Heartland NZX Virtual Investor Event presentation

Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info

NZX/ASX release
6 September 2023

Heartland NZX Virtual Investor Event presentation

Heartland Group Holdings Limited’s (Heartland) (NZX/ASX: HGH) Chief Executive Officer, Jeff
Greenslade, will give the attached presentation to the NZX Virtual Investor Event today, Wednesday
6 September 2023.

Heartland’s presentation is scheduled to commence at 12.00pm NZST (10.00am AEST).

Shareholders can register to join the virtual event from this link:
https://register.gotowebinar.com/register/3255854472913531224

– ENDS –

The person(s) who authorised this announcement:

Jeff Greenslade
Chief Executive Officer

For further information, please contact:

Nicola Foley
Group Head of Communications
+64 27 345 6809
nicola.foley@heartland.co.nz
Level 3, Heartland House, 35 Teed Street, Newmarket, Auckland, New Zealand

---

Page 1
Heartland Group
Holdings Limited
(NZX: HGH)
6 September 2023
NZX Virtual Investor Event

Information
The presentation (the Presentation) contains only summary information about the Company, its subsidiaries (together,
the Group) and their activities that is current as of the date of this presentation. No person is under any obligation to
update this presentation at any time after its release.
The information in this presentation is of a general nature and does not purport to be complete nor does it contain all the
information which a prospective investor may require in evaluating a possible investment in the Company or that would
be required in a product disclosure statement for the purposes of the Financial Markets Conduct Act 2013 (FMCA). The
Company is subject to disclosure obligations that require it to notify certain material information to NZX Limited (NZX)
and ASX Limited (ASX). This presentation should be read in conjunction with the Company's financial statements for the
full year ended 30 June 2023 and other periodic and continuous disclosure announcements released to NZX and ASX
(which are available at www.nzx.comand www.asx.com.auunder the ticker code "HGH"). No information set out in this
presentation will form the basis of any contract.
The information in the Presentation has been prepared with due care and attention, but its accuracy, correctness and
completeness cannot be guaranteed. To the maximum extent permitted by law, no person (including any member of the
Group and their respective directors, shareholders and employees) will be liable to any other person for any loss arising in
connection with the Presentation.
Not financial product advice
The information in this presentation is of a general nature and does not constitute legal, financial, tax, accounting,
financial product or investment advice or any recommendation to acquire the Company’s securities.
Non-GAAP measures
This presentation contains references to non-GAAP measures including underlying profit or loss, underlying ROE,
underlying CTI ratios and underlying EPS. A reconciliation between reported and the non-GAAP measure of underlying
financial information is included in Heartland’s FY2023 results announcement at www.heartlandgroup.info.
Because Heartland complies with accounting standards, investors know that comparisons can be made with confidence
between reported profits and those of other companies, and there is integrity in Heartland’s reporting approach. These
non-GAAP figures are provided as a supplementary measure for readers to assess Heartland’s performance alongside NZ
GAAP reported measures, where one-offs, both positive and negative, can make it difficult to compare profits between
years. However, these non-GAAP measures do not have standardisedmeanings prescribed by GAAP and should not be
viewed in isolation nor considered a substitute for measures reported in accordance with NZ GAAP.
Non-GAAP financial information has not been subject to review by PricewaterhouseCoopers, Heartland’s external
auditor.
All amounts are in New Zealand dollars unless otherwise indicated. Financial data in this presentation is as at 30 June
2023 unless otherwise indicated. Any other financial information provided as at a date after 30 June 2023 has not been
audited or reviewed.
Forward-looking statements
This presentation contains certain forward-looking statements with respect to the financial condition, results of
operations and business of the Group. Forward-looking statements can generally be identified by the use of words such
as 'project', 'foresee', 'plan', 'expect', 'aim', 'intend', 'anticipate', 'believe', 'estimate', 'may', 'should', 'will' or similar
expressions. Forward-looking statements in this presentation include statements regarding Heartland’s strategies and
future plans and Heartland’s future financial performance. Any indications of future earnings or financial position or
performance and future distributions are also forward-looking statements.
Those plans and projections reflect current expectations, but are inherently subject to risk and uncertainty, and may
change at any time. All such forward-looking statements involve known and unknown risks, significant uncertainties,
assumptions, contingencies, and other factors, many of which are outside the control of the Group, which may cause the
actual results or performance of the Group to be materially different from any future results or performance expressed or
implied by such forward-looking statements. Such forward-looking statements speak only as of the date of this
presentation. Except as required by law or regulation (including the NZX Listing Rules and the ASX Listing Rules), the
Group undertakes no obligation to update these forward-looking statements for events or circumstances that occur
subsequent to the date of this presentation or to update or keep current any of the information contained herein. Any
estimates or projections as to events that may occur in the future (including projections of revenue, expense, net
income and performance) are based upon the best judgement of the Company from the information available as of the
date of this presentation. A number of factors could cause actual results or performance to vary materially from the
projections. There is no assurance that those plans will be implemented or that projections will be realised.
You are strongly cautioned not to place undue reliance on any forward-looking statements, particularly in light of the
current economic climate.
Past performance
Past performance information provided in this presentation is given for illustrative purposes only and should not be relied
upon as (and is not) a promise, representation, warranty or guarantee as to the past, present or future performance of
the Group. The Company does not guarantee the performance of the Group or any return on any securities of the
Company.
General
For the purposes of this Disclaimer "presentation" means the slides, any oral presentation of the slides by the Company,
any question-and-answer session that follows that oral presentation, hard copies of this presentation and any materials
distributed at, or in connection with, that presentation.
The information and opinions contained in this presentation are provided as at the date of this presentation and are
subject to change without notice.
Disclaimer
This presentation has been prepared by Heartland Group Holdings Limited (NZX/ASX: HGH)
(the Companyor Heartland) for the purpose of a management presentation.
2

