephony service.”

The bank’s key priority for the remainder of FY17 will be to continue developing its  digital origination platforms across a number of its products as well as the continued improvement of back office processes to support the origination power of these platforms. 

The emerging technology for digital platforms will also enable Heartland to reduce the cost of loan origination through the use of highly predictive credit tools. 

To date Heartland has successfully launched digital platforms for small business loans (Open for Business), livestock loans (Open for Livestock) and most recently, residential mortgages (Open for Home Loans). 

The bank recently announced it had taken a 25% shareholding in Fuelled Limited, an online small-to-medium business (SME) lender. This equity investment (being less than $1.0m) has been provided alongside a $2.0m committed debt facility enabling Fuelled to accelerate its Australasian growth plans.

Fuelled is a New Zealand-based business whose simple on-demand service enables SMEs to receive an immediate cash advance on their outstanding invoices. 
 

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