Heartland 2024 Annual General Meeting

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

NZX/ASX release
30 October 2024

Heartland 2024 Annual General Meeting

The Annual General Meeting (Annual Meeting) of Heartland Group Holdings Limited (Heartland)
(NZX/ASX: HGH) will be held online today at virtualmeeting.co.nz/hgh24 and in person at the
Hyundai Marine Sports Centre (Akarana), Auckland, New Zealand, commencing at 2pm (New
Zealand time).

Shareholders joining the online meeting will require their shareholder number for verification
purposes. From the online platform, shareholders will be able to view the presentation, vote and ask
questions during the meeting.

For more information about joining the online meeting, view the attached Virtual Annual Meeting
Online Guide.

Please find attached the following documents relating to the meeting:

1. Annual Meeting Presentation
2. Chair’s Address
3. Chief Executive Officer’s Address
4. NZ Bank Chief Executive Officer’s Address
5. AU Bank Chief Executive Officer's Address
6. Virtual Annual Meeting Online Guide.

The webcast will be available on Heartland’s website at heartlandgroup.info approximately 24 hours
after the conclusion of the live event.

– ENDS –

The person(s) who authorised this announcement:

Andrew Dixson
Chief Executive Officer

Greg Tomlinson
Chair of the Board

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

---

Annual
General Meeting
2024
30 October 2024

2
01Welcome and formalities
02Chair’s Address
03Heartland Group CEO’s Address
04Heartland Bank New Zealand CEO’s Address
05Heartland Bank Australia CEO’s Address
06Shareholder discussion
07Voting and conduct of poll
08Other business
2
AGENDA

–Proxies and postal votes received
–Meeting procedures
–Voting procedures and declaration of poll
–Notice of meeting
–Minutes of last Annual Meeting
3
OTHER FORMALITIES

4
Question boxVoting Card
VOTING AND ASKING QUESTIONS

5
Greg Tomlinson, Chair, Heartland Group
02 | CHAIR’S ADDRESS

6
ReportedUnderlying
FY2024FY2023MovementFY2024FY2023Movement
Financial
performance
NII$277.6m$282.0m

($4.3m)(1.5%)$277.8m$283.9m

($6.1m)(2.1%)
OOI
1
$12.7m$3.3m

$9.4m282.0%$20.2m$16.9m

$3.4m19.9%
NOI$290.4m$285.3m

$5.0m1.8%$298.0m$300.7m

($2.7m)(0.9%)
OPEX$139.4m$128.1m

$11.3m8.8%$124.9m$126.2m

($1.3m)(1.0%)
Impairment Expense$46.4m$23.2m

$23.2m99.7%$30.4m$23.2m

$7.2m30.9%
Tax Expense$30.0m$38.1m

($8.1m)(21.3%)$39.9m$41.1m

$1.1m2.8%
NPAT
2
$74.5m$95.9m

($21.3m)(22.2%)$102.7m$110.2m

($7.4m)(6.7%)
NIM3.39%3.97%

(58 bps)3.64%4.00%

(36 bps)
CTI48.0%44.9%

311 bps41.9%42.0%

(6 bps)
Impairment Expense Ratio
3
0.66%0.36%

30 bps0.44%0.36%

8 bps
ROE6.6%10.4%

(385 bps)9.8%11.9%

(207 bps)
EPS9.8 cps14.0 cps

(4.2 cps)13.5 cps16.0 cps

(2.5 cps)
Financial
position
Liquid Assets$1,708m$627m

$1,082m172.6%
Receivables
4
$7,241m$6,791m

$432m
5
6.4%
5
Borrowings$7,994m$6,627m

$1,366m20.6%
Equity$1,238m$1,031m

$207m20.1%
Equity/Total Assets13.3%13.3%

3 bps
Note: See page 35 of Heartland’s FY2024 IP for a definition of underlying financial metrics, available at heartlandgroup.info.
1
Reported OOI includes fair value gains/losses on investments.
2
Refer to page 8 of Heartland’s FY2024 IP for details about one-offs in the periods covered in this presentation
available at heartlandgroup.info.
3
Impairment expense as a percentage of average Receivables.
4
Receivables also includes Reverse Mortgages.
5
YoY growth excludingthe impact of changes in FX rates.
THE YEAR IN REVIEW

7
7
$
210m
Raised $210m in April 2024 to fund
the acquisition, with strong
investor support.
7.0
cps
Final dividend of 3.0 cps,
bringing the total dividend for
FY2024 to 7.0 cps.
55
%
The full year payout ratio.
SHAREHOLDER RETURN
4.5
4
5.55.5
4
2.5
7
5.5
6
3
FY2020FY2021FY2022FY2023FY2024
Dividends (cps)
Interim dividendFinal dividend

8
Transforming the business to deliver growth and
enhanced shareholder return.
•Heartland’s role as a parent company will be focused on improving shareholder
return.
•In New Zealand, Heartland Bank’s FY2025 focus is on simplification and efficiency.
•In Australia, Heartland Bank Australia has a secure position and a greater
opportunity to meet the growth potential in this market.
•Heartland’s long-term outlook is positive as it remains committed to its FY2028
ambitions.
•The volatility experienced in FY2024 has continued in the markets Heartland
operates within and continues to create too much uncertainty to provide an
accurate underlying NPAT guidance range for FY2025 at this stage.
OUTLOOK

