Heartland has reported a significant increase in impairment expense for its New Zealand bank, Heartland Bank.
The company announced an impairment expense of $49.6 million for the six-month period ended December 31, 2024, compared to $23.9m in the same period last year.
The higher impairment expense was attributed to the ongoing deterioration of economic conditions in New Zealand and the need to derisk and reposition some of Heartland Bank's lending portfolios.
The impairment expense was primarily related to arrears in the motor finance and business lending portfolios.
Heartland expects its net profit after tax for the first half of the 2025 financial year to be in the range of $2m to $5m.
Heartland Bank remains well capitalised, with a total capital ratio of 14.8% as of December 31, 2024.
The company's Australian bank, Heartland Bank Australia, was unaffected and continues to perform well.
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