Heartland publishes Annual Report, Climate Report and NOM
Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
NZX/ASX release
30 September 2025
Heartland publishes Annual Report, Climate Report and
Notice of Meeting
Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) has today published its Annual
Report and Climate Report for the year ended 30 June 2025 (FY2025), and its Notice of Meeting for
its 2025 Annual General Meeting (Annual Meeting).
Annual Report
Heartland’s FY2025 Annual Report is available at heartlandgroup.info/investor-information/reports-
results-presentations and will be sent to shareholders if requested. A copy is attached.
Climate Report
Heartland’s FY2025 Climate Report is available at heartlandgroup.info/sustainability. A copy is
attached.
Notice of Meeting
In recognition of Heartland’s 150-year history, which began with the founding of the Ashburton
Permanent Building & Investment Society in 1875, Heartland is pleased to host its hybrid Annual
General Meeting (Annual Meeting) in Ashburton, New Zealand. Heartland’s Annual Meeting will be
held online at virtualmeeting.co.nz/hgh25 and in person at Hotel Ashburton, Ashburton, New
Zealand on Thursday 13 November 2025, commencing at 10.00am (New Zealand time).
The Notice of Meeting and Voting and Proxy Form are available from heartlandgroup.info/investor-
information/annual-meetings and will be sent to shareholders shortly. Copies are attached.
Shareholders are encouraged to submit questions in advance of the Annual Meeting by going to
vote.cm.mpms.mufg.com/HGH or by email to meetings.nz@cm.mpms.mufg.com (with the words
Heartland Group Holdings in the subject line for easy identification).
For shareholders submitting a postal vote or appointing a proxy, completed voting forms must be
received by Heartland's share registrar MUFG Pension & Market Services, or postal votes and proxy
appointments lodged online, by no later than 10.00am (New Zealand time) on 11 November 2025.
The Annual Meeting recording will be available on Heartland's website at
heartlandgroup.info/investor-information/annual-meetings after the conclusion of the live event.
– ENDS –
The person 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, nicola.foley@heartland.co.nz
Level 3, Heartland House, 35 Teed Street, Newmarket, Auckland, New Zealand
---
Annual
Report 2025
CONTENTS
Contents
Greg Tomlinson
Chair and Non-Independent, Non-Executive Director
John Harvey
Independent, Non-Executive Director
This Annual Report of Heartland Group Holdings Limited (Heartland) is dated
30 September 2025 and is signed on behalf of the Board of Directors by:
01 Year in review _____________________________________________________________ 3
Chair and CEO's report
______________________________ 4
FY2025 results at a glance
________________________ 10
Finding the financial freedom to age in place
___12
Enabling growth for farmers
_______________________16
02 Who we are
_______________________________________________________________19
Our business
________________________________________20
Directors
_____________________________________________ 22
Management
_______________________________________ 28
03 Sustainability
________________________________________________________30
Environment
________________________________________ 32
People
_______________________________________________ 33
Financial wellbeing
_________________________________ 42
04 Disclosures
______________________________________________________________44
Corporate governance
____________________________ 45
Directors' disclosures
______________________________ 60
Remuneration report
______________________________ 65
Shareholder information
__________________________ 76
Other information
___________________________________ 77
05 Financial results
____________________________________________________78
Financial commentary
_____________________________ 79
Financial statements
_______________________________ 84
Auditor's report
____________________________________ 161
06 Directory
________________________________________________________________168
07 Glossary
__________________________________________________________________169
01
Year in review
YEAR IN REVIEW
4
Chair and CEO's report
The financial year to 30 June 2025 (FY2025) presented a
unique set of challenges and opportunities, marked by a
period of significant reset, change and integration. During
this time, we prioritised capital efficiency, restoring a
superior margin, and actively derisking some of our lending
portfolios. While this had an impact on underlying financial
performance, particularly in the first half of the financial year
(1H2025), we have strengthened Heartland’s foundation for
future growth and value creation.
Good momentum was achieved in the second half of the
financial year (2H2025) as Heartland substantially met
the 2H2025 financial performance expectations set out
in its 1H2025 financial results announcement. Heartland’s
FY2025 net profit after tax (NPAT) was $38.8 million. On an
underlying basis¹, FY2025 NPAT was $46.9 million, meeting
underlying NPAT guidance of at least $45 million. Read more
about Heartland’s FY2025 financial performance on page 79.
Greg Tomlinson
Chair and Non-Independent,
Non-Executive Director
Andrew Dixson
Chief Executive Officer (CEO)
1 Financial results for Heartland and its subsidiaries (the Group) 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 for FY2025 (which are non-GAAP financial information) exclude the impact of one-off regulatory assurance costs arising in relation to
the acquisition of (now) Heartland Bank Australia, one-off staff exit costs, the de-designation of derivatives, fair value changes on equity investments held,
other non-recurring costs and other impacts of non-recurring income. The use of underlying results is intended to allow for easier comparability between
periods and is used internally by management for this purpose. For a summary of reported and underlying results, details about FY2025 one-offs and general
information about the use of non-GAAP financial measures, refer to Heartland’s FY2025 investor presentation available at heartlandgroup.info.
2 Unsecured Lending includes Open for Business and Personal Lending portfolios which are winding down.
3 Industry average arrears are based on auto arrears as at June 2025, reported by Centrix in its Credit Insights Report, July 2025.
5
Reset
In FY2025, we refined our strategic focus to
concentrate on core products capable of
delivering threshold return on equity (ROE).
As a result, Heartland restored its net interest
margin (NIM) to near-historic levels, with
Heartland Bank Limited (Heartland Bank) and
Heartland Bank Australia Limited (Heartland
Bank Australia) each delivering strong exit
margins (4.13% and 3.59%, respectively)
driven by lower costs of funds.
Compelling growth continued in Reverse
Mortgages in both New Zealand and Australia,
with gross finance receivables (Receivables)
up 15.5% and 18.5% respectively,
demonstrating the growing market demand
for this product. Livestock Finance also
demonstrated strong performance, achieving
an 18.4% increase in Receivables in New
Zealand and a return to growth in Australia,
with Receivables up 1.5%, arresting the 27.5%
decline experienced in the financial year
ended 30 June 2024 (FY2024). Conversely,
growth in Heartland Bank’s Motor Finance and
Asset Finance portfolios remained challenged
due to subdued economic conditions and a
focus on higher quality lending.
Capital optimisation was a key priority
in FY2025. This was reflected in several
initiatives undertaken by Heartland Bank,
including the run off of Unsecured Lending²
and the accelerated realisation of non-
strategic assets (NSAs), such as Online Home
Loans, enabling the redeployment of capital
into high-return core lending portfolios. Good
momentum has been maintained through the
first quarter of the financial year ending 30
June 2026 (FY2026), as Heartland continues
the active realisation of NSAs.
Change
A notable impact to Heartland’s FY2025
financial performance was the increase in
impairment expense, up $25.2 million (54.3%).
This was due to a significant increase for
Heartland Bank in 1H2025 in response to
the impact of the ongoing deterioration in
economic conditions in New Zealand and
to derisk and reposition some of its lending
portfolios (as previously announced on 18
February 2025).
Heartland Bank subsequently embedded
more prescriptive collections and recoveries
policies in 2H2025. These changes have
had a positive effect on asset quality and
delivered early, tangible improvements, with
Heartland Bank’s total Motor Finance arrears
now outperforming the industry average³
and recovery outcomes exceeding initial
expectations.
Integration
FY2025 marked a pivotal year in Heartland’s
evolution, defined by the successful
integration of the Australian authorised
deposit-taking institution (ADI) into
Heartland. As a condition of the acquisition,
Heartland required a change in its role as
the listed parent company of two banks.
A number of responsibilities shifted from
Heartland to the respective banks, with
Heartland’s operations now focused on
group strategy, investor relations, corporate
finance, capital allocation, and strategic and
risk management oversight of each bank.
Our existing Australian businesses have
now been integrated into the acquired ADI to
create a new, unique bank – Heartland Bank
Australia. The Australian funding transition
has been successful, as deposits now form
81% of the bank’s funding, providing a deep,
stable and diverse platform to efficiently fund
lending growth.
Integration efforts extended to strengthening
Heartland Bank Australia’s leadership team,
who are supported by an experienced Board
of Directors with substantial expertise in
YEAR IN REVIEW
6
banking, prudential regulation and local
markets. Board and Management updates
which took place in FY2025 are detailed below.
Board and management updates
Heartland
On 5 March 2025, Michael Jonas became
Chief Strategy Officer for Heartland, a new
position focused on guiding Heartland’s
strategic direction. With over 35 years’
experience in banking and finance law,
Michael previously helped shape Heartland’s
growth, NZX-listing, New Zealand bank
registration, and expansion into the
reverse mortgage market in New Zealand
and Australia. He returned to Heartland in
2022 as a consultant and was key in the ADI
acquisition.
Heartland Bank
As part of Heartland Bank’s more proactive
and prescriptive approach to supporting
customers in arrears, on 18 February 2025,
Peter Griffin was appointed to the new role
of Chief Asset Management Officer, leading
Heartland Bank’s arrears management
and loan recovery activities. Peter joined
Heartland Bank in 2011 and has over 35 years’
experience in the business banking sector,
including at BNZ and ASB. During his time
at Heartland Bank, Peter has held senior
leadership positions for various lending
portfolios across the distribution spectrum.
Reflecting Heartland Bank’s refined focus on
its core lending portfolios, on 8 September
2025, Alistair Scott was appointed to the
role of Chief Asset & Auto Finance Officer.