9
Geoff
Summerhayes
Chair & Independent
Non-Executive Director
Shane Buggle
Independent
Non-Executive Director
Lyn McGrath
Independent
Non-Executive Director
Vivienne Yu
Independent
Non-Executive Director
Leanne Lazarus
Non-Independent
Non-Executive Director
Bruce Irvine
Non-Independent
Non-Executive Director
Greg Tomlinson
Chair & Non-Independent
Non-Executive Director
Kate Mitchell
Independent
Non-Executive Director
John Harvey
Independent
Non-Executive Director
Simon Beckett
Independent
Non-Executive Director
Rob Bell
Independent
Non-Executive Director
Note: See heartlandgroup.info/about-heartland/board-of-directors for full profiles.
HEARTLAND GROUP
Bruce Irvine
Chair & Independent
Non-Executive Director
John Harvey
Non-Independent
Non-Executive Director
Kate Mitchell
Non-Independent
Non-Executive Director
Shelley Ruha
Independent
Non-Executive Director
Simon Tyler
Independent
Non-Executive Director
Andrew Dixson
Non-Independent
Non-Executive Director
HEARTLAND BANK NEW ZEALANDHEARTLAND BANK AUSTRALIA
BOARD OF DIRECTORS

10
Michelle Winzer
Chief Executive Officer
Joined in 2024
David Brown
Chief Risk Officer
Joined Challenger Bank in 2021
Sarah
Burgemeister
General Counsel
Joined Heartland Finance in 2023
Medina Cicak
Chief Commercial Officer
Joined in 2024
Richard Collier
Chief Financial Officer
Joined Challenger Bank in 2024
Vaughan Dixon
Chief Technology & Operations
Officer
Joined in 2024
Sharon Yardley
Chief Compliance &
Sustainability Officer
Joined Heartland Finance in 2004
2
Leanne Lazarus
Chief Executive Officer
Joined in 2022
Andy Wood
Chief Risk Officer
Joined in 2022
Kerry Conway
Chief Financial Officer
Joined in 2024
Michael Drumm
Chief Operating Officer
Joined in 2015
Lana West
Chief People & Culture Officer
Joined in 2021
Aleisha Langdale
Chief Performance Officer
Joined in 2015
Phoebe Gibbons
General Counsel
Joined in 2020
Andrew Dixson
Chief Executive Officer
Joined in 2010
Chris Flood
1
Deputy Chief Executive Officer
Joined in 1997
Note: See heartlandgroup.info/about-heartland/management for full profiles.
1
As announced on 23 September 2024, Chris Flood will finish with Heartland on 31 October 2024.
2
Prior to Heartland’s acquisition in 2014.
HEARTLAND GROUPHEARTLAND BANK NEW ZEALANDHEARTLAND BANK AUSTRALIA
MANAGEMENT

11
03 | HEARTLAND GROUP CEO’S ADDRESS
Andrew Dixson, Chief Executive Officer, Heartland Group

12
1
2
1
StockCo Australia is a group of companies.
Heartland Group
(NZX/ASX: HGH)
Heartland Bank
Heartland Bank Australia
(previously Challenger Bank)
Heartland Australia
Holdings
StockCo Australia
1
Heartland Australia Group
Australian Seniors Finance
NZ Banking
Group
AU Banking
Group
NZ company
AU company
Heartland’s focus as the
listed parent company:
•broader group strategy
•corporate finance
•investor relations
•capital allocation
•strategic and risk management
oversight.
HEARTLAND GROUP CORPORATE STRUCTURE

13
Non-Strategic Assets includes assets that earn little or no income or are
returning less than Heartland’s cost of capital.
1
•Non-Strategic Assets will be managed and reported separately in FY2025 for greater transparency
and focused resolution strategies.
•Heartland intends to rationalise these assets over a responsible period of time.
Non-Strategic AssetsJune 2024
Equity investments$13.5m
Investment properties$3.7m
Property $12.6m
Receivables
2
- Business$74.4m
- Rural$113.7m
Total$217.8m
1
Non-Strategic Assets do not reflect a structural change to Heartland’s operations.
2
Receivables as at 30 June 2024 excluding provisions.
NON-STRATEGIC ASSETS

14
FY2028 ambitions are driven by modest Receivables growth, NIM expansion, cost savings from automation, and an improvement in impairments.
Financial metricFY2024FY2028 ambitionCommentary
Receivables$7.2b
> 10%
CAGR p.a.
•Assumes modest Receivables growth below Heartland’s track record of 11.8% over the last 4 years.
1
•Organic growth in existing Australia and New Zealand portfolios which are aligned with Heartland’s
strategic ambitions.
•Increased competitiveness in Australian Reverse Mortgages and Livestock Finance through
utilisation of bank cost of funds.
•Further upside from launch of Motor Finance and Asset Finance in Australia if it is ROE accretive.
2
Underlying NIM
3
3.64%> 4%
•Continued shift of asset mix towards higher quality portfolios and focus on recycling capital related
to Non-Strategic Assets.
•Transition of Australian funding base from 100% wholesale to a retail/wholesale funding mix to drive a
reduction in the cost of funds in the Australian business through cheaper retail deposit costs relative
to wholesale.
Underlying CTI
ratio
3
41.9%< 35%
•Investing in digitalisation and automation in New Zealand with a focus on Heartland Bank’s
Collections & Recoveries area to improve internal workflows and reduce manual effort.
•Motor digitalisation through branded online origination platforms for Motor Finance dealer partners in
New Zealand.
•Flow-on benefit of improved revenue margins.
Underlying
impairment
expense ratio
3
0.44%< 0.30%
•Heartland’s long term underlying impairment expense has been 0.37%.
4
•FY2028 ambition of < 0.30% underlying impairment expense ratio through the cycle reflects portfolio
mix transitioning towards higher quality assets (i.e. Reverse Mortgages and Livestock Finance).
12%-14%
FY2028 underlying
ROE
3
ambition
$200m+
FY2028 underlying
NPAT
3
ambition
1
CAGR calculated for the period from 30 June 2020 to 30 June 2024.
2
Subject to meeting minimum ROE hurdles and APRA consultation.
3
See pages 35-36 of Heartland’s FY2024 IP for definitions of underlying financial metrics available at heartlandgroup.info.
4
Average of impairment expense ratio
between FY2020 and FY2024.
The ratios and growth rates provided for the financial metrics underlying the FY2028 ambitions are not targets. They represent an indication of how the financial metrics may work in combination to achieve the FY2028 underlying NPAT and ROE ambitions. The
FY2028 ambitions and underlying key metrics assumes current growth in Receivables being maintained and no material deterioration in the economic environment.
FY2028 GROWTH AMBITIONS