Contents
01About Heartland4
02Investment proposition12
03Outlook17
04Appendix20
3

Page 4
About Heartland
Page 4

Page 5
•Heartland is an Australasian financial services
group, listed on the NZX Main Board and the ASX
under a Foreign Exempt Listing (NZX/ASX: HGH).
•Market cap in excess of NZ$1bn.
•“Best or only” product strategy with a
commitment to digitalisationand a reduction in
cost to income (CTI) ratio.
•Significant opportunity for growth in New Zealand
and Australia.
A specialist financial services
group with “best or only”
products.
Page 5

More than 145 years of doing things differently
Heartland’s origins date back to 1875 where it started as a small building society in New Zealand. In 2011, following the wake of the Global Financial
Crisis, that building society merged with several other Kiwi financial institutions to become Heartland. Growth through acquisition has remained a
core part of Heartland’s strategy.
Ashburton Permanent
Building & Investment Society
established, later merged with
SMC Building Society and Loan
& Building Society to become
CBS Canterbury.
FY2013FY2016FY2022
MARAC Finance
established to support
the growth of small to
medium sized
businesses.
Southern Cross, CBS Canterbury and MARAC
merged to create Heartland Building Society, later
acquiring PGG Wrightson Finance. Heartland listed
on the NZX.
Australian Seniors
Financeacquired.
Corporate restructure
completed. Heartland Bank
became a wholly-owned
subsidiary of new parent
company, Heartland Group
Holdings Limited, which
listed on the NZX and ASX.
Announced intention to
acquire Challenger Bank
Limited (Challenger Bank).
Southern Cross opened in
Auckland offering North Island
customers investments, savings,
loans and day to day accounts.
Australian Seniors
Finance
is established to support
Australians in retirement.
Heartland Building Society converted
from a building society to a company
and became Heartland Bank.
Heartland granted its bank registration
by the Reserve Bank of New Zealand.
Heartland Bank amalgamated
with its parent company,
Heartland New Zealand.
StockCo Australia acquired.
Total assets A$435m
Total assets A$1.3bnTotal assets A$375m
Total assets A$555m
ReportedNPAT(NZ$m)
6.936.054.273.695.195.9
Totalassets
1
(NZ$bn)
2.53.03.54.97.17.7
Total assets A$714m
Total assets ~A$330m
Total assets ~A$301m
2
Note:Years prior to 2013 represent calendar years and years from 2013 onwards represent financial years.
1
As at the end of the reporting period.
2
Estimated total asset position upon completion.
187519572011FY2014FY2019FY2023
1923
2004
6