Alistair brings over 30 years’ experience in
the automotive industry, including most
recently with Jaguar Land Rover. His wealth
of expertise spanning senior positions in
sales, franchise management and business
development in Asia, Latin America, Australia,
and the UK is expected to significantly
strengthen Heartland Bank’s Motor Finance
and Asset Finance portfolios.
On 15 September 2025, Rebecca Thomas
joined Heartland Bank as Chief Digital
Transformation Officer, marking the
reinvigoration of Heartland Bank’s digital
transformation. With more than 25 years’
experience in technology, data, and
enterprise transformation, Rebecca’s
background covers multiple industries,
including insurance, engineering,
government, and professional services.
Rebecca’s expertise in technology operations
and focus on AI and data-driven initiatives
Change to Heartland CEO
On 30 September 2024, Jeff Greenslade
retired as Heartland’s founding CEO,
and from all Heartland directorships,
after his 15-year tenure and substantial
contribution to the growth and
development of Heartland.
Jeff was succeeded by Andrew Dixson
who assumed the role of Heartland
CEO as well as Non-Independent
Non-Executive Director of Heartland
Bank effective 1 October 2024. Andrew
was subsequently appointed a Non-
Independent Non-Executive Director
of Heartland Bank Australia on
3 February 2025.
Since joining Heartland in 2010, Andrew
has held several key roles, including
Head of Corporate Finance and Group
Chief Financial Officer. His tenure has
encompassed significant milestones
in the organisation’s development,
such as the 2011 merger, New Zealand
bank registration in 2012, NZX/ASX dual
listing, and the strategic acquisitions
of the Reverse Mortgage businesses
(2014), StockCo Australia (2022) and the
Australian ADI (2024).
Andrew’s experience in overseeing
strategic initiatives and corporate
finance, combined with his focus on
group strategy and capital allocation,
provides a strong foundation for the
next chapter in Heartland’s journey.
The Board is confident in Andrew’s
leadership and his ability to guide
Heartland towards continued growth
and value creation for our shareholders.
Greg Tomlinson
Chair, on behalf of the Board
4 The Heartland Trust is Heartland’s registered charitable trust which is independent from but closely supported by Heartland.
5 Subject to the Board considering Heartland’s capital needs, ROE accretive growth opportunities, balance sheet flexibility and financial
performance.
7
will support Heartland Bank’s digital
transformation and operational efficiency.
Heartland Bank Australia
On 22 July 2024, Michelle Winzer commenced
her role as CEO of Heartland Bank Australia.
Michelle has over 30 years’ experience in
banking and financial services, including
previously serving as Chief Executive Banking
at RACQ Bank. Michelle’s considerable
experience in banking and ability to drive
results and cultural transformation has
supported the successful integration
of the Australian businesses and will be
instrumental in advancing the strategic goals
of Heartland Bank Australia.
On 1 July 2024, Vaughan Dixon was
appointed Chief Technology & Operations
Officer, bringing over 25 years’ expertise
in technology, credit risk and analytics.
Vaughan’s extensive experience and
leadership across technology and operations
will contribute to advancing Heartland Bank
Australia’s technology and operational
growth ambitions.
On 8 August 2024, Medina Cicak joined
as Chief Commercial Officer, overseeing
Deposits, Reverse Mortgages and Livestock
Finance. With over eight years’ experience
in banking and financial services, including
senior roles at Suncorp Bank and RACQ
Bank, Medina’s appointment created greater
synergy across Heartland Bank Australia’s
distribution teams and is expected to
continue to contribute to the bank’s ability to
support more Australians with their specialist
banking needs.
Sustainability
As a trans-Tasman banking group, Heartland
has a significant opportunity to have a greater
impact in the communities within which
we operate. This is reflected in Heartland’s
sustainability framework which centres on
environmental, social and financial wellbeing.
In FY2025, Heartland made good progress in
its sustainability efforts. It strengthened its
capability to assess and manage climate-
related risks, reduced Heartland’s absolute
gross operational emissions by 42% from
the base year ended 30 June 2019 (FY2019)
(outperforming the original 35% target), and
set new science-aligned emissions targets
to reduce its operational footprint further
by the financial year ending 30 June 2030
(FY2030). Heartland continued to support
its communities through initiatives like the
Manawa Ako internship programme, which
welcomed 29 interns in FY2025, and the
funding it provides to community groups
and organisations through the Heartland
Trust⁴. Heartland Bank also introduced a new
product, the Village Access Loan, to provide
a financial solution to some of the barriers
associated with moving into retirement living.
For more information, refer to the
Sustainability section on page 30 and
Heartland’s Climate Report.
Shareholder return
While Heartland’s ROE and earnings per
share (EPS) are below historic levels, we saw
a strong rebound in 2H2025, with ROE at 6%
and EPS at 4.6 cents per share (cps).
The Board resolved to pay a fully imputed final
dividend of 2.0 cps on Friday 12 September
2025 to all shareholders on Heartland’s
share register as at 5.00pm NZST on Friday
29 August 2025. Together with the interim
dividend, the total FY2025 dividend was 4.0
cps. The payout ratio for 2H2025 of 52% was
in line with Heartland’s target dividend payout
ratio of at least 50% of underlying NPAT.
The Board continues to target a total dividend
payout ratio of at least 50% of underlying
NPAT in FY2026.⁵
FY2026 outlook
As Heartland capitalises on the positive reset,
change and integration that has taken place
in FY2025, Heartland is confident in its ability
to deliver in FY2026 an underlying ROE of at
least 7% and an improved underlying NPAT of
at least $85 million.
To enable this, our focus for FY2026 is on
maintaining a refined strategic focus, core
lending growth, expanding further into the
reverse mortgage market, operational cost
control, leveraging technology to unlock
efficiency, scalability and future growth and
continuing to prioritise efficient use of capital.
6 The total addressable market opportunity for reverse mortgages is a best estimate only and based on a combination of publicly available
information and internal sources.
YEAR IN REVIEW
8
In New Zealand, the Depositor Compensation
Scheme (DCS), which came into effect on
1 July 2025, presents an opportunity for
Heartland Bank to increase its share of
domestic deposits. As a small domestic bank
and Canstar New Zealand’s Savings Bank
of the Year for eight consecutive years, the
protection provided to eligible depositors
under the DCS gives Heartland Bank an
opportunity for increased competitive
differentiation as depositor confidence
increases and deposit diversification is
encouraged.
Reverse Mortgages remain a central growth
engine for Heartland. In both New Zealand
and Australia, demand for retirement-focused
financial solutions is accelerating, supported
by demographic trends. We estimate the total
addressable market is worth $170 billion in New
Zealand and AU$660 billion in Australia.⁶ With
specialist offerings and market leadership,
Heartland Bank and Heartland Bank Australia
are uniquely positioned to support the
financial needs of older New Zealanders and
Australians. Read more about Heartland’s
Reverse Mortgage product and opportunity
on page 12.
Heartland is embarking on a new phase of
digital transformation. In FY2026, Heartland
Bank will commence implementation of a
single modern platform to unify origination
and servicing activity, fully integrating with
its upgraded core banking system. Heartland
Bank Australia will also implement a new
unified origination and servicing platform.
These investments are expected to drive
operational efficiency, improve customer and
intermediary experience, and position both
banks to meet customer demand at scale.
With ROE as Heartland’s key performance
metric, efficient use of capital is critical.
Heartland welcomes and will continue to
participate in the Reserve Bank of New
Zealand ’s (RBNZ's) review of key capital
settings, with a particular focus on capital
levels, asset risk-weights and the composition
of regulatory capital. Heartland sees this as a
critical pathway to support Heartland Bank’s
ability to remain competitive, reduce the cost
to the end customer, and deliver a significantly
improved ROE.
Long-term ambitions
The intentional and necessary resets in
Heartland’s business during FY2025 have
rebased the starting position assumed
when Heartland announced its ambitions
for the financial year ending 30 June 2028.
These resets have included a focus on ROE
as Heartland’s key performance metric,
refining the product strategy to prioritise
high-return core product sets which are
accretive to ROE, an increase in the cost base
primarily as a result of the ADI acquisition,
and enhancements in collections, recoveries
and write-off strategies to deliver sustainable
asset quality over the longer-term. We also
recognise the need for greater investment
in process simplification and automation
to maintain a competitive advantage and
achieve our growth ambitions in our core
product sets.
Heartland will present to investors its
updated long-term ambitions, reset to a
five-year horizon through to FY2030, at
an upcoming investor day. At that time,
Heartland will share detailed information on
the underlying approach, growth drivers and
timeframes to illustrate how we intend to
deliver to these reset long-term ambitions.
We currently expect that during the period
to FY2030, investors will see a significant
increase in underlying ROE and underlying
NPAT, driven by a continued focus on capital
efficiency, the retention of Australian profits
by Heartland Bank Australia to fund growth,
continued growth in core products with a bias
to growth in Reverse Mortgages, superior NIM
being maintained, enhanced asset quality,
and a reduced underlying cost-to-income
(CTI) ratio.
Thank you
Heartland’s history began 150 years ago
with the establishment of the Ashburton
Permanent Building & Investment
Society. The Heartland you see today is
the culmination of several mergers and
acquisitions of building societies, finance
companies and other businesses over many
years.
We wouldn’t be where we are today without
9
the shareholders who put their trust in
those companies, or the employees whose
dedication supported the many customers
who have relied on Heartland through each
chapter of its evolution.
On behalf of the Board, we would like to take
a moment to acknowledge the ongoing
support from our shareholders. Our thanks
also go to Heartland’s management teams
and employees for their commitment and
hard work, supporting our customers and our
vision for the future.