15
04 | HEARTLAND BANK NZ CEO’S ADDRESS
Leanne Lazarus, Chief Executive Officer, Heartland Bank New Zealand

16
3.8
%
•Completed Heartland Bank’s core banking system upgrade, accelerating
digitalisation and enhancing service delivery.
•Completed Challenger Bank acquisition becoming the first New Zealand bank
to acquire an Australian ADI.
FY2024 SUMMARY
Motor Finance saw 3.8% growth in a market
where total new and used car sales by dealers
in NZ were down 12.7%.
1

Asset Finance saw 8% growth despite high
interest rates and difficult trading
conditions.
8
%
1
Based on data from Turners, dated June 2024 (data sourced from Waka Kotahi NZ Transport Agency).
20.2
%
Overall growth driven by growth in Reverse
Mortgages of 20.2%.

17
Heartland Bank New Zealand aims to simplify the business, expand its margin
and reduce costs to deliver better returns. These key strategic priorities will
drive a strong contribution to the Group’s FY2028 ambitions.
SIMPLIFICATION AND
BETTER RETURNS
Accelerate growth in strategic portfolios
•Simplify the business through identifying lending that
no longer aligns to Heartland Bank’s strategy.
•Develop focused strategies to separately manage
Non-Strategic Assets, within an appropriate time
frame.
MARGIN
EXPANSION
NIM
1
expansion >4%
•Growth in Reverse Mortgages and Motor Finance.
•Proactive management of fixed back book portfolios in
Asset Finance and Motor Finance.
•Actively increase mix of retail funding focused on
growth in call deposits.
Underlying
NIM
2
FY2024FY2024
exit
FY2025
expectation
Heartland Bank3.79%3.92%4.00%
COST
REDUCTION
Reduce costs by $5m
•Cost savings through digitalisation and automation
($3.8m).
•Digitalise 58% of basic banking functions to enable
customers to self-serve.
•Mobile app customer usage uplift to 60% and
reduction of customer calls by 35%.
•Automate 35% of processes.
•Offer customers flexibility to self manage loan
repayments for Motor Finance (from October 2024).
•Cost savings through structural and supplier efficiency
with disciplined cost management ($1.2m).
NEW ZEALAND FY2025 FOCUS
1
NIM is calculated as net interest income over average gross interest earning assets.
2
Underlying NIM refers to NIM calculated using underlying results. When calculated using reported results, NIM was 3.79%, down 32 bps compared with FY2023.

18
05 | HEARTLAND BANK AU CEO’S ADDRESS
Michelle Winzer, Chief Executive Officer, Heartland Bank Australia

19
OPERATIONAL EFFICIENCY & SERVICE EXCELLENCE
•Establish a strong leadership team and integrate cultures of
three businesses.
•Create structural efficiencies by removing duplication and
identifying process improvement.
•Invest in digitalisation and automation to improve service
delivery and enhance our customers’ experience.
•Transition from historic 100% wholesale to predominantly
(~90%) retail funding by the end of FY2025.
Heartland Bank Australia is well positioned for sustainable growth beyond
FY2025 through its focus on business growth, operational efficiency and
service excellence.
54%
90%
46%
10%
Jun-24Jun-25 expectation
Funding mix
DepositsWholesale
ESTABLISHING A SPECIALIST AUSTRALIAN BANK

20
REVERSE MORTGAGES
•Leverage the strong ongoing demographic demand for
Reverse Mortgages, providing older Australians with a
solution to remaining in their home as they age.
•Focus on process efficiency to enable growth and
increase capacity to serve more customers.
LIVESTOCK FINANCE
•Execute on Livestock Finance product development
initiatives.
•Adapt to the operating conditions and needs of the
market.
•Expand distribution networks and strengthen
partnerships to increase product reach.
DEPOSITS
•Challenger Bank’s pre-acquisition deposit raising
campaign exceeded expectations and gave us a good
head start on our funding mix transition – we are now
well positioned to fund future growth expectations.
•Planning is underway to diversify our deposit
distribution network, with new deposit product ideas
in development to bring to market in the coming
months.
BUSINESS GROWTH
Continue to focus on expansion within deposits and existing
specialist lending portfolios.

