Heartland Group Holdings Ltd (ASX:HGH) Announces Q3 Trading Update
Financial Performance
Heartland Group Holdings Limited reported a net profit after tax (NPAT) of $16.6 million for Q3 2025, maintaining its outlook to achieve at least $45 million NPAT for the financial year ending 30 June 2025. The net interest margin (NIM) expanded by 28 basis points to 3.92% in Q3, driven by improved cost of funds.
Asset Quality Improvements
Asset quality in Heartland Bank’s Motor Finance portfolio showed improvements due to enhanced collections and recoveries policies. Early recovery efforts for Motor Finance loans written off in February 2025 exceeded expectations, reducing the non-performing loan (NPL) ratio to 3.31%.
Receivables Growth
Gross finance receivables grew significantly in Reverse Mortgages and Livestock Finance across New Zealand and Australia. Reverse Mortgages receivables increased by 14.7% to $1,192.3 million, while Livestock Finance receivables rose by 57.1% to $189.9 million in Q3 2025.
Cost Management
Operating expenses (OPEX) remained stable at $32.5 million in Q3, aligning with expectations for the second half of FY2025. Heartland has implemented cost management programmes to enhance operational efficiency.
Non-Strategic Assets Realisation
Progress was made against Q3 non-strategic assets (NSAs) realisation targets, with exit strategies being accelerated. Heartland Bank is winding down Online Home Loans and focusing on core lending portfolios.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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