We look forward to entering the next chapter
of Heartland’s history with you.
Greg Tomlinson
Chair of the Board
Andrew Dixson
CEO
1 Includes the impact of changes in foreign currency exchange (FX) rates.
2 Compound annual growth rate (CAGR) for the five-year period from 1 July 2020 to 30 June 2025, including FX.
YEAR IN REVIEW
10
FY2025 results at a glance
Net profit after tax
$
38.8m
$
74.5m
95.1
FY23
47.5
47.6
47.1
49.0
95.9
FY24
48.7
47.2
54.7
55.5
74.5
38.8
102.7
46.9
110.2
96.1
87.9
37.6
36.9
52.7
50.0
35.2
3.6
10.7
36.2
FY21
87.0
FY22
44.1
42.9
43.3
44.6
Underlying NPAT $46.9mFY24 underlying NPAT $102.7m
FY25FY24
H2H2H1H1
ReportedUnderlying
$m
$b
Receivables¹
$
7. 1 6 b
$
7.24b
Five-year
CAGR
2
9.0%
FY21FY22
5.02
FY24
6.79
FY25
7.247.16
6.20
FY23
FY25FY24
FY25
11
Earnings per
share
9.8
cps
4.1
cps
Underlying EPS 5.0cps
Underlying EPS 13.5cps
FY24
FY25
Return on
equity
6.6
%
3.2
%
Underlying ROE 4.2%
Underlying ROE 9.8%
FY24
FY25
Net interest
margin
3.39
%
3.56
%
Underlying NIM 3.56%
Underlying NIM 3.64%
FY24
FY25
7.0
cps
4.0
cps
Total dividend for
the year
FY24
FY25
48.0
%
59.6
%
Underlying CTI ratio 56.2%
Underlying CTI ratio 41.9%
Cost-to-income
ratio
FY24
FY25
6.4
%
-1.2
%
Receivables
growth
1
FY24
FY25
YEAR IN REVIEW
12
The aging populations of New Zealand and Australia present a clear
and compelling market need. For many retirees, a lifetime of wealth
is locked up in their homes, leaving them without the means to live
a comfortable retirement.
Pictured: Heartland Bank Reverse Mortgage customers Dave and Delwyn enjoying their “perfect home”.
Finding the
financial freedom
to age in place
13
In Australia, it is projected that the number
of people over 65 years of age will make up
around 20% of the population by 2066, up from
16% at 30 June 2020.¹
This is reflected in New Zealand, where
it is forecast that the proportion of New
Zealanders over 65 years of age will increase
from 17% in 2024 to between 21-24% in 2051,
and between 25-33% in 2078.²
Reverse mortgages allow people over 60 years
of age to access some of the equity in their
homes as a loan, with no regular repayments
required.
For Heartland Bank Australia customer Errol,
who is 76 years of age, the unexpected
breakdown of his car left him searching for
a way to access funds. Living with prostate
cancer and Parkinson’s disease, the Victorian
grandfather uses his car to visit his family and
volunteer in his community.
Desperately seeking a car loan, he was
surprised to find that he and his wife, who are
both on a pension, were ineligible.
“There was no other way for
me. I tried multiple brokers and
they kept on telling me that
my pension was not enough to
cover a car loan, or extend my
mortgage,” he said.
An analysis by the Association of
Superannuation Funds Australia revealed a
retired couple living a comfortable lifestyle
needs to have saved a combined AU$690,000,
and AU$595,000 for a single person. In
Australia, a single person on an aged pension
receives AU$1,149 per fortnight, and couples
receive a combined payment of AU$1,732 per
fortnight.³
The ongoing demand for financial solutions in
retirement is reflected in Heartland’s FY2025
financial results, with a 15.5% increase in New
Zealand Reverse Mortgage Receivables (up
$165 million from 30 June 2024 to $1.23 billion
as at 30 June 2025) and a 18.5% increase in
Australian Reverse Mortgage Receivables (up
AU$309 million from 30 June 2024 to AU$1.98
billion as at 30 June 2025).
Errol met Palka Kumar, a reverse mortgage
consultant at Seniors First, who spoke to him
about the benefits of reverse mortgages. She
is one of more than 2,700 accredited brokers
who work with Heartland Bank Australia,
leveraging the bank’s intermediary distribution
partnerships for optimal reach.
Palka has worked with Heartland Bank
Australia for three years, helping to identify
customers looking to access the equity in their
homes through a reverse mortgage. Receiving
up to seven new appointments every week,
Palka said there are still many myths around
reverse mortgages.
“Reverse mortgages are a practical and
sensible option for older people who are
struggling with the rising cost of living. Many
retirees have a significant portion of their
wealth tied up in their homes, but limited cash
flow to cover day-to-day expenses, health
care or unexpected costs,” she said.
“The biggest challenge for older Australians
is that most traditional lenders do not cater
to their needs. Once income is reduced to
the pension or casual work, it becomes very
difficult to qualify for standard loans.”
Meeting the unique financial needs of those
aged over 60 years who are in or entering
retirement is a priority for Heartland, with
growth and innovation at the forefront of
this focus. As the leading reverse mortgage
provider in both countries, with an estimated
92% market share in New Zealand, and 40%
market share in Australia,⁴ Heartland estimates
the total addressable market to be $170 billion
in New Zealand and $600 billion in Australia⁵,
highlighting a significant untapped potential.
“My pension is not enough. With all the bills
I need to pay, and the rise of cost of living, I
needed this loan,” Errol said. “I have lots of
health bills to pay, despite being covered by
private health insurance, I’ve also had stents in
my heart for the past 10 years.”
Palka Kumar, a reverse
mortgage consultant
at Seniors First - an
accredited Heartland
Bank Australia broker.
1 Australian Institute of Health and Welfare 2024 Web Report: Older Australians Demographic profile, July 2024.
2 Stats New Zealand Tatauranga Aotearoa, ‘New Zealand’s population likely to reach 6 million before 2040’, June 2025.
3 Association of Superannuation Funds Australia, ‘Superannuation peak body: Retirement costs finally fall, just in time for Christmas’,
December 2024.
4 New Zealand Reverse Mortgage market share estimate based on Heartland Bank’s Reverse Mortgage lending and a combination of
publicly available information and internal sources. Australian Reverse Mortgage market share estimate based on APRA ADI data and public
statements and internal estimates for non-bank reverse mortgage lending.
5 The total addressable market opportunity for reverse mortgages is a best estimate only and based on a combination of publicly available
information and internal sources.
YEAR IN REVIEW
14
With a Reverse Mortgage from Heartland Bank
Australia, Errol has found the financial freedom
to age in place. Now, Errol plans to buy a new
car and renovate his house with the necessary
attachments to support his wife, who has had
both of her knees reconstructed.
“We don't want to go into a
nursing home. Now, because
of this reverse mortgage, we
can stay at home. It means the
world to us,” he said.
An Australian Housing and Urban Research
Institute study revealed 78-81% of Australians
over 55 want to live in their own home as they
age due to familiarity and connection to their
local communities.⁶
This sentiment is echoed across the Tasman in
New Zealand, where retired teachers Delwyn
(75 years of age) and Dave (76 years of age)
also faced the classic dilemma of aging in
place versus financial flexibility.
Living in what they describe as their “perfect
home”, the couple purchased their 11-acre
property in 2006 which includes eight acres of
native bush.
Like many retirees, they had significant equity
tied up in their home but needed a financial
solution that would provide peace of mind. The
pair, who considered downsizing or subdividing
their land due to a lack of savings, consulted
with a friend who encouraged them to explore
all options.
Delwyn decided to call Heartland Bank and
from the beginning felt confident.
Never once feeling any pressure to proceed,
she commended the clear communication
and knowledge shared with her about reverse
mortgages. As part of the application process,
Delwyn had to seek independent legal advice
and was encouraged to speak with family. She
then discussed the option with her husband
and family, who were all supportive.
According to a study by Massey University’s
Financial Education and Research Centre in
New Zealand, the cost of living is a significant
concern for retirees. For a two person ‘no frills’
household in a metropolitan area the total
weekly expenditure is $909.90.
A household which prioritises a more
comfortable lifestyle, in a metropolitan
area, can spend up to $1,739.85 per week
– significantly exceeding the New Zealand
Superannuation payment of $799.18 after tax
every fortnight.⁷
"We have known for some time that we would
need to make a decision about where we
would live for the next few years,” Delwyn said.
“Our life here is perfect for us and we dreaded
moving away. Since arranging our Reverse
Mortgage with Heartland Bank, we are relieved
and at peace knowing that we can stay.”
For Delwyn and Dave, a reverse mortgage was
about more than just a transaction; it was
about protecting their vision for retirement.
It gave them the ability to stay in their
cherished home while still affording the
freedom to pursue their passions: from a road
trip through New Zealand’s South Island, to a
trip across the Tasman to see their favourite
rugby league team play. This was all made
possible while ensuring their long-term
savings were kept safe.
"This decision to take out a reverse mortgage
has taken the pressure right off us and it is a
great feeling to know we can now do the things
we really want to do," she said.
To date, Heartland has enabled more than
52,500 Australians and New Zealanders to
live with greater financial freedom, turning
home equity into a valuable tool for a more
comfortable retirement.
With an aging population seeking solutions
to remain in their home and maintain their
independence as they age, there is a clear
opportunity for Heartland to support
more people through products like its
Reverse Mortgage.
6 Australian Housing and Urban Research Institute, ‘Older Australians and the housing aspirations gap’ final report, August 2019.
7 Te Kunenga ki Pūrehuroa Massey University of New Zealand Financial Education and Research (Fin-Ed) Centre. News release, January 2025.