21
06 | SHAREHOLDER DISCUSSION

22
07 | VOTING AND CONDUCT OF POLL

23
RESOLUTION 1: RE-ELECTION OF KATE MITCHELL
That Kate Mitchell
who retires and is eligible for re-election,
be re-elected as a director of Heartland Group.

24
RESOLUTION 2: ELECTION OF JOHN HARVEY
That John Harvey
who retires and is eligible for election, be elected
as a director of Heartland Group.

25
RESOLUTION 3: ELECTION OF SIMON BECKETT
That Simon Beckett
who retires and is eligible for election, be elected
as a director of Heartland Group.

26
That Rob Bell
who retires and is eligible for election, be elected
as a director of Heartland Group.
RESOLUTION 4: ELECTION OF ROB BELL

27
That the shareholders of Heartland approve and ratify for all purposes, including
NZX Listing Rule 4.5.1 (c) the previous issue of 106,021,860 fully paid ordinary
shares in Heartland on 15 April 2024 in accordance with NZX Listing Rule 4.5.1
comprising (a) the issue of shares to investors at an issue price of NZ$1.00 per
share pursuant to the placement announced on 8 April 2024, and (b) the issue of
shares as scrip consideration payable by Heartland for the acquisition of shares
in Alex Corporation Limited.
RESOLUTION 5: RATIFICATION OF PLACEMENT

28
RESOLUTION 6: AUDITOR’S REMUNERATION
That the Board be authorised to fix the
remuneration of Heartland’s auditor, PwC,
for the financial year ending 30 June 2025.

29
08 | OTHER BUSINESS

Investor information
For more information, go to
heartlandgroup.info/investor-information
Investor & media relations
Nicola Foley
Group Head of Communications
+64 27 345 6809
nicola.foley@heartland.co.nz
THANK YOU

ADIAuthorised deposit-taking institutionHeartland, Heartland GroupHeartland Group Holdings Limited or the Company
APRAAustralian Prudential Regulation Authority
Heartland Bank, Heartland
Bank New Zealand
Heartland Bank Limited
bpsBasis pointsHeartland Bank AustraliaHeartland Bank Australia Limited
CAGRCompound annual growth rateIPInvestorpresentation, availableat heartlandgroup.info
Challenger BankChallenger Bank LimitedNIINet interest income
cpsCents per shareNIMNet interest margin
CTI ratioCost to income ratioNOINet operating income
EPSEarnings per shareNPATNet profit after tax
FXForeign currency exchangeOOIOther Operating Income
FY2023The financial year ended 30 June 2023OPEXOperating expenses
FY2024The financial year ended 30 June 2024ReceivablesGross Finance Receivables
FY2025The financial year ending 30 June 2025ROEReturn on Equity
FY2028The financial year ending 30 June 2028StockCo, StockCo Australia
Comprised of StockCo Australia Management Pty Ltd, StockCo
Holdings 2 Pty Ltd and their subsidiaries
The GroupHeartland GroupHoldingsLimited and itssubsidiariesYoY
Year-on-year
GLOSSARY
31

---

Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
Heartland Annual Meeting 2024:
Chair’s Address

Good afternoon, ladies and gentlemen. Thank you for joining us today.
1. The year in review
There is no doubt that the financial year ended 30 June 2024 (FY2024) was challenging and
Heartland Group Holdings Limited’s (Heartland’s) (NZX/ASX: HGH) financial results were not as
strong as we would have liked. However, in the context of a weak economy, Heartland’s net profit
after tax (NPAT) of $74.5 million, or $102.7 million on an underlying basis
1
, was solid. The same can
be said for gross finance receivables (Receivables)
2
which were up 6.4%
3
. This is testament to
Heartland’s best or only product strategy.
In FY2024, Heartland also met some key strategic milestones which have helped to pave the way for
the next phase of our evolution as a banking group.
Notably, the acquisition of Challenger Bank Limited (Challenger Bank) on 30 April 2024 saw
Heartland Bank Limited (Heartland Bank) become the first New Zealand bank to buy an Australian
bank.
Importantly though, we acknowledge that key metrics essential to shareholder return need
improvement. Our share price has not performed well in more recent times, and return on equity
(ROE) has decreased to 6.6%, or 9.8% on an underlying basis. We are focused on fixing this.
2. Shareholder return
While the recent capital raise to fund the Challenger Bank acquisition had an impact on earnings per
share, it was a necessary part of our expansion into Australia and critical to enhancing Heartland’s
longer-term value proposition.
We greatly appreciate and acknowledge the significant level of support and investment from
shareholders during that capital raise. We were pleased to raise $210 million to successfully
purchase Challenger Bank and support further growth and capital requirements across the group.

1
Financial results are presented on a reported and underlying basis. Reported results are prepared in
accordance with NZ GAAP and include the impacts of positive and negative one-offs, which can make it
difficult to compare performance between periods. Underlying results (which are non-GAAP financial
information) exclude the impact of the de-designation of derivatives, the fair value changes on equity
investments held, the Australian Bank Programme costs, an increase in provisions for a subset of legacy
lending, the Challenger Bank NPAT, and any other impacts of one-offs. Adjusted NPAT before excluding the
increase in provisions for a subset of legacy lending and the Challenger Bank NPAT was $87.9 million (Adjusted
NPAT). The use of underlying results is intended to allow for easier comparability between periods and is used
internally by management for this purpose. Refer to page 7 of Heartland’s FY2024 investor presentation (IP)
for a summary of reported and underlying results, page 8 for details about FY2024 one-offs, and pages 35 and
36 for general information about the use of non-GAAP financial measures, available at heartlandgroup.info.
2
Receivables includes Reverse Mortgages.
3
Excludes the impact of changes in foreign currency exchange (FX) rates.