New Zealand
•New Zealand’s leading provider of reverse mortgages.
Australia
•Leading active provider of reverse mortgages, holding
~38% market share in March 2023.
2
•Leading provider of specialist livestock finance for
Australian food producers.
Best or only finance
Business as Usual Growth
Continuing to maximisecurrent positioning while expanding
product variations.
Frictionless Service at the Lowest Cost
Investing in technology and improving customer experience while
lowering costs through removing ‘friction’ (processes and tasks
that can be automated or accessed through self-service
platforms).
Expansion in Australia
Growing Reverse Mortgages while broadening our offering both to
the senior demographic and in areas where we have expertise, and
where it meets our “best or only” model, e.g. livestock and,
following completion of the Challenger Bank acquisition (subject to
APRA and RBNZ approval), small business and consumer lending.
Rather than do what's been done, Heartland focuses on providing products that are the best or only of their kind,
through scalable digital platforms. This is underpinned by the following three strategic pillars.
Recognisedand market leading products
1
1
Select awards presented only.
2
Based on APRA authoriseddeposit-taking institution (ADI) Property Exposure and Heartland Finance data. Market size based on Australian reverse mortgages issued by ADIs only.
7

1
Financial results are presented on a reported and underlying basis. Reported results are prepared in accordance with NZ GAAP andinclude the impacts of positive and negative one-offs, which can make it difficult to compare performance. Underlying results (which
are non-GAAP financial information) exclude any impacts of one-offs. This is intended to allow for easier comparability between periods, and is used internally by management for this purpose. A detailed reconciliation between reported and underlying financial
information, including details about FY2023 and FY2022 one-offs, is set out in Heartland’s FY2023 full year results investor presentation available at heartlandgroup.info. General information about the use of non-GAAP financial measures is also available in that
presentation.
2
Receivables also includes ReverseMortgages.
3
Excluding the impact of changes in FX rates.
Group financial highlights
NPATNIMCTI ratio
Impairment
expense ratio
ROEEPS
Reported
$95.9m3.97%44.9%0.36%10.4%14.0 cps


0.8% vs FY2022
8 bps vs FY2022126 bps vs FY202211 bps vs FY2022169 bps vs FY20222.1 cps vs FY2022
Underlying
1
$110.2m4.00%42.0%0.36%11.9%16.0 cps


14.6% vs FY2022
2 bps vs
1H2023
16 bps vs
FY2022
53 bps vs FY20227 bps vs FY202268 bps vs FY20220.3 cps vs FY2022
Receivables
2
BorrowingsEquityFinal dividend
$6,791m$6,627m$1,031m6.0 cps

10.1%
3
vs June 20227.4% vs June 202227.5%vs June 20220.5 cps vs FY2022
8

$4,901m
NZ Receivables
$354m (7.8%)
vs FY2022
NZ divisional summary
Household
$2,827m,
57.7%
Rural
$701m,
14.3%
Business
$1,373m,
28.0%
$227m
NZ NOI
$4m (1.8%)
vs FY2022
Household
$118m,
51.9%
Rural
$34m,
15.1%
Business
$75m,
33.1%
Rural
Livestock
Receivables: NZ$191m
NOI: NZ$7.4m
Rural Direct
Receivables: NZ$85m
NOI: NZ$2.6m
Rural Relationship
Receivables: NZ$424m
NOI: NZ$24.2m
Business
Asset Finance
Receivables:NZ$683m
NOI: NZ$30.3m
Relationship
Receivables: NZ$329m
NOI: NZ$18.3m
Wholesale Lending
Receivables: NZ$245m
NOI: NZ$13.5m
Open for Business
Receivables: NZ$117m
2
NOI: NZ$12.9m
Household
Motor Finance
Receivables: NZ$1.57bn
NOI: NZ$64.2m
Reverse Mortgages
Receivables: NZ$889m
NOI: NZ$42.4m
Home Loans
1
Receivables: NZ$320m
NOI: NZ$4.4m
Personal Loans
Receivables: NZ$47m
2
NOI: NZ$6.6m
1
Includes Online Home Loans and legacy Retail Mortgages.
2
Excluding the impact of changes in FX rates
9