"This decision to take out a reverse mortgage
has taken the pressure right off us and it is a
great feeling to know we can now do the
things we really want to do."
YEAR IN REVIEW
16
WHO WE ARE
16
The backbone of the New Zealand and Australian economies lies in
its thriving agricultural sectors. Yet, for many hardworking farmers,
traditional finance models don’t keep pace with the unique
demands of a business built on livestock and land. Heartland’s
specialist livestock finance solutions help farmers unlock their
potential and meet the rising global demand for their product.
Pictured: StockCo by Heartland Bank Australia customer Justin Costello at a sale he regularly attends with his team.
Enabling growth
for farmers
17
1 Ministry for Primary Industries Manatū Ahu Matua, Situation and outlook for primary industries report, June 2025.
2 Department of Agriculture, Fisheries and Forestry Snapshot of Australian Agriculture 2025.
In 2016, Mark Ferguson and his wife purchased
their 440-hectare farm which carries ewes,
traditional angus cattle and a timber mill.
Located in Havelock North in the Hawke’s
Bay region of New Zealand’s North Island, it
is characterised by mild climates and healthy
trade.
Dairy, meat and wool exports are the largest
contributors to New Zealand’s agricultural
exports – the value of New Zealand’s total food
and fibre exports in the year to June 2025 is
expected to have reached $59.9 billion, a 12%
increase on the previous year. Meat and wool
export revenue is expected to increase by
8% to $12.3 billion in the year to 30 June 2025.
With global beef and lamb supplies tightening,
forecasts indicate that New Zealand’s meat
and wool export earnings will continue to grow
by 3% to $12.7 billion in 2025–26.¹
This increasing demand in New Zealand has
been reflected in Heartland Bank’s Rural
lending performance. Rural Receivables were
up $29 million (4.9%) from 30 June 2024 to
$609 million as at 30 June 2025, driven by the
Livestock Finance portfolio where Receivables
were up $36.4 million (18.4%) from 30 June 2024
to $235 million as at 30 June 2025.
Mark, who shears his own sheep, was taught
to shear by his father and took up competitive
shearing – a passion he still holds onto today.
“When we started long-term financial
planning, other banks just weren’t interested
in lending for trading stock,” Mark said.
“While we had a couple of options, I heard
of the great reputation of Heartland Bank’s
Livestock Finance, so we called up.
“The interest rates are
competitive, and it was easy to
apply for a livestock facility. The
simplicity of Heartland Bank
is brilliant; this is the primary
reason we’ve stuck around for
s o l o n g.”
Heartland Bank’s Livestock Finance product
offers farmers a solution to accessing funds to
purchase livestock, without having to secure
the loan against the farm. The ease and speed
of the application process (which can be
completed online at any time), provides busy,
time-poor farmers a modern solution.
Describing himself as a considerate and
hardworking farmer, Mark thrives on being
solutions-oriented and hands on.
He and his team are busy every week at sales,
defining his relationship with Heartland Bank
Rural Manager John Pearce as complimentary.
“It’s the love of the land, that’s why I do what I
do, and you might as well be good at what you
do,” he said.
“I have a trusted team around me because no
one can do anything on their own. John is part
of that team - he actually understands the
numbers and is a person I can relate to.”
John, who has worked in the rural finance
sector for over 40 years is celebrated for his
open communication and farm visits.
“When I ring him, I trust the depth of his
experience. He is a successful banker who
has a comprehensive knowledge of livestock.
I believe him, I trust his background and this is
why I am good at what I do,” Mark said.
“Communication is huge and he’s only a phone
call away. This is a real point of difference.”
Across the Tasman, Australian farmer Justin
Costello believes the essence of rural
business lies in real people.
Heading Costello Rural for the past 22 years,
his family business sits on the foothills of New
South Wales’ idyllic Snowy Mountains. Located
in Tintaldra, his farm stretches across 1,250
acres of land along a river, and carries up to 150
heifers a year.
According to the Department of Agriculture,
Fisheries and Forestry, by June 2022, there
were 87,800 agricultural businesses in Australia
with an Estimated Value of Agricultural
Operations of AU$40,000 or greater.²
Fifty-five per cent of Australian land (426
million hectares) is used for agricultural
production. Across 2023-2024, 10.8% of
agricultural goods and services were exported,
which amounted to AU$71.5 billion. Beef,
veal, mutton and lamb make up a significant
proportion of these exports.²
YEAR IN REVIEW
18
Costello Rural is an independent, locally owned
livestock agency, real estate and agricultural
merchandising business in the Upper Murray.
This includes regular livestock sales and
events to educate and bring together local
farmers.
“Farmers are very proud people who are always
looking at how to add value to their business.
To firm up their long-term positioning and to
see growth in the rural industry,” he said.
Having a strong passion for conception to
consumption, Justin’s values have always been
his north star. From choosing bloodlines, to
pasture production or understanding market
potential, he is not afraid to speak up and be a
part of positive impact around him.
“To me, I see farming viability within the
context of a family business. To be viable and
valued. To achieve equity and identify the
special qualities the farmers we work with
have,” he said.
Justin’s first interaction with Heartland Bank
Australia’s livestock finance team, StockCo,
was sitting next to National Livestock Manager
Andrew Kearns at a conference.
“I didn’t know who he was,” he laughed. “But
six months later I gave him a call and said we
needed to talk.”
“The team at StockCo by Heartland Bank
Australia is all about real solutions that are
ready for farmers. It’s consumable to a farmer,
the farmer can understand the forms, we can
actually assist the farmer in getting the stock
ready so that they can be financed.”
“There are so many challenges with the rise in
costs, inflation and property prices. StockCo
by Heartland Bank Australia has been able
to slide in to fund our cattle, our solution, our
trading to actually make it work.”
Justin speaks regularly with his livestock and
finance managers, who take the time to visit
him on the farm, and knows the team is always
“a phone call away”.
“I see the future of Australia’s agricultural
sector getting stronger and stronger, and the
need for strategic finance is a major part of
that,” he said.
In 2025, Heartland’s Bank Australia’s Livestock
Finance celebrated the highest volume of
new business written since the financial year
ended 30 June 2022, with one million livestock
funded.
The gross value of Australian agricultural
production has increased by 34% in the past
20 years, from AU$61.5 billion in 2004–05 to
AU$82.4 billion in 2023–24, with livestock
emerging as the main growth driver amid
increasing international demand for protein.²
Looking to 2025-2026, the gross value of
agricultural production is expected to rise
by 1% to AU$94.7 billion with average farm
business profit to rise to AU$163,000, driven by
higher livestock prices and improved seasonal
conditions.²
“We are proud to enable our
community of farmers and
give so many people in the
community a step up. I'm
looking forward to working with
StockCo by Heartland Bank
Australia in the future to see
this evolution continue,”
Justin said.
As international demand for meat, wool,
and dairy from New Zealand and Australia
continues to rise, Heartland is uniquely
positioned to support farmers with their
specialist livestock finance needs.
Through Heartland Bank and StockCo by
Heartland Bank Australia’s Livestock Finance
products, farmers can focus on optimising
their operations and maximising the potential
of their livestock, focusing on sustainable
long-term success.
2 Department of Agriculture, Fisheries and Forestry Snapshot of Australian Agriculture 2025.
Havelock North farmer Mark Ferguson was drawn to Heartland
Bank due to the reputation of its Livestock Finance product.
02
Who we are
1 Includes all permanent, fixed term and casual employees of the Group as at 30 June 2025.
2 The Banking Group includes Heartland Bank and all of its subsidiaries, including Heartland Bank Australia and Marac Insurance.
WHO WE ARE
20
Our business
Our people
Male 49
.4%
Female 50
.3%
Gender diverse 0
.2%
Not stated 0
.2%
Locations
Employee break down by entity¹
Heartland Group Holdings Limited 20
Heartland Bank Limited 478
Heartland Bank Australia Limited 114
NZ Banking
$
4.36 bAU Banking
$
2.17 b
NZ Banking
$
0.16 bAU Banking
$
0.36b
NZ Banking
$
0.14 b
AU Banking
$
0.17 b
Our funding & capital
Total employee count¹
612
2
.6%
Customer %
i n c re a s e YoY
13 ,12 6
Shareholders
627
100
15.88%
NZ Banking
(NZ$m)
275
50
20.42%
AU Banking
(AU$m)
CET1
Tier 2
The Banking Group² is well capitalised and has strong access to retail deposits to fund future
growth expectations.
Retail deposits
Bonds and notes
Wholesale facilities
$
6.53 b
$
0.31 b
$
0.52 b
12
As at 30 June 2025.
2 All lending portfolio figures exclude FX impact.
3 Motor Finance includes Wholesale Lending.
4 Business Finance includes Asset Finance and Business Relationship.
5 Rural includes Rural Relationship, Rural Direct and Livestock Finance.
6 NSAs include Home Loans (including Online Home Loans and Heartland Bank’s old residential mortgages portfolio), and some Business and
Rural Receivables.