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

We are taking a prudent approach to capital and expect to continue to fund our business through
organic capital generation. At this stage, we do not currently expect to seek additional capital from
the market unless we identify a growth opportunity that is sensible and beneficial for shareholders.
In this respect, the resolution seeking shareholder approval to ratify placement capacity is to
preserve optionality.
Regarding dividends, in September we paid a final dividend of 3 cents per share, bringing the total
dividend for FY2024 to 7 cents per share. The total dividend payout ratio for FY2024 was 55% of
underlying NPAT and takes into consideration the recent capital raise, the acquisition of Challenger
Bank and associated growth opportunities.
We expect to target a similar dividend payout ratio in the financial year ending 30 June 2025
(FY2025). The Board will continue to actively manage dividend settings and carefully consider the
declaration of any dividends subject to maintaining a prudent level of capital needs, while having
regard to ROE accretive growth opportunities and financial performance.
3. Outlook
The year ahead will see a transformation of the business. As we set ourselves up for long-term
success, in FY2025 we are focused on ensuring the right foundations are in place to deliver growth
and enhanced shareholder return.
Since becoming the ultimate parent company of two banks in two jurisdictions, Heartland’s role has
evolved. Its operations are now focused on group strategy, investor relations, corporate finance,
capital allocation and strategic and risk management oversight of each bank. Ultimately, Heartland
will be focused on improving shareholder return. Andrew will discuss this in more detail.
New Zealand’s focus is on simplification and efficiency. Keeping our business simple and focusing on
the markets and asset classes which allow us to be the best or only at what we do. Leanne will
expand on this shortly.
In Australia, we now have a secure position and a greater opportunity to meet the growth potential
in this market – growth which we can now fund ourselves through retail deposits. As Heartland Bank
Australia Limited (Heartland Bank Australia) continues to establish itself and bed in new ways of
working, structural and process efficiencies will increase the bank’s capacity to do more. Michelle
will share more on this in her address.
All of this is expected to contribute towards our ambitions as a Group for the financial year ending
30 June 2028 (FY2028).
Looking towards the end of FY2025, as the New Zealand and Australian economies improve, we
expect this to have a positive effect on lending performance.
However, the volatility we experienced in FY2024 has continued in the markets we operate in and
continues to create too much uncertainty to provide an accurate underlying NPAT guidance range
for FY2025. We will revisit our ability to provide guidance as the financial year progresses.

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

With that said, under Andrew, Leanne and Michelle’s leadership, the Board is confident in
Heartland’s ability to execute against its best or only strategy and deliver enhanced value to
customers and shareholders.
4. Board and Management updates
Moving to Board and Management updates, this year saw several changes, largely as a result of the
Australian bank acquisition.
Board
On 30 April 2024, we were pleased to appoint a highly skilled Board to lead Heartland Bank Australia.
The Board is chaired by Geoff Summerhayes and has a strong level of independence and regulatory
knowledge to drive our strategy for expansion in Australia.
Following Ellie Comerford’s resignation from the Heartland Group Board on 26 June 2024, we were
pleased to strengthen the Board’s Australian capability with the appointments of Rob Bell and Simon
Beckett on 27 June 2024. In addition to their Australian banking expertise, Rob and Simon bring
skillsets which complement the Group’s best or only strategy. This includes Rob’s expertise in digital
banking, technology and growth strategies, and Simon’s motor finance experience.
On 30 April 2024, John Harvey was also appointed to the Heartland Group Board. He remains on the
Heartland Bank Board.
Management
On 22 July, we welcomed Michelle Winzer to the role of Chief Executive Officer (CEO) of Heartland
Bank Australia. Michelle has made great progress in bringing the three Australian businesses
together in very quick time, in a highly regulated market. Michelle will speak to this in more detail
soon.
After 15 years with Heartland and its predecessors, on 30 September 2024, Jeff Greenslade retired
from his role as CEO of Heartland, and from all of his Heartland directorships. As one of Heartland’s
founders, Jeff’s contribution to the business and our shareholders has been outstanding, as I am
sure you will agree.
On 1 October 2024, the Board was pleased to appoint Andrew Dixson as CEO of Heartland. The
Board is confident in Andrew’s ability to lead Heartland in the next stage of its journey, focused on
capital allocation and an improved return on equity.
As announced in September, Andrew’s previous role of Group Chief Financial Officer will not be
replaced, and the Deputy Group CEO role has been disestablished. This means Chris Flood will finish
with Heartland on 31 October 2024.
As many of our shareholders will be familiar, Chris first joined Heartland through a predecessor
entity in 1997 and has held a number of senior management positions at Heartland. This included as
CEO of Heartland Bank before he was appointed Deputy Group CEO in August 2022.

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

On behalf of the Board, I would like to express our sincere thanks to Chris for his significant
contribution to Heartland and acknowledge the value he has created for our shareholders. We wish
him all the best in his next endeavours.
5. Conclusion
I wish to conclude my address this afternoon by expressing my sincere thanks and gratitude to our
shareholders. We appreciate the confidence you have placed in us and are committed to delivering
enhanced shareholder return. This is something which we take very seriously.
Thank you also to my fellow directors for their wise counsel, and the Management team who
continue to provide strong leadership for Heartland.
On behalf of the Board and Management, I wish to thank Heartland’s employees for their hard work
and dedication to our customers.
Thank you once again. I will now ask Andrew Dixson to address you.

