Heartland says its targets aren't much of a stretch; analysts are sceptical
Source: iStock
Analysts are clearly unconvinced that Heartland is going to achieve its goals for the 2028 financial year.
These goals are to achieve net underlying profit of $200 million or more, return on equity (ROE)between 12% and 14%, more than 10% growth in receivables from Dec 31, 2023, net interest margins (NIM) above 4% and a cost-to-income ratio (CTI) below 35%.
It also wants to have an underlying impairment expense ratio below 0.3%.
For comparison, Heartland is forecasting underlying net profit for the year ending June will be between $108 million and $112 million, up from $110.2 million for the year ended June, 2023, NIM was 3.67% in the six months ended December, the CTI was 43.7% and the underlying impairment exense ratio was 0.23%.
However, Forsyth Barr analysts Andrew Harvey-Green and Mark Robertson are forecasting net profit in the year ending June 2028 will fall short at $172 million, ROE will be only 11.3% and CTI will be 39.1%.