7 Unsecured Lending includes Open for Business and Personal Lending portfolios which are winding down.
8 Other AU includes Home Loans and Consumer & Other loan portfolios acquired through the ADI which are in run down.
21
NZ Banking
Total core$4.31b
Total non-core$395m
TOTAL$4.71b
Total
Receivables
$ 7.1 6 b
AU
NZ
Our lending²
NSAs⁶
$332m
Core Lending
$4.31b
Non-core
Lending
$395m
Motor
Finance³
$1.69b
Unsecured Lending⁷ $63m
Reverse Mortgages
$1.23b
Rural⁵
$609m
Business
Finance⁴
$779m
AU Banking
Total coreA$2.23b
Total non-coreA$31m
TOTALA$2.27b
Non-core Lending
A$31m
Other⁸ A$31m
Livestock Finance
A$254m
Core Lending
A$2.23b
Reverse Mortgages
A$1.98b
WHO WE ARE
22
Heartland Group Board
As at the date of this Annual Report. For full profiles, visit heartlandgroup.info
Greg Tomlinson
Chair and Non-Independent
Non-Executive Director
Appointed 31 October 2018
Committee memberships:
- Heartland Audit and Risk Committee
Kate Mitchell
Independent Non-Executive Director
Appointed 28 October 2021
Committee memberships:
- Heartland Sustainability Committee (Chair)
- Heartland Audit and Risk Committee
John Harvey
Independent Non-Executive Director
Appointed 30 April 2024
Committee memberships:
- Heartland Audit and Risk Committee (Chair)
Rob Bell
Independent Non-Executive Director
Appointed 27 June 2024
23
Simon Beckett
Independent Non-Executive Director
Appointed 27 June 2024
As at the date of this Annual Report. For full profiles, visit heartlandgroup.info
WHO WE ARE
24
Bruce Irvine
Chair and Independent Non-Executive Director
Appointed 31 December 2015
Committee memberships:
- Heartland Bank People & Culture and
Remuneration Committee (Chair)
- Heartland Bank Audit Committee
Andrew Dixson
Non-Independent Non-Executive Director
Appointed 1 October 2024
John Harvey
Non-Independent Non-Executive Director
Appointed 31 December 2015
Committee memberships:
- Heartland Bank Audit Committee
- Heartland Bank Risk Committee
Kate Mitchell
Non-Independent Non-Executive Director
Appointed 29 March 2019
Committee memberships:
- Heartland Bank People & Culture and
Remuneration Committee
- Heartland Bank Risk Committee
Heartland Bank New Zealand Board
25
Shelley Ruha
Independent Non-Executive Director
Appointed 1 January 2020
Committee memberships:
- Heartland Bank Risk Committee (Chair)
- Heartland Bank Audit Committee
Simon Tyler
Independent Non-Executive Director
Appointed 8 November 2022
Committee memberships:
- Heartland Bank Audit Committee (Chair)
- Heartland Bank People & Culture and
Remuneration Committee
- Heartland Bank Risk Committee
- Heartland Sustainability Committee
1 Lyn McGrath was an Independent Non-Executive Director on the Challenger Bank Limited Board prior to the completion of its acquisition by
Heartland Bank on 30 April 2024.
As at the date of this Annual Report. For full profiles, visit heartlandgroup.info
WHO WE ARE
26
Heartland Bank Australia Board
Geoff Summerhayes
Chair and Independent Non-Executive Director
Appointed 30 April 2024
Committee memberships:
- Heartland Bank Australia Audit Committee
- Heartland Bank Australia People, Remuneration and
Nominations Committee
- Heartland Bank Australia Risk Committee
- Heartland Sustainability Committee
Shane Buggle
Independent Non-Executive Director
Appointed 30 April 2024
Committee memberships:
- Heartland Bank Australia Audit Committee (Chair)
- Heartland Bank Australia People, Remuneration
and Nominations Committee
- Heartland Bank Australia Risk Committee
Ly n McGrath
Independent Non-Executive Director
Appointed 14 February 2022¹
Committee memberships:
- Heartland Bank Australia Risk Committee (Chair)
- Heartland Bank Australia Audit Committee
- Heartland Bank Australia People, Remuneration
and Nominations Committee
Vivienne Yu
Independent Non-Executive Director
Appointed 30 April 2024
Committee memberships:
- Heartland Bank Australia People,
Remuneration and Nominations Committee
(Ch air)
- Heartland Bank Australia Audit Committee
- Heartland Bank Australia Risk Committee
27
Bruce Irvine
Independent Non-Executive Director
Appointed 30 April 2024
Committee memberships:
- Heartland Bank Australia Audit Committee
- Heartland Bank Australia People,
Remuneration and Nominations Committee
- Heartland Bank Australia Risk Committee
Leanne Lazarus
Non-Independent Non-Executive Director
Appointed 30 April 2024
Andrew Dixson
Non-Independent Non-Executive Director
Appointed 3 February 2025
WHO WE ARE
28
Management
Heartland Group
Heartland Bank New Zealand
Andrew Dixson
Chief Executive Officer
Michael Jonas
Chief Strategy Officer
Leanne Lazarus
Chief Executive Officer
Michael Drumm
Chief Operating Officer
Andy Wood
Chief Risk Officer
Lana West
Chief People &
Culture Officer
Kerry Conway
Chief Financial Officer
Peter Griffin
Chief Asset Management
Officer
Phoebe Gibbons
Chief Legal Officer
Alistair Scott²
Chief Auto & Asset
Finance Officer
Rebecca Thomas¹
Chief Digital
Transformation Officer
Will White
General Manager -
Retail & Reverse Mortgages
1 Rebecca Thomas joined Heartland Bank as Chief Digital Transformation Officer on 15 September 2025.
2 Alistair Scott joined Heartland Bank as Chief Auto & Asset Finance Officer on 8 September 2025.
As at the date of this Annual Report. For full profiles, visit heartlandgroup.info
29
Heartland Bank Australia
Michelle Winzer
Chief Executive Officer
Medina Cicak
Chief Commercial Officer
David Brown
Chief Risk Officer
Richard Collier
Chief Financial Officer
Sarah Burgemeister
General Counsel
Vaughan Dixon
Chief Technology &
Information Officer
03
Sustainability
31
Through its sustainability
strategy, Heartland is
committed to sustainable
practices that not only
minimise its environmental
footprint, but also make
positive contributions to
its communities and enrich
the lives of its people and
customers.
Environment
Support the just
transition to a net-zero
economy.
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.
SUSTAINABILITY
32
Heartland’s environmental sustainability strategy is underpinned by
three key pillars. Together, these help Heartland fulfil its commitment
to supporting the just transition to a net-zero economy.
1. Integrate climate risk into lending decisions.
2. Fund Heartland’s borrowers’ transition to a net-zero economy.
3. Embed sustainability into what Heartland does.
In FY2025, Heartland continued to strengthen its capability to assess and manage climate-
related risks by incorporating climate considerations into credit risk and lending practices for its
larger customers. It also continued to support its customers by funding low-emission vehicles
through Heartland Bank’s Motor Finance portfolio. Heartland remains focused on reducing its
own emissions, having set new science-aligned targets to further lower its operational footprint
by FY2030.
Heartland’s FY2025 Climate Report provides a comprehensive view of Heartland’s environmental
progress to date, including key achievements, current challenges, and future targets. It also
features scenario analysis that explores the potential impacts of climate-related risks and
opportunities facing Heartland under different climate futures, as well as its transition plan
which details how its business model might adapt to a changing climate. This analysis supports
Heartland’s long-term planning and resilience in an evolving regulatory and environmental
landscape.
To explore the full report, visit heartlandgroup.info/sustainability
Environment
33
HOW: To be a workplace where Māori can succeed as Māori and create a pathway to being an
employer that is welcoming to all cultures and ethnicities.
FY2025 TARGET FY2025 PROGRESS
Extend community
engagement for
Heartland’s Manawa
Ako internship
programme.
Heartland Bank held its annual Manawa Ako internship programme,
receiving 155 applications in FY2025. Heartland Bank welcomed 29
interns in FY2025, with 169 rangatahi (youth) participating in the
programme since 2017.
These talented students came from universities and schools across
New Zealand – from InZone Education Foundation (InZone), M a n u r e w a
High School, Otago University, King’s College and Ngā Puna o Waiōrea.
Support Māori
and Pasifika
representation in
the banking industry.
Heartland Bank maintained active membership in the New Zealand
Banking Association (NZBA) Tawhia (Māori Bankers Association)
committee and a strong partnership with InZone, which remains
closely involved in Heartland’s Manawa Ako internship programme.
Through this collaboration, 11 InZone students joined the FY2025
Manawa Ako cohort.
At Manawa Ako’s conclusion in January 2025, four interns continued at
Heartland Bank in short term, part-time roles. One intern transitioned
into a permanent full-time position.
FY2026 target
• Heartland Bank will continue to provide career opportunities for youth, with a focus on
attracting Māori and Pasifika into the banking industry.
Heartland's commitment:
Create a pathway and place for Heartland’s people to grow, thrive and be
empowered to achieve Heartland’s goals as one team.
People
SUSTAINABILITY
34
HOW: Establish Heartland as a recognisable and desirable employer of choice to attract,
develop and enable exceptional talent.
FY2025 TARGET FY2025 PROGRESS
Launch an annual
employee culture
and engagement
survey across all of
Heartland.
An all-Heartland culture survey was conducted in April 2025, covering
all full-time employees across Heartland’s operations in Australia
and New Zealand, reinforcing Heartland’s commitment to ongoing
employee engagement, and creating a baseline from which to measure
improvements. This survey will continue annually.
Other achievements in FY2025
Multiethnic Young Leaders – 3 Kapu Kawhe
In 2024, Heartland Bank became a Corporate Impact Investor for Multiethnic Young Leaders NZ
(MYLN), a network empowering Māori, Asian, Pacific and ethnic minority youth leaders. 3 Kapu
Kawhe connected 16 CEOs and independent directors with young leaders from high schools
and early careers across New Zealand. In turn, these mentees took on the role of mentor
themselves, as they paid it forward to another student or rangatahi.
Three Heartland Bank employees took part in the programme
and were matched with experienced New Zealand executives
for a series of transformative mentoring conversations.