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Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
Heartland Annual Meeting 2024:
Chief Executive Officer’s Address

1. Introduction
Good afternoon and welcome all,
I would like to thank our shareholders, Boards, Management teams and employees for their ongoing
support of Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) which has enabled the
achievement of several strategic milestones amidst a backdrop of challenging economic conditions.
We are now well positioned to capitalise on opportunities in our chosen markets as economic
recovery progresses.
I am extremely honoured in the Board’s faith in appointing me as Heartland Chief Executive Officer
(CEO). I have been with Heartland for more than 14 years in various roles, including for the past four
years as Group Chief Financial Officer.
In my time at Heartland, I have been fortunate to have been part of each significant building block of
the business, including the initial merger in 2011, New Zealand bank registration in 2012 and
Heartland’s listing on the NZX and ASX. I have also been involved in the execution of every major
strategic acquisition, including the Reverse Mortgage businesses in 2014, StockCo Australia in 2022
and Challenger Bank Limited (Challenger Bank) (now Heartland Bank Australia Limited (Heartland
Bank Australia)) this year.
As Greg described, Heartland’s role as the parent company of two banks has evolved. With it, the
role of CEO has changed and is different to that held previously.
We now have two specialist banks with their own boards, and exceptional teams led by great leaders
in Leanne Lazarus and Michelle Winzer respectively.
Heartland’s role as the listed parent company will encompass broader group strategy, corporate
finance, investor relations, capital allocation and strategic and risk management oversight of each
bank.
As the interface between our internal businesses and the external market, the fundamental purpose
of Heartland is to maximise shareholder value. My immediate focus therefore is addressing
Heartland’s return on equity (ROE) and, in doing so, ensuring that capital is allocated to the parts of
our business that generate strong returns. This discipline is paramount in an environment of
standardised prescriptive capital requirements. Capital is one of our most precious resources, and it
must be utilised efficiently.
The successful completion of two capital raises during the past two years has enabled key strategic
acquisitions in StockCo Australia, our Australian Livestock Finance business, and Heartland Bank
Australia.
This, alongside our existing Reverse Mortgage businesses, has set a solid foundation from which to
achieve our long-term ambitions.

Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
2
As acknowledged by Greg, we appreciate the support and patience shown by our shareholders in
completing these acquisitions. Despite the tough trading conditions the business has experienced,
we remain positive about livestock market recovery, in-train product and distribution initiatives, and
the successful transition of our Australian funding base from purely wholesale to around 90%
deposits by the end of the financial year ending 30 June 2025 (FY2025) which will provide a strong
margin uplift and unlock growth opportunities.
Our Reverse Mortgage businesses remain well positioned as product and service leaders in their
respective markets. We expect strong demand to continue for reverse mortgages, supported by a
growing demographic need. We are committed to being the retirement finance provider of choice
and plan to grow the market and secure more of it with a broader product offering and enhanced
distribution network.
2. Non-Strategic Assets
A key part of simplifying our business and improving ROE is the reallocation of capital from assets we
have identified as non-strategic. These are a pool of assets that Heartland Bank Limited (Heartland
Bank) has accumulated over time during its journey to date
1
. As the business has matured, these are
no longer a strategic fit for the organisation and do not contribute positively to Heartland Bank’s
ROE.
The total value of these assets at 30 June 2024 was $217.8 million, out of total assets of $9.3 billion.
We have commenced development of realisation strategies and will report on these assets
separately in FY2025 to provide greater transparency. This will allow underlying capital to be
redeployed to support value accretive growth within Heartland Bank.
3. FY2028 ambitions
While we remain cautious in the near term, we expect growth in core lending to return, and asset
quality metrics to stabilise as economic recovery progresses during FY2025. We are already
experiencing an improvement in our net interest margin, and these factors will support our
ambitions for the financial year ending 30 June 2028 (FY2028) as we enter the financial year ending
30 June 2026 (FY2026).
Our stated FY2028 ambition is for the Group to deliver a return on equity between 12-14% while
achieving a net profit after tax of $200 million.
The pathway to achieving this is through simplification and product excellence. We will continue to
be different, enable better lives for New Zealanders and Australians through our specialist banking
products, and continue to make things easier for our people and customers.
Achieving this ambition will involve:
• 10% p.a. gross finance receivables (Receivables)
2
growth in our core lending products
• returning net interest margin above 4% through a focus on best or only products

1
Non-Strategic Assets do not reflect a structural change to Heartland’s operations.
2
Receivables includes Reverse Mortgages.

Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
3
• cost containment through automation, leading to an improved cost to income ratio – targeting
less than 35%
• an efficient assessment of credit, management of arrears, and collections and recoveries to
maintain high asset quality and improve our impairment expense ratio.

4. Conclusion
In conclusion, our fundamental purpose is to maximise shareholder value. This means ensuring
activity is driven toward value accretive outcomes, measured by ROE. To do this, we must focus on
where capital is deployed and how efficiently it is utilised.
I am pleased to now hand firstly to Leanne Lazarus, followed by Michelle Winzer, to provide updates
on our respective New Zealand and Australian bank strategies.

