Heartland provides market update

NZX/ASX Release

Heartland provides market update

18 March 2020

The New Zealand and Australian Governments have each taken proactive and serious steps to protect
people against the spread of Covid-19. Heartland Group Holdings Limited (NZX/ASX: HGH) (Heartland)
supports those steps to restore market confidence to ensure that industry continues ‘business as
usual’ as far as possible in the circumstances.
Heartland wishes to advise the market that, at this early stage:
1. Heartland is committed to protecting the health, safety and wellbeing of all its people, and has
introduced measures which include keeping workplaces healthy, people informed, and
restricting non-essential travel.

2. Heartland expects that new lending levels in some portfolios, such as business intermediated
and SME, will slow. However, Heartland has already started to re-focus its resource towards
areas, such as NZ and Australian reverse mortgages and motor, where new lending forecasts
remain strong. As a result, Heartland is confident that total lending growth will continue. It is
also pleasing to note that Heartland’s residential mortgage offering has been well received by
the market and that much of the initial limited availability has already been allocated.

3. Heartland is working with a limited number of borrowers in industries such as forestry, where
current events are exacerbating existing financial stress. Heartland will continue to monitor
conditions as they develop, and support affected clients, but remains comfortable with its
current provisioning levels.

4. Heartland is ensuring that its business continuity management planning can adequately
respond to a range of possible scenarios.

5. Heartland remains comfortable with its capital position. Heartland’s subsidiary, Heartland Bank
Limited, holds regulatory capital at levels in excess of regulatory minima and internal buffers –
which are intended to be held for, and used during, periods of economic volatility.

6. Heartland remains comfortable with its liquidity levels, and as recently as the 16
th
of March
successfully issued $20m of registered certificates of deposit to wholesale investors.

7. Heartland also remains comfortable with deposit flows (including re-investment levels).

Heartland continues to forecast a result in line with the original NPAT forecast in the range of $77
million to $80 million, and expects that a result in the middle of that range is likely.

This situation appears is developing very quickly, and Heartland will continue to monitor conditions
and provide further market updates if and when required.

- Ends -

For further information, please contact:

Jeff Greenslade
Chief Executive Officer
M: 021 563 593
E: Jeff.Greenslade@heartland.co.nz

Andrew Dixson
Chief Financial Officer, Heartland Group Holdings Limited
M: 021 263 2666
E: Andrew.Dixson@heartland.co.nz

Address:
Level 3, Heartland House
35 Teed Street
Newmarket, Auckland
New Zealand