Heartland Bank’s mentees described the experience as
invaluable, gaining insights on leadership, communication
and strategic thinking.
Heartland Bank Strategy Analyst, Tahirih Latu had the
privilege of being mentored by Jo Avenell, CEO of Russell
McVeagh. Tahirih described her conversations with mentor Jo
as inspiring.
“ Her insights on embracing failure, authentic communication, and building self-confidence
resonated deeply with me. I’m excited to apply these lessons and continue building our
connection. Meeting with my student mentee has been equally rewarding. Initially eager to
offer guidance, I quickly realised that the learning goes both ways. Through our discussions,
I’ve come to value active listening, understanding different perspectives, and offering
support. My mentee’s resilience has reinforced the value of mentorship, showing me that
both mentor and mentee grow together.”
FY2026 target
• Heartland aims to increase its employee engagement results from the FY2025 engagement
scores of 51% for both Heartland Bank and Heartland Bank Australia.
35
HOW: Create an inclusive, engaging environment for employees where gender balance
and diverse ethnic representation is achieved at all levels for the organisation, leading to
exceptional experiences for Heartland’s people and customers.
FY2025 TARGET FY2025 PROGRESS
Reduce pay gaps
Heartland is
dedicated to
advancing its efforts
in reducing gender
and ethnicity pay
gaps.
Heartland is a member of Mind the Gap, a national registry for New
Zealand companies to publicly report their pay gaps between different
genders and ethnicities. The measurement used identifies the median
for each group to compare and identify the pay gap.
This is part of Heartland’s commitment to reducing gender and
ethnicity pay gaps. While Heartland’s New Zealand pay gaps have
increased at the overall level, all remuneration across like roles is
reviewed to ensure equity and is also based on performance.
• Gap between median pay of men and women across all NZ roles:
27% (increased by 5.1% since 30 June 2024).
• Gap between median pay of non-Māori and Māori across all NZ roles:
28% (increased by 4.4% since 30 June 2024).
• Gap between median pay of non-Pasifika and Pasifika across all NZ
roles: 18% (increased by 0.9% since 30 June 2024).
Achieve gender
balance
at all levels at
Heartland.
Heartland remains committed to achieving gender balance at all levels
of the organisation. The journey toward lasting change takes time, and
Heartland is focused on continuous improvement.
In FY2025, the Heartland Bank Board maintained 33% female
representation, unchanged from FY2024. While the Heartland Group
Board includes one female member (20%), the Heartland Bank
Australia Board has 43% female representation.
Refer to the table on page 36 for the gender diversity of directors and
employees of Heartland in New Zealand and Australia.
Retain Diversity
& Inclusion
accreditations in
New Zealand.
Heartland Bank is proud to have retained its accreditations for another
year in the diversity and inclusion space in New Zealand – including
as a Living Wage Employer, receiving the Rainbow Tick, and achieving
Hearing Accreditation from the National Foundation for the Deaf and
Hard of Hearing.
Achieve Bronze
Status in the
Australian
Workplace Equality
Index.
In June 2025, Heartland Bank Australia achieved Bronze Status in
the Australian Workplace Equality Index at the Australian LGBTQIA+
Inclusion Awards. This was awarded to Heartland Bank Australia for
meeting national standards for LGBTQIA+ inclusion and creating a
diverse, equitable, and respectful workplace for all.
Other achievements in FY2025
• Heartland Bank Australia completed its first Workplace Gender Equality Agency (WGEA)
submission, in the WGEA 2024-2025 reporting period, reaffirming its commitment to gender
equality through transparent reporting and targeted initiatives.
1 Management represents the Group’s Officers for the purposes of the NZX Listing Rules.
SUSTAINABILITY
36
Gender diversity
PositionsFemaleMaleGender diverseNot statedTotal
As at 30 June 2025
Board - Heartland1 (20%) 4 (80%) 0 0 5
Board – Heartland Bank 2 (33%) 4 (67%) 0 0 6
Board – Heartland Bank Australia 3 (43%) 4 (57%) 0 0 6
Management¹8 (44%) 10 (56%) 0 0 18
All People Leaders (excl Management)46 (41%) 66 (59%) 0 0 112
All staff (excl Board) 308 (50%)302 (49%)1 (0.2%)1 (0.2%)612
As at 30 June 2024
Board - Heartland1 (17%)5 (83%)006
Board - Heartland Bank2 (33%)4 (67%)006
Board - Heartland Bank Australia3 (43%)4 (57%)007
Management
¹
7 (37%)12 (63%)0019
All People Leaders (excl Management)45 (46%)52 (54%)0097
All staff (excl Board)311 (51%)302 (49%)00613
FY2026 targets
• Heartland will work towards the gender balance guidance for all levels of management at
Heartland by having a gender split that sits within acceptable levels of 40%
to 60%.
• Heartland will retain its diversity and inclusion accreditations and continue to evolve to meet
future needs and ways of working.
37
HOW: Heartland gives back to the community through grants, sponsorships and
active volunteering.
FY2025 TARGET FY2025 PROGRESS
Give back to the
community through
the Heartland
Trust, a registered
charitable trust that is
independent from but
closely supported by
Heartland.
Heartland is proud to have continued its support in the community
with Heartland Trust grants totalling $466,000 in FY2025. This
investment was spread across a range of high-impact initiatives in the
areas of education, sport and physical wellbeing, arts and culture, and
mental health and wellbeing.
While total grants donated were lower than previous years, the quality
of the initiatives supported has ensured a meaningful and lasting
impact in the community.
Central to Heartland’s philanthropic efforts are the individuals and
communities benefiting from this support. Read more below and on
the following pages about some of the projects and scholarships
Heartland is delighted to be involved with.
King’s College Scholar – Manaariki Kea-Cameron
Year 10 student Manaariki Kea-Cameron from Whangārei, Northland
New Zealand, is the recipient of a five-year Heartland Bank scholarship,
granted by the Heartland Trust. The scholarship supports one student
enrolling in year 9 to attend King’s College in Auckland for the duration
of their high school years. Reflecting on his time at King’s College so
far, Manaariki shares his learnings and goals for the future.
Heartland's commitment:
Heartland cares for its communities.
Student spotlight:
A scholarship opening doors
When asked what inspired him to apply to King’s College,
Manaariki shared, “King’s College is held in high regard across the
country, both academically and in sport. From a young age, I’ve
had clear goals and aspirations – not to become a statistic, but to
thrive and excel in both sport and education.” He explained how
important it was to find a school that supported both passions.
“My mum has always told me that while I could be great at sport,
achieving a quality education was just as important.”
The scholarship has been life-changing for him and his whānau. “It means everything. There
aren’t enough words to describe how much this opportunity means to me and my whānau,”
Manaariki said. He acknowledges how rare this chance is for kids from Northland and how it
motivates him to make his family proud.
Manaariki’s experience at King’s College has exceeded expectations. “I’ve learned how
connected all the subjects are and how much they relate to real life,” he said, highlighting the
supportive environment, especially from teachers who have helped him transition smoothly
into high school.
Through rugby and house sports, Manaariki has developed leadership and problem-solving
skills, learning to lead with resilience. Looking ahead, he aspires to “become a professional
athlete” or start a business related to sport, aiming to make his whānau proud and give back
to his community.
SUSTAINABILITY
38
Honouring a legacy and empowering futures:
The Geoff Ricketts Heartland Bank Scholarship
In memory of the late Geoff Ricketts, a founding director of Heartland and a long-serving
Chair of the University of Auckland Foundation, Heartland is proud to support the Geoff
Ricketts Heartland Bank Scholarship, a lasting tribute to his vision and commitment to
education, equity and community.
Launched in partnership with Waipapa Taumata Rau, University of Auckland, the
scholarship aims to remove financial barriers for students who might not otherwise be
able to pursue higher education. Awarded every three years to up to four New Zealand
Citizens or Permanent Residents experiencing financial hardship, the scholarship supports
students entering their first year of an undergraduate degree in Business and Economics,
Law, or Medical and Health Sciences. Each recipient receives up to $10,000 per year, for up
to three years, to assist with tuition or living costs.
Applications for the scholarship opened in August 2024, with the University Foundation
recording an unprecedented number of applications for a first-year scholarship. The
successful applicants were selected in December 2024. Congratulations to the inaugural
scholars:
• Emi O’Connor, Bachelor of Commerce
• Sophia Skinner, Bachelor of Commerce
• Ray Wang, Bachelor of Biomedical Science
• Isla Mujeeb, Bachelor of Biomedical Science.
The launch of the scholarship was celebrated with a small function hosted by the University
of Auckland, bringing together Heartland representatives, university employees, and the
scholarship recipients to honour Geoff’s legacy and the bright futures now within reach
because of this initiative.
39
Tātai Whetū Waitaha
Heartland Bank is proud to give back to the Mid Canterbury (Waitaha)
community by supporting the development of emerging leaders
through sport and physical wellbeing. For the past three years,
Heartland Bank has sponsored Tātai Whetū Waitaha through a grant
provided by the Heartland Trust. This programme uses sport as a
foundation to foster personal growth and wellbeing, connecting
athletes with world-class experts in health and holistic support across
Waitaha.
Reo, a proud karate-ka, is a driven young athlete who has spent the
past year growing through the Tātai Whetū Waitaha programme. Read
more on page 40.
Increase volunteer
day participation.
Recognising the positive impact that volunteering has on building
employee wellbeing and a sense of connection, Heartland offers one
paid volunteer day per year to each employee. Pleasingly, the use of
volunteer days has seen a 76% increase over the last three years.