---

Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
Heartland Annual Meeting 2024:
Heartland Bank New Zealand CEO’s Address

1. Introduction and FY2024 summary
Kia ora koutou, hello everyone,
As noted by Greg, the financial year ended 30 June 2024 (FY2024) was challenging economically. For
Heartland Bank Limited (Heartland Bank), while Reverse Mortgages continued to perform extremely
well, we saw a reduced level of growth from what we typically see in our Motor Finance and Asset
Finance portfolios.
Buying or upgrading to a new car was deprioritised for many New Zealanders – this was clear as total
new and used car sales by dealers in the New Zealand market were down 12.7%
1
. In comparison,
Heartland Bank’s Motor Finance portfolio saw 3.8% growth. Similarly, in Asset Finance, high interest
rates and difficult trading conditions meant lower margin loans continued to take longer to roll off as
customers took longer to refinance assets. This portfolio still saw pleasing growth of 8%.
As customers responded to the challenging environment, we did see a deterioration in non-
performing loans, within Motor Finance and Asset Finance and an increase in provisions. We spoke
about this in detail within our FY2024 results announcement in August and described the May and
June deterioration in domestic economic conditions and the impact this had on additional specific
and collective provisions.
The recent reduction in the rate of inflation and the associated fall in the Official Cash Rate signals a
positive change for the New Zealand economy. While this is encouraging, the projected
unemployment rate and the lag between interest rates and business outcomes means we expect
some volatility to continue through the financial year ending 30 June 2025 (FY2025) for the New
Zealand bank.
Our ongoing investment in operational process efficiency and systems automation is having a
positive effect on arrears management. Alongside this, we are continuing to support customers
through the last stage of this economic downturn.
We have been diligently ensuring the fundamentals are in place to restore growth when the
economy turns. We are doing this through our process automation and digital programme of work,
and through simplification, which I’ll discuss shortly.
Strategically, we are incredibly proud of what we achieved in the last year. We completed the
upgrade of our core banking system. This was a multi-year investment and really sets us up for
success in terms of our ability to continue to effectively service our customers and improve our
digitalisation efforts.

1
Based on data from Turners, dated June 2024 (data sourced from Waka Kotahi NZ Transport Agency).

Heartland Group Holdings Limited | 0800 85 20 20 | PO Box 9919, Newmarket, Auckland 1149 | shareholders.heartland.co.nz
2
We also became the first New Zealand bank to acquire an Australian bank. With this privilege comes
a greater responsibility to ensure integration and oversight of the Heartland New Zealand Banking
Group, including Heartland Bank Australia Limited (Heartland Bank Australia) and its subsidiaries.
Greg and Andrew have both discussed the evolution of the group following the milestone
acquisition. This requires a change in the way we do things across all entities, and ensuring we have
the foundations in place to achieve our strategic ambitions.
In New Zealand, we are focused on simplification and efficiency.
2. FY2025 focus
Simplification
By simplifying the New Zealand business, we intend to accelerate growth in our strategic, core
lending portfolios, and generate better returns.
This is about enabling us to focus on the portfolios that we know have a good return and will allow
us to restore profitability. Business and Rural lending gross finance receivables (Receivables)
2
made
up about $190 million of the $217 million of Non-Strategic Assets
3
(NSAs) at 30 June. Our strategy to
manage these loans is to sell or run down the portfolios over a responsible period.
NIM
4
expansion and cost reduction
Expanding our margin and cost reduction are key areas of focus for the New Zealand bank in FY25.
We started to see an improvement in NIM at the end of FY2024. Our underlying
5
exit NIM, the NIM
on 30 June 2024, was 3.92%. By the end of FY2025, we expect NIM to be 4%. We are confident we’ll
get there through a number of measures.
Our active management of NSAs and increasing our focus on core lending will contribute to this. As
will continued improvement in our fixed rate portfolios, mostly Motor Finance and Asset Finance,
and cost of funds benefits as interest rates reduce further.
On costs, while we expect our cost to income (CTI) ratio to increase in FY2025, we have a clear
strategy and plan in place to reduce costs through digitalisation initiatives and structural efficiencies.
Our aim is to extend our best or only strategy to our CTI ratio and become the lowest cost provider
for the products we offer.
3. Conclusion
Heartland Bank has a long history of helping New Zealanders with their finances and in doing things
differently. We have proven there is strength in our best or only strategy and in the addressable
markets we operate in.

2
Receivables as at 30 June 2024 excluding provisions.
3
NSAs do not reflect a structural change to Heartland Group Holding Limited’s (Heartland’s) operations.
4
Net interest margin (NIM) is calculated as net interest income over average gross interest earning assets.
5
Underlying NIM refers to NIM calculated using underlying results.

Heartland Group Holdings Limited | 0800 85 20 20 | PO Box 9919, Newmarket, Auckland 1149 | shareholders.heartland.co.nz
3
• A recent research paper funded by the Retirement Commission reported that about 25%
6
of
New Zealand households have low retirement income and limited options to access liquid
wealth but hold substantial equity in the owner-occupied homes. We are proud to offer
Reverse Mortgages as a financial solution for this audience and our ageing population.
• Most households need a vehicle, which we can support access to through Motor Finance.
• We also have a growing opportunity within New Zealand’s infrastructure and agricultural
sectors to provide specialised finance solutions through our Asset Finance and Livestock
Finance products.
As we simplify our business and continue our digitalisation programme, we are setting a strong
foundation to contribute towards meeting the Heartland’s ambitions for the financial year ended 30
June 2028 (FY2028).
Thank you to Heartland’s shareholders and our New Zealand bank customers for your support. I will
now hand over to Michelle to discuss the Australian bank.


