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Heartland lifts profit, delays payout

NZN 17/05/2016 Jonathan Underhill

Heartland Bank has posted a 10 per cent gain in nine-month profit and will delay a planned return to shareholders.

Heartland affirmed its guidance for profit of $51 million to $55 million for the year ending June 30, up from $36m in 2015.

In December, Heartland told shareholders the bank was keen on expanding its consumer finance business with a particular focus on distribution channels or new technologies, but in the absence of any compelling options, would return capital to shareholders.

The Auckland-based lender's investors voted to simplify the company's structure by amalgamating its businesses into one unit, issue up to $75m through a tier 2 capital instrument and return as much as $100m to shareholders.

"Since last year's annual meeting, there has been considerable volatility in financial markets," chief executive Jeff Greenslade said.

"Heartland believes this volatility creates greater opportunity for acquisitions and wishes to assess opportunities (if any) that arise during this period."

It said it was assessing opportunities and would delay the regulatory capital issue and/or return of capital until after June 30.

Heartland has been mooted as a potential buyer for ANZ Bank New Zealand's UDC Finance business.

Its disclosure statement for the nine months ended March 31 shows Heartland's net interest income rose to $108.7m from $99.6m a year earlier.

Profit in the period rose to $39.6m from $36m.

Heartland shares last traded at $1.17 and have declined 9.3 per cent in the past 12 months.

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