Heartland employees have been out and about in the community,
giving back to initiatives they are passionate about and making a
positive contribution to the world around them.
From desks to dirt: Volunteering at Matuku Link Reserve
In April 2025, members of Heartland’s Green Team and other Auckland-
based employees headed to the Waitakere River Valley for a day of
volunteering at the Matuku Link Reserve. A conservation project
named after the endangered Matuku-hūrepo (Australasian bittern)
which needs wetland to survive, Matuku Link aims to restore and
protect wetland habitat in West Auckland. Heartland volunteers spent
the day with conservationists from the reserve, weeding large vines
from the ground, bushes and trees that strangle native plants and stop
them from growing.
It was a fulfilling day spent in nature, where Heartland volunteers
from across the business came together to connect, collaborate and
contribute to the local environment - leaving with a strong sense of
pride and accomplishment in giving back to the community.
SUSTAINABILITY
40
FY2026 targets
• Continue to give back to the communities Heartland Bank operates in through Heartland Trust
donations.
• Increase the use of volunteer days which support Heartland’s customers and the communities
that it operates within – both in New Zealand and Australia.
Building strength on and off the mat
Reo is a dedicated karate-ka from Christchurch and has experienced significant growth
over the past year through the Tātai Whetū Waitaha programme.
When Reo first joined Tātai Whetū Waitaha, he was under immense pressure. Balancing
intense training loads with difficult weight cuts and struggling to gain momentum in senior
competitions, he was close to burnout. “That first session with Programme Lead, Ged, was
a turning point,” Reo reflects. “It helped me understand my values, what I need to perform
well, and what I’d been missing.”
Since then, Reo has tapped into the programme’s full support network, including mental
skills coaching, nutrition advice, strength training and personal development. Working
with a mental wellbeing coach has been particularly transformative. “He’s helped me reset
how I prepare mentally before competitions. Now I can recognise when I’m in the zone,
stay focused, and read what’s happening around me during a match. That awareness has
changed the way I compete.”
Nutrition guidance has also been vital for Reo, who competes in a weight-class sport. The
programme’s nutritionist helped him develop a balanced and strategic approach to weight
management, keeping him healthy and energised without sacrificing performance.
When asked what stands out most about being part of Tātai Whetū Waitaha, he said, “the
South Island can feel isolating when you’re trying to make it in sport. Tātai Whetū Waitaha
made me realise that I’m not alone, and that with the right support, anything is possible”.
2 Announced July 2025.
41
HOW : Heartland provides competitive and flexible products that aim to improve the lives
of its customers.
FY2025 TARGET FY2025 PROGRESS
Continue to be
recognised for
exceptional value
and innovation
through maintaining
its streak of Canstar
NZ recognition
Savings Bank of the Year
Heartland Bank has been awarded Canstar New Zealand’s Savings
Bank of the Year for eight consecutive years.² The Canstar Bank of
the Year – Savings Award is awarded to the institution that provides
the strongest combination of products, accounting for the price
positioning, features, savings tools and flexibility of the products
assessed within Canstar’s rating profiles, as well as supporting savers
through a competitive Term Deposit offering.
Four of Heartland’s savings accounts were also awarded Canstar
Outstanding Value awards, each with a 5-Star Rating:
• Direct Call Account:
Outstanding Value Savings Account, 2018 – 2025
• 90 Day Notice Saver:
Outstanding Value Savings Account, 2023 – 2025
• 32 Day Notice Saver:
Outstanding Value Savings Account, 2022 – 2025
• Digital Saver:
Outstanding Value Savings Account, 2025.
Recognition in the
Australian market for
its Reverse Mortgage
product.
Heartland Bank Australia has demonstrated its commitment to gaining
industry recognition and contributing meaningfully to sector-wide
progress through its active membership in the Seniors Equity Release
Industry Forum (SERIF), led by the Finance Brokers Association of
Australia.
SERIF is a collaborative initiative aimed at enhancing awareness and
understanding of reverse mortgage products across the broader
financial services ecosystem, including brokers, government bodies,
and policy makers.
In November 2024, Heartland Bank Australia proudly hosted the
annual in-person SERIF event in Melbourne, bringing together key
stakeholders to share insights and drive thought leadership. Heartland
Bank Australia’s involvement in SERIF demonstrates its commitment
to shaping the future of equity release products and advocating for
responsible lending practices for older Australians.
FY2025 other achievements
• Launched Village Access Loans, a new product designed to offer older New Zealanders a
solution to some of the barriers associated with moving into retirement living.
FY2026 target
• Heartland Bank aims to provide exceptional value and innovative banking solutions to its
customers, and will aim to maintain its consistent recognition by Canstar NZ.
Heartland's commitment:
Heartland cares for its customers.
SUSTAINABILITY
42
HOW: Ensure customers can benefit from Heartland’s digitalisation journey through enhanced
economic outcomes.
FY2025 TARGET FY2025 PROGRESS
Support Motor Finance
borrowers to self-manage
their loan repayments and
avoid arrears through in-
app functionality.
Heartland Bank successfully implemented new ‘manage loan’
app functionality in October 2024. This feature provides overdue
Motor Finance customers the flexibility to self-manage their
loan repayments digitally via the Heartland Mobile App. Since
implementation, over 5,300 customers have self-managed their
way out of arrears amounting to almost $2.4 million repaid via the
Heartland Mobile App.
Release further features
to the Heartland Mobile
App.
Update loan repayment date and frequency
Heartland Bank released a feature within the Heartland Mobile
App enabling Motor Finance customers to update their direct
debit or direct credit date and frequency.
Successfully implemented Confirmation of Payee (CoP)
The Confirmation of Payee initiative led by the NZBA went live
in November 2024. CoP aims to enhance the security of online
banking transactions by verifying the payee’s account details
before completing a payment.
Other updates
Other updates to the Heartland Mobile App included allowing
users to select their preferred method of contact with Heartland
Bank. Almost half (46%) of accounts have been set to receive
communications via online channels, reducing Heartland Bank’s
requirement to print and post letters.
Introduce a solution to
provide fraud detection
for customers interacting
with Heartland Bank in New
Zealand.
Heartland Bank has implemented a fraud detection and
mitigation system, with coverage being progressively extended.
A progressive approach is being taken to manage appropriate
customer experience and support integration with Heartland
Bank’s broader fraud and scam mitigation programme of work,
ensuring alignment with industry standards and commitments.
Financial wellbeing
Heartland's commitment:
Support the financial wellbeing of Heartland’s customers and communities.
43
FY2026 targets
• Continue the roll out of fraud prevention improvements at Heartland Bank, including fraud
detection, monitoring and management capabilities to protect Heartland Bank’s customers
against unauthorised dealings when interacting with the bank’s ecosystem.
• Ensure older New Zealanders have financial certainty for retirement village entry, while
supporting their ability to remain in their own homes until they choose to transition -
promoting financial wellbeing, autonomy and housing flexibility.
HOW: Ensure Heartland’s values and commitments are shared by its suppliers.
FY2025 TARGET FY2025 PROGRESS
Heartland will analyse
survey data from key New
Zealand landlords and major
suppliers to gain insights
into their emissions and
reduction targets, aiming
to align sustainability
practices across the Group.
Heartland Bank made progress in assessing the sustainability
commitments of its key suppliers. Of the 25 suppliers assessed
in 2025, 60% are measuring their emissions and have emission
reduction targets, and 32% have transition plans, or have taken
initial steps toward developing a transition plan to support a low-
emissions economy.
Of those who were not measuring their emissions, 70% had
sustainability policies or initiatives in place to reduce their
impact on the environment. This analysis and engagement will
continue as part of Heartland’s supplier engagement to better
align Heartland’s key sustainability practices with its suppliers.
04
Disclosures
45
This corporate governance
statement describes Heartland’s
corporate governance policies
and practices as at 30 June 2025
and has been approved by the
Board.
Heartland has reported against the NZX
Corporate Governance Code (NZX Code)
dated January 2025.
Heartland, as the parent company of the
Group, is committed to ensuring that
Heartland’s policies and practices reflect
current best practice, in the interests
of Heartland’s shareholders and other
stakeholders.
In addition to information about Heartland’s
corporate governance policies and practices,
this section includes information about
Heartland Bank and Heartland Bank Australia’s
corporate governance policies and practices,
where relevant.
Heartland Bank and Heartland Bank Australia
each have their own Board and Board
Committees and make independent decisions
(including on corporate governance matters).
The Heartland Entities Oversight Governance
Framework (Oversight Framework), which
has been adopted by the Heartland and
Heartland Bank Boards, balances the
importance of strong governance by the
respective boards of directors of Heartland
Bank and Heartland Bank Australia to ensure
the prudent management of their own
business and risks, alongside the need for
Group-wide oversight of all material risks.
Heartland, Heartland Bank and Heartland Bank
Australia Board and Committee meetings are
held separately. In the case of Heartland and
Heartland Bank, only the respective Chairs
are attendees at both meetings, although
other directors may observe on occasion. The
Chair of Heartland Bank and the respective
CEOs of Heartland and Heartland Bank are
also directors of Heartland Bank Australia.
Heartland’s key corporate governance policies
and practices either apply to, or have been
adopted by, Heartland Bank and Heartland
Bank Australia (as applicable).
Other than in respect of the matter explained
in response to Recommendations 2.9, 3.3 and
3.4 below, Heartland was in compliance with
the corporate governance recommendations
contained in the NZX Code as at 30 June 2025.
Principle 1 – Ethical Standards
Directors should set high standards of
ethical behaviour, model this behaviour and
hold management accountable for these
standards being followed throughout the
organisation.