AU divisional summary
$79m
AU NOI
$40m (102.3%)
vs FY2022
Household
$47m,
59.8%
Rural
2
$32m,
40.2%
1
Excluding the impact of changes in FX rates
2
Includesfull year contribution of StockCo Australia since the completion of acquisition on 31 May 2022.
$1,920m
AU Receivables
1
$271m (16.5%)
vs 30 June 2022
Household
$1,539m,
80.2%
Rural
$381m,
19.8%
Rural
StockCoAustralia, Livestock Finance
Receivables: AU$381m
NOI: AU$32m
Household
Heartland Finance, Reverse Mortgages
Receivables: AU$1.54bn
NOI: AU$47m
10

Page 11
Investment proposition
Page 11

Positioned to benefit from structural tailwinds
Reverse Mortgages
Addressable market estimated to be AU$10-15bn.
2
Livestock Finance
Addressable market estimated to be AU$7bn.
4
Motor Finance
Addressable market estimated to be $35bn.
8
1
Heartland does not currently have a motor finance business in Australia. Heartland intends to consider offering motor financein the Australian market following completion of the Challenger Bank acquisition, which is subject to APRA and RBNZ approval.
2
Heartland internal analysis based on
information from the ABS, Census and Deloitte. Market size based on reverse mortgage lending from banks and non-banks.
3
Sourced from ARC Centre of Excellence in Population Ageing Research as at August 2022.
4
Based on ABS total rural debt and StockCo Australia data.
5
Sourced from OECD-
FAO Agricultural Outlook 2022-2031 as at 2022. MT CWE denotes megaton carcass weight equivalent.
6
Sourced from IBISWorld Beef Cattle Farming in Australia report dated August 2022.
7
Sourced from OECD-FAO Agricultural Outlook 2021-2030.
8
Annual lending includes consumer and commercial
lending segments (see ABS 5601.0 Table 7 LTM to June 2020, and ABS 5671.0 Table 9 LTM to November 2018 (ABS discontinued ABS 5671.0 in November 2018)).
9
Based on IBISWorld New Passenger Motor Vehicle Sales report dated April 2023. Forecasted data from 2023 onwards New passengermotor
vehicles are constructed primarily for the carriage of persons and containing up to nine seats (including the driver's seat).Included are cars, station wagons, four-wheel drive passenger vehicles, campervans and passenger vans or mini buses with fewer than 10 seats.
10
Sourced from Carsales
“Acquisition of further 40% of webmotorsand Equity Raising” presentation dated 8 March 2023.
11
Australia Freight and Logistics Market to 2027.
Market dynamics
•Proportion of Australian population aged 65+ is expected
to reach 21% by 2041 (up from ~17% in 2021).
3
•Limited competition due to exit of many industry players,
including major banks.
•Increased awareness due to introduction of Government
backed Home Equity Access Scheme (HEAS) in 2019.
Market dynamics
•Global consumption and production of beef and veal, and
sheep meat projected to increase 0.62% and 1.22% annually
between 2022-2031 respectively due to a combination of
income and population growth.
5
•Rising disposable income in Asia is expected to bolster
demand for Australia’s high-quality beef.
6
•Value of sheep meat exports expected to remain high in
2023-2024 due to record production volumes and strong
demand.
7
Market dynamics
•Australian logistics and freight market projected to grow
by 5.85% from 2021-2027 (US$81bn to US$114bn).
11
•If Heartland were to provide auto lending with
bank/deposit funding, there is an opportunity to win
market share against non-banks that lack capital to grow
in the current environment.
1
4.3m
6.7m
16.8%
20.8%
'21F'22F'23F'24F'25F'26F'27F'28F'29F'30F'31F'32F'33F'34F'35F'36F'37F'38F'39F'40F'41F
Australia’s projected population aged 65+
3
Population aged 65+65+ % of Australian population
15
16
17
18
19
70
71
72
73
74
75
76
77
'22F'23F'24F'25F'26F'27F'28F'29F'30F'31F
Global projected beef, veal & sheep meat production &
consumptions (MT CWE)
5
Beef & Veal Production (LHS)Beef & Veal Consumption (LHS)
Sheep Meat Production (RHS)Sheep Meat Consumption (RHS)
707k
858k
'20A'21A'22A'23F'24F'25F'26F'27F'28F'29F'30F
New Australian passenger motor vehicle sales
9
For every new car sold, an
estimated ~3 used cars are sold
10
12
Strong structural tailwinds are supporting Heartland’s target growth sectors in Australia.
1

