New Zealand-based financial services provider Heartland Group Holdings has released its half-year results for the 2020 financial year (HY20), reporting a 42 per cent increase ($4.9 million) in the net operating income of its Australian business to $16.6 million.
The earnings spike was driven by a sharp rise in the uptake of its reverse mortgage products, with its reverse mortgage portfolio rising by $79 million to $887 million, representing annualised growth of 20 per cent in HY20.
According to Heartland, the improvement was driven by efforts to expand its brand presence in the Australian market.
As a result, Heartland’s share of the reverse mortgage market in Australia increased to 26 per cent.
Heartland expects the trend to continue over the coming half.
“With a focus on product simplicity and increased importance placed on customer experience and continued improvement and ease of use for the website and application, Heartland expects to see continued growth in its Australian reverse mortgage business,” the group noted.
Overall, the group posted a net profit after tax (NPAT) of $39.9 million, up 20.4 per cent ($6.7 million).
The group’s gross finance receivables totalled $4.6 billion, up $177 million, representing annualised growth of 8 per cent in the half.
Heartland’s return on equity (ROE) also improved, rising by 165 bps to of 11.7 per cent.
This was offset by an increase in its underlying cost-to-income ratio (CTI), which increased by 4.3 per cent to 43.3 per cent, which it said reflected “significant investments”.
New CFO appointed
Heartland has also announced the appointment of Andrew Dixson as chief financial officer (CFO) of Heartland Group Holdings Ltd (previously head of corporate finance) and Michael Drumm as general counsel and head of group risk (previously general counsel).
In their newly created roles, the appointees will work alongside the existing CFO Cherise Barrie and chief risk officer Grant Kemble.
According to Heartland, the roles have been created to reflect the group’s “growth and increased complexity”, as well as “anticipated growth and complexity” over the coming period.
The group added that the appointments also reflect the need for management to focus on the activities of Heartland Bank Ltd separately from the activities of the other members of the Heartland Group.
Chief of staff Laura Byrnes has also been appointed as senior manager for the purpose of listing rules.
[Related: NAB earnings withstand lending slump]