Heartland announces FY2025 result and outlook for FY2026

NZX/ASX release
21 August 2025

Heartland announces FY2025 result and outlook for FY2026; Addresses long-term ambitions, with further detail to be provided at a 2025 Investor Day

Following a year of significant reset, change and integration, Heartland Group Holdings Limited’s (Heartland) (NZX/ASX: HGH) net profit after tax (NPAT) for the financial year ended 30 June 2025 (FY2025) was $38.8 million. On an underlying basis, FY2025 NPAT was $46.9 million, meeting underlying NPAT guidance of at least $45 million. Heartland prioritised capital efficiency during FY2025, restoring a superior margin and actively derisking its lending portfolios to strengthen its foundations for the future.

Overview: FY2025 performance
- After a reset of some of its New Zealand lending portfolios in the first half of FY2025 (1H2025), Heartland substantially met the financial performance expectations set in its interim financial results announcement (Outlooks) for the second half of FY2025 (2H2025).
- Superior margin restored, with net interest margin (NIM) up 17 basis points (bps) to 3.56% and each bank ending FY2025 with a strong exit margin (4.13% in New Zealand and 3.59% in Australia).
- Operating expenses (OPEX) were up $53.2 million (38.1%) primarily due to non-repeating benefits in the financial year ended 30 June 2024 (FY2024), the cost base of the authorised deposit-taking institution (ADI) and subsequent costs related to regulatory requirements following the ADI acquisition, hiring for growth, and software related costs. Cost growth is stabilising.
- Impairment expense was up $25.2 million (54.3%) due to a significant increase for Heartland Bank Limited (Heartland Bank) in 1H2025 in response to the impact of the ongoing deterioration in economic conditions on some lending portfolios and to derisk and reposition some of its lending portfolios (as previously announced on 18 February 2025).
- The introduction of more prescriptive collections and recoveries policies in 2H2025 has had a positive effect on asset quality and recovery outcomes, exceeding Heartland’s initial expectations. Overall asset quality is improving and Motor Finance arrears are now performing better than the industry average.
- An increased focus on capital optimisation through several key initiatives by Heartland Bank and accelerated non-strategic asset (NSA) realisation is enabling capital to be redeployed to high-return core lending portfolios.
- Heartland’s existing Australian businesses have now been integrated into the acquired ADI to form a new and unique Australian bank.
- The Australian funding transition has been successful, with deposits forming 81% of the bank’s funding. Heartland Bank Australia Limited (Heartland Bank Australia) now has a deep, stable and diverse platform to efficiently fund future lending growth.
- Strong growth continued in Reverse Mortgages in both countries (Receivables up 15.5% in New Zealand and 18.5% in Australia), demonstrating growing market demand for this product.
- Good momentum achieved in Livestock Finance in New Zealand (Receivables up 18.4%) and a return to growth in Australia (Receivables up 1.5%, arresting the FY2024 decline of 27.5%).
- Growth has remained challenged in Heartland Bank’s other core lending portfolios of Motor Finance and Asset Finance due to subdued economic conditions and a focus on higher quality lending.
- Final dividend of 2 cents per share (cps), bringing the total FY2025 dividend to 4 cps.

Heartland Bank has refined its lending strategy to create a foundation for quality sustainable growth. As part of its product simplification, Unsecured Lending is winding down, and NSA realisation has accelerated – the total NSA balance reduced by $103.0 million (22.0%) during 2H2025, releasing $7.7 million of capital. Through several key capital optimisation initiatives, including completion of the run-off of Marac Insurance and cancellation of its licence, and reducing its stake in Harmoney Corp Limited to below 10%, Heartland Bank has released $9.8 million of capital with a further $4 million expected in the first half of the financial year ending 30 June 2026 (FY2026). This activity, together with NSA realisation, has strengthened Heartland’s capacity for organic growth and future capital investment.

Overview: FY2026 outlook
Heartland’s priority for FY2026 is to deliver an underlying return on equity (ROE) of at least 7% and an improved underlying NPAT of at least $85 million. In FY2026, Heartland will maintain its refined strategic focus on its core product sets, invest in technology uplift to unlock future growth, continue to focus on operational cost control and prioritise efficient use of capital.


For the full announcement, see the attachments to this release:
Heartland FY2025 - Results Announcement
Heartland FY2025 - Investor Presentation
Heartland FY2025 - Results Announcement Template
Heartland FY2025 - Distribution Notice
Heartland FY2025 - ASX Listing Rules 1.15.3 Statement
Heartland FY2025 - Financial Statements
Heartland Bank FY2025 - Disclosure Statement
Heartland - DRP Offer Document

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The persons who authorised this announcement:
Andrew Dixson, Chief Executive Officer

For further information and media enquiries, please contact:
Nicola Foley, Head of Corporate Communications & Investor Relations
+64 27 345 6809
[email protected]
Level 3, Heartland House, 35 Teed Street, Newmarket, Auckland, New Zealand

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Announcement PDF