Subject to regulatory approval and completion, the
intention is to integrate and leverage Heartland's
common distribution channels in New Zealand to
expand into Australia.
Acquisition benefits
•Access to a deep and efficient pool of funding to
support ongoing growth across Heartland’s
Australian businesses.
•Potential uplift in margin, to the extent that retail
funding rates are less than wholesale rates.
•A platform to extend Heartland’s “best or only”
product strategy in Australia.
Outsized organic growth opportunity once banking licence acquired
1
1
Completion of the Challenger Bank acquisition is subject to APRA and RBNZ approval.
2
Based on APRA ADI Property Exposure and Heartland Finance data as at 31 March 2023. Market size based on Australian reverse mortgages issued by ADIs only.
Growth segment
Existing expertise
Reverse Mortgages
✓Leading active provider of reverse mortgages, helping 22k customers in New Zealand and 26k
customers in Australia.
✓Australian Reverse Mortgages book has more than quadrupled since acquisition in 2014,
growing market share from ~26% in March 2020 to ~38% in March 2023.
2
Livestock Finance
✓Strong expertise from the New Zealand rural portfolio, with specialist teams in both countries.
✓StockCo Australia has been operating in Australia since 2014 and is a leading specialist
livestock financier.
✓Established direct and distributor networks.
Motor Finance
✓Leading provider of vehicle finance in New Zealand, with 65+ years’ experience.
✓Heartland’s motor book grew 13.5% over FY2023.
✓Branded white label strategy for large dealer groups assisted growing market share at the
quality end of the market.
Asset Finance
✓Heartland Bank Asset Finance has grown 21% CAGR between FY19-FY23.
✓Broker and intermediary distribution strategy enables sustainable growth.
✓Targeting customers operating in productive segments of the market where sustained growth
is demonstrated.
Key to Heartland’s expansion in Australia is obtaining an authoriseddeposit-taking institution (ADI) licence. Heartland intends
to do this through the acquisition of Challenger Bank, which remains subject to regulatory approvals.
13

Strong track record of M&A
Heartland’s strong track record of successful M&A will be leveraged to actively pursue further inorganic growth opportunities.
Significant inorganic growth opportunities
Acquisitions will be explored where there is a fit with Heartland’s “best or only” product
strategy and an opportunity to add value as a means of adding scale or technology.
Opportunity
Commentary
Reverse mortgages
•Acquire reverse mortgage books in Australia from major
banks who have exited the market.
Agricultural
•Consolidate agricultural finance companies in Australia to
achieve additional scale.
•Potentially acquire select portfolios from major banks who
may look to manage capital.
Non-bank lenders –
motor and asset
finance
•Potential to acquire motor finance portfolios from non-bank
lenders where assets are under pressure given rising
funding costs, rising inflation and capital constraints.
Partnerships/white
label opportunities
•Opportunity to white label reverse mortgages with strategic
partners.
Acquisition
Overview
Challenger Bank
•Announced entry into a conditional agreement for the
acquisition of Challenger Bank, an established ADI in
Australia, in October 2022.
•Completion is subject to regulatory approval.
•Several benefits, including the opportunity to add scale to
Heartland’s Australian business.
StockCo Australia
•Completed the acquisition of StockCo Australia, a
specialist livestock finance company for cattle and sheep
producers in Australia, in May 2022.
•Broadened Heartland’s Australian offering in an area where
it already has expertise in New Zealand.
Heartland Finance
•Acquired reverse mortgage provider Australian Seniors
Finance in April 2014 –the largest non-bank reverse
mortgage lender in Australia at the time.
•Benefits included expanding into Australia, leveraging
Heartland’s existing expertise and scale in New Zealand.
14
Large inorganic growth opportunity in Australia