6
Source: “Do New Zealand home equity release schemes provide value for money?", Motu Economic and
Public Policy Research.

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Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
Heartland Annual Meeting 2024:
Heartland Bank Australia CEO’s Address

1. Introduction
Good afternoon,
I have the great privilege of leading Heartland Bank Australia Limited (Heartland Bank Australia). I
joined the business towards the end of July 2024, so will be taking more of a forward-looking
approach today.
But first a bit about me. I have had over 30 years’ experience in banking, with extensive experience
in Australia’s major banks, but most recently more experience in smaller banks. My strength is in
leadership, business growth and a full understanding of the end-to-end process of our business.
With that, I bring to Heartland Group Holdings Limited (Heartland) the best of the big bank
disciplines, coupled with the dynamic customer-focused approach of a small bank.
I am very excited by the potential to deliver our best or only strategy to the Australian market, and
know we have the capability and product offering to make a real difference.
2. Establishing a specialist Australian bank
Heartland completed its acquisition of Challenger Bank Limited (Challenger Bank) on 30 April 2024.
It’s existing businesses, Heartland Finance’s Reverse Mortgages and StockCo Australia’s (StockCo)
Livestock Finance, were then transferred into the bank, which was subsequently rebranded to
Heartland Bank Australia. We continue to offer Livestock Finance under the StockCo brand.
Since then, the focus has been on integration and bringing together the cultures of these three
businesses. In doing so, we’ve identified, and will continue to identify, opportunities to remove
duplication, improve processes, streamline what we do, and deliver faster time to service for our
customers. These operational efficiencies will increase our capacity to do more.
This includes ensuring we have the right structure in place to provide value and exceptional service
to customers, grow as a business and contribute towards Heartland’s ambitions for the financial year
ending 30 June 2028 (FY2028).
We recently welcomed some new roles to the leadership team, including a Chief Commercial Officer
and Chief Technology & Operations Officer. These roles join the already existing strong executive
team.
A large part of process improvement will be through digitalisation and automation. This is of course
part of who we are and what we do across the Group. Our investment in digitalisation and
automation is aimed at improving service delivery and enhancing the experience for our customers
and our team.
Prior to the acquisition, Heartland relied on costly wholesale funding to fund its Australian
businesses. This was a key driver for obtaining an authorised deposit taking institution (ADI) in

Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
2
Australia. Transitioning Heartland Bank Australia’s funding mix from 100% wholesale funding to
predominantly retail funding is a key part of our ability to do more. Since completion, we have been
originating and funding all lending through deposits on our own balance sheet while wholesale
facilities continue to repay. So, we are well on track to meet our target of about 90% retail funding
by the end of the financial year ending 30 June 2025 (FY2025).
The benefits of this transition will flow through to improvements in Heartland Bank Australia’s
underlying cost to income (CTI) ratio and underlying net interest margin (NIM).
3. Business growth
We have had incredible success with deposit raising to date. In fact, Challenger Bank’s pre-
acquisition deposit raising campaign exceeded Heartland’s expectations and gave us a good head
start on our funding mix transition. This of course sets us up well to fund future growth expectations.
We are working on opening up and diversifying our deposit distribution network, and are developing
new deposit product ideas to bring to market in the coming months.
Similarly to the New Zealand bank, we are focused on keeping things simple. This means focusing on
our existing specialist lending portfolios of Reverse Mortgages and Livestock Finance before looking
to expand into new asset classes.
In the first half of the financial year ended 30 June 2024 (FY2024) livestock producers experienced
one of the steepest and sharpest falls in livestock prices since the 1970s. This was the main driver for
the decrease in Australian Livestock Finance gross finance receivables (Receivables) which were
down $103.0 million, or 27.5%
1
,

to $272.0 million. Receivables balances stabilised in the second half
of FY2024 as trading conditions in some states and the volatility in livestock prices eased. In the last
three quarters of the year, we actually saw an increase in the total number of livestock financed, up
from 578,000 on finance at the end of September 2023, to finish the year with 635,000 on finance at
the end of June 2024.
Despite the extreme market and seasonal conditions that our StockCo customers have endured, the
relatively low level of provisioning is an indication of the credit strength and resilience of the
portfolio and the sector.
As Leanne has said for New Zealand, Livestock Finance is very reliant on the weather. We have seen
an improvement, however, to set ourselves up for success we need to find ways where we can serve
the needs of Australian food producers without such reliance on climatic conditions.
In bringing the Australian businesses together, we’ve taken the opportunity to deep dive into
StockCo and specifically how we offer our Australian Livestock Finance. We are adapting to the
conditions we arere operating within, and the needs of the market to develop new livestock finance
products and broaden our distribution model. We expect this to contribute to growth in FY2025.
When it comes to Reverse Mortgages, we have more opportunity than we currently have the
capacity for. This is being driven primarily by Australia’s ageing population. Our focus on process

1
Excludes the impact of changes in foreign currency exchange rates.

Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
3
efficiency will enable growth and help us to serve more customers. In fact, we have already more
than halved our time to serve and hope to reduce this further over the coming year.
4. Conclusion
Looking beyond FY2025, Heartland Bank Australia is well positioned for growth. With the right
structure in place, and as we continue to bed in new ways of working, we have a great opportunity
to expand our business and become known as a leading specialist bank. I am incredibly proud of
what we are achieving and the opportunity available for us to help more Australians with their
specialist banking needs.
Thank you for your time.

---

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