CTI ratio reduction initiatives
Four key automation and digitalisation initiatives:
Zero inbound calls
Digitisebasic banking requests to enable
customers to self-serve via the Heartland
Mobile App, create a seamless user
experience, and reduce inbound customer
call volumes. In doing so, employees will be
able to focus on more complex customer
requests.
•Heartland Bank’s ambition is to
reduce inbound customer call
volumes by approx. 73% by 30 June
2025 by developing Mobile App self-
service features to address the top
reasons for inbound customer calls.
Motor digitalisation
•Continued enhancement of
Motor Finance digital capabilities
to enable faster and easier
access to vehicle finance
through online application
platforms.
•Intention to rollout seven
branded online origination
platforms to Motor Finance
dealer partners in FY2024.
One-Click Deferral
Offer flexibility for customers to
self-manage their Motor Finance
loan repayments digitally via the
Mobile App, including customers in
arrears.
•Develop seven new functions
and features to enable
customers to self-manage
repayments, reducing the
need for customers to
contact Heartland Bank.
Process automation
Upgrade and introduce scalable
digital technologies to optimise
back-end processes and improve
efficiency.
Increase automation to improve
workflows and reduce manual
effort, reducing friction for
customers and employees.
•Heartland Bank’s ambition is
to automate approx. 65% of
operations and collections
manual processes by 30
June 2025.
15
45.4%
46.8%
43.6%
44.9%
44.9%
44.8%
42.5%
42.0%
FY20FY21FY22FY23
Reported CTI ratioUnderlying CTI ratio
A number of initiatives are being delivered through a systemised
programmeof work to enhance digital, self-service and
automation capabilities across Heartland Bank.
Note:
•CTI ratio is calculated as OPEX/NOI.
•Underlying CTI ratio excludes one-off impacts. For a reconciliation between reported and underlying results, refer to Appendix 3 in Heartland’s FY2023 full year results investor presentation available at heartlandgroup.info.

Page 16
Outlook
Page 16

17
Outlook
Business as usual growth
•Heartland’s strength is its track record of strong
growth in core lending portfolios.
•Growth focus will be on Reverse Mortgages,
Motor Finance, Asset Finance and Livestock
Finance.
•Supported by ongoing digitalisationand
automation of lending platforms.
•Leverage demographic-driven demand in
Reverse Mortgages.
NIM stabilisation
•NIM outlook is stable with repayment and replacement of legacy lower margin
Motor Finance and Asset Finance loans.
•Growth mix will continue to influence margin, causing acceptable contraction
offset by corresponding growth.
Ambition to double underlying NPAT within 5 years
•Since 2012, Heartland’s NPAT has more than tripled.
•Ambition to continue track record of income growth by doubling underlying
NPAT within 5 years.
Obtain an ADI licence
•Complete Challenger Bank acquisition, which
remains subject to RBNZ and APRA approval.
Post-completion, Heartland’s focus will be on
integration and leveraging its common
distribution channels in NZ to expand into AU.
Ambition to reduce underlying CTI ratio to <35% by FY2028
•Digitalisationinitiatives underway to improve operational efficiency and increase
customer self-service functionality, including One-Click Deferral, reducing
telephony, and further automation.
•Revenue growth and careful management of costs critical pathways to a
reduced CTI ratio.
•Stable CTI ratio expected while investment and delivery of initiatives continues .
FY2024 NPAT
•Heartland expects NPAT for FY2024 to be within the guidance range of $116 million to $122 million, excluding any impacts of
fair value changes on equity investments held and the impact of the de-designation of derivatives, and any costs related to
the acquisition of Challenger Bank, which remains subject to RBNZ and APRA approval.
•As the acquisition nears completion, guidance will be updated to reflect the impact of Challenger Bank becoming part of
Heartland.

Page 18
Thank you
heartlandgroup.info
Investor enquiries:
Nicola Foley
Group Head of Communications
nicola.foley@heartland.co.nz

Heartland’s sustainability framework is built on three key pillars: environment, people and financial wellbeing.
1
The Heartland Trust is Heartland’s registered charitable trust which is independent from, but closely supported by Heartland.
People
•Create a pathway and place for Heartland’s people to grow,
thrive and be empowered to achieve Heartland’s goals as
one team.
•Care for the communities Heartland operates in.
•Care for Heartland’s customers.
Financial wellbeing
•Support the financial wellbeing of
Heartland’s customers and communities.
Environment
•Support the just transition to a net-zero economy.
Unaudited operational GHG emissions for
FY2023 saw a 17% reduction on the FY2019
base year.
Introduced an environment risk screening
tool in the credit decisioning process to
understand the sustainability of larger
business and rural borrowers.
Undertook ANZSIC code analysis to
understand Heartland’s exposure to
customers in high emitting industries, or
industries subject to a heightened degree of
transitional risk as a result of climate factors.
Lending to new generation vehicles
more than doubled from 5% of all lending in
FY2022 to 11% in FY2023.
The Manawa Akointernship welcomed 25 Māori
and Pasifika interns in its sixth intake. More than
110 interns welcomed since 2017.
Heartland Bank maintained accreditation for the
Rainbow Tick, as a Hearing Accredited
Workplace, and Living Wage Employer.
More than $710,000 granted through the
Heartland Trust in the areas of education, arts and
culture, and wellbeing.
1
Heartland Bank’s products recognisedas
providing exceptional value for customers
through Canstar NZ awards for Savings Bank of
the Year and Outstanding Value Home Lender.
Supported more than 48,000
people in NZ and AU to live a more
comfortable retirement by
releasing equity from their homes
with a reverse mortgage.
Continued to offer Heartland
Extend to consumer customers,
supporting customers to make
existing loan repayments more
manageable.
Development of new features and
automation to Heartland Bank’s
mobile app and some online
application forms to enable
customers to control their own
finances in their own time.
Appendix 1: Sustainability
19

1
Underlying ROE refers to ROE calculated using underlying results. When calculated using reported results, ROE was 10.4%, down169 bps. See page 4 of Heartland’s FY2023 Investor Presentation available at http://www.heartlandgroup.info/for more information about the use of ROE, a
supplementary, non-GAAP measure.
2
Total fully imputed dividends divided by the closing share price as at 25 August 2023 of $1.72.
3
Total fully imputed dividends divided by the closing share price as at 19 August 2022 of $2.16.
4
That is, the strike price under the DRP will be 98.0% of the volume weighted average sale price of Heartland shares over the five trading days following the Record Date. For the full details of the DRP and the Strike Price calculation, refer to the Heartland DRP offer document dated 10 December 2018.
•Underlying ROE of11.9% (down 68 bps vs FY2022).
1
•EPS of 14.0 cps, down 2.1 cps compared with FY2022.
•Underlying EPS of 16.0 cps (down 0.3 cps vs FY2022).
•Final dividend of 6.0 cps, taking FY2023 total dividend to 11.5 cps, up 0.5 cps on FY2022.
•Dividend yield of9.3%
2
(FY2022: 7.1%
3
).
•Heartland’s DRP will apply to the final dividend with a 2.0% discount.
4
12.5
14.9
16.1
14.0
FY20FY21FY22FY23
EPS (cps)
11.1%
12.0%
12.6%
11.9%
Jun 20Jun 21Jun 22Jun 23
Underlying ROE
Appendix 2: Shareholder return
20