Codes of Conduct – Recommendation 1.1
Heartland, Heartland Bank and Heartland
Bank Australia each have separate Codes
of Conduct and the same Directors’ Code
of Conduct. These Codes of Conduct set
out the ethical and behavioural standards
expected of Group directors, employees
and intermediaries and are available on
Heartland’s website, heartlandgroup.info.
The Codes of Conduct cover a wide range of
areas, including:
• Heartland’s responsibilities towards
shareholders and the financial community,
its customers, clients and service
providers, and its employees
• conflicts of interest, including the receipt
of gifts and other corporate opportunities
• confidentiality
• the recommended procedure for advising
the relevant Heartland entity of a
suspected breach in accordance with that
entity’s Whistleblowing Policy.
Suspected breaches of a Code of Conduct
may be reported in accordance with the
relevant Heartland entity’s Whistleblowing
Policy or directly to Heartland’s management.
Whistleblower cases are addressed
in accordance with the applicable
Whistleblowing Policy. Suspected breaches
Corporate governance
DISCLOSURES
46
reported directly to Heartland’s management
are addressed in accordance with Heartland’s
disciplinary process as appropriate.
Every new director or employee is provided
with a copy of the relevant Code of Conduct
and is required to read it. Each new Heartland
and Heartland Bank employee is required to
attest to their understanding of the relevant
Code and each new Heartland Bank Australia
employee is provided with training on the
relevant Code as part of their induction.
Heartland and Heartland Bank employees are
trained on the Code of Conduct annually and
required to review and repeat their attestation
to their understanding of it. Heartland Bank
Australia is developing annual Code training
for deployment by the end of the calendar
y e a r.
Each director and employee has an obligation,
at all times, to comply with the spirit as well as
the letter of the law, and to comply with the
principles of the relevant Code of Conduct,
including exhibiting a high standard of ethical
behaviour. Each Code of Conduct is subject
to annual review. Various Heartland policies,
frameworks and standards expand upon the
topics in the Codes of Conduct, for example,
Whistleblowing Policies, Gift and Hospitality
Policy and Heartland Bank’s Fair Conduct
Programme.
Heartland, Heartland Bank and Heartland Bank
Australia provide all employees with access
to independent and external whistleblowing
hotlines.
Insider Trading Policy –
Recommendation 1.2
Heartland has an Insider Trading Policy
which applies to all directors, employees
and contractors of the Group. In addition to
the prohibition on insider trading, directors,
employees and contractors are prohibited
from buying or selling the Group’s quoted
financial products during ‘blackout periods’
– which are periods that commence 30 days
prior to the half-year and full-year balance
dates and 30 days prior to the release of a
product disclosure statement, prospectus
and/or investment statement for a general
public offer of any quoted financial products.
These blackout periods generally end,
respectively, once the financial results from
the half-year or the full-year or disclosure
document has been released to the market.
Additional blackout periods may also be
notified from time to time.
All of the Group’s directors, senior officers and
certain other designated persons are required
to obtain consent before buying or selling the
Group’s quoted financial products outside
of blackout periods, and to certify that their
decision to buy or sell has not been made on
the basis of inside information.
The Board continually assesses, with the
assistance of the Boards of Heartland Bank
and Heartland Bank Australia, whether any
matters under consideration are likely to
materially influence Heartland’s share price
and therefore whether additional trading
restrictions should be imposed on directors,
employees and contractors.
The Insider Trading Policy is available on
Heartland’s website, heartlandgroup.info.
Through its share registrar, MUFG Pension &
Market Services, Heartland actively monitors
trading in Heartland shares by directors,
officers and certain other designated persons.
Principle 2 – Board Composition
and Performance
To ensure an effective board, there should be
a balance of independence, skills, knowledge,
experience and perspectives.
Role of the Board – Recommendation 2.1
The Board is responsible for setting the
Group’s overall strategic direction and risk
appetite, having Group-wide oversight of
all material risks. The role of the Board is to
provide leadership and strategic guidance for
Heartland, effective oversight of Heartland’s
management and effective oversight of
Heartland Bank and Heartland Bank Australia.
The Board Charter regulates Board procedure
and describes in detail the Board’s role and
responsibilities and the role of management.
The Board Charter is available on Heartland’s
website, heartlandgroup.info. The Board
establishes objectives, strategies and
an overall policy framework in respect of
those matters applicable at a Group-wide
1 With effect from 1 July 2024, the Heartland Corporate Governance, People, Remuneration and Nominations Committee was disestablished.
See Recommendations 3.3 and 3.4 for more information.
47
level within which the Group’s business is
conducted.
The Board schedules regular meetings at
which it receives briefings on key strategic
and operational issues from management,
together with updates from the Chairs of the
respective Board Committees, the Chair of the
Heartland Bank Board and the New Zealand
directors on the Heartland Bank Australia
Board.
Director appointment – Recommendations
2.2 and 2.3
Heartland has a procedure for the nomination
and appointment of directors to the Board, as
documented in Heartland’s Constitution and
Board Charter. Directors may be appointed
in accordance with Heartland’s Constitution
or pursuant to formal written letters of
appointment. Letters of appointment set out
the key terms and conditions of a director’s
appointment to ensure that directors clearly
understand the expectations of Heartland
and the Board. Directors are entitled to
appoint and remove alternate directors with
the approval of the majority of the other
directors. The Board may appoint a managing
director.
Each new director of Heartland is required,
pursuant to the Heartland Board Charter, to
enter into a written agreement with Heartland
in respect of his or her appointment. Heartland
has a pro forma director appointment letter
which is tailored for individual appointments.
During FY2025, the Heartland Board¹ was
tasked with the role of reviewing Heartland’s
Board composition, and reviewing and making
recommendations in relation to nominations,
for the Board’s consideration (noting, no new
directors were appointed to the Board during
FY2025).
Heartland is committed to maintaining a
diverse and comprehensive set of skills to
effectively govern each of the entities in the
Group. The Group Boards have developed
a skills matrix to assess current director
competencies, identify gaps, and guide
future director appointments to align with
the Group’s strategic needs and evolving
commercial environment.
• Board composition: The Boards intend to
use the skills matrix to support the regular
review of their respective collective skills
and experience and help address any gaps
through appointments and development
and succession planning. This ensures
alignment with Heartland’s business
requirements and commercial trends.
• Diverse expertise supports governance:
Directors bring a wide range of expertise
including governance, executive
leadership, finance, legal compliance, risk
management, technology, sustainability,
and sector-specific knowledge, enabling
effective oversight of strategy, risk, and
stakeholder relationships.
• Continuous development focus: The
Group Boards intend to use the skills matrix
to support the identification of focus areas
for director education and may engage
external experts to supplement internal
skills.
The skills matrix on the following page
presents each respective Boards’ assessment
of their skills and experience against criteria
identified as necessary in the context
of Heartland’s business and the wider
commercial environment in which it operates.
Beyond the variety of technical skills and
experience listed below, each Board seeks
to work as a team comprising directors with
different personalities and viewpoints, who
will respectfully challenge Management and
each other to support the long-term success
of both the entity they govern and the Group.
DISCLOSURES
48
Director skills matrix
Skills and ExperienceDescription
No. of DirectorsNo. of DirectorsNo. of Directors
HeartlandHeartland BankHeartland Bank Australia
Risk ManagementRisk management frameworks, setting risk appetite, building and adapting organisation risk culture
23141 151
Governance and
Compliance
Implementing organisation-wide governance and compliance systems, processes and frameworks
12 251 241
Commercial AcumenGlobal commercial experience, including in implementation of financial and capital management strategies
321534
Corporate Strategy
Reviewing and setting organisational strategy, execution of organic growth opportunities and M&A
opportunities
321534
People & Culture
Driving engagement and enablement, evaluating employee and executive performance, strategic workforce
planning, succession, leading organisation change and talent development
2314133 1
Remuneration
Understanding organisational culture, management development, succession, detailed executive
remuneration matters (including scorecard target setting), incentive arrangements and staff superannuation
5141 241
Health & Safety
Implementing health, safety and wellbeing strategies, proactive identification and prevention of health and
safety risks
414234
Government RelationsInteraction with Government at all levels, influencing public policy decisions and outcomes
2 2 123134
BankingDomestic and/or international experience in banking
21223134
Liquidity and FundingBroad experience in funding and liquidity strategies and management
32141 232
Issues/Event
Management
For example, credit rating downgrades, social media events, regulatory breaches or changes, cyber security
and other similar events
1451 241
DataExperience in collecting, and deriving strategic insights from analysis of, data
212231 2 23
Digital, Information
Technology and Cyber
Domestic and/or international experience in IT strategies, IT networks, cloud computing, software delivery
and cyber security
1451 2 14
Regulatory ComplianceExperience in RBNZ compliance regime (and other applicable compliance regimes (e.g. NZX, APRA))
12 26241
Australian ExperienceExperience in banking/financial markets and regulatory bodies (APRA, ASIC, ASX, etc)
11322234
Corporate Emotional
Intelligence (EQ)
Personal attributes relevant to the Board environment including communication skills, the ability to
constructively challenge, championing an environment that effectively deals with complex issues and
continually seeking to “lift the bar”
1311516
Customer Outcomes
Experience in developing and embedding a customer-focused culture with specific attention to enhancing
customers’ experience
321534
Climate, Sustainability,
Environment & Social
Knowledge of potential opportunities and risks from a social and environmental perspective
1131231 24
49
Skills and ExperienceDescription
No. of DirectorsNo. of DirectorsNo. of Directors
HeartlandHeartland BankHeartland Bank Australia
Risk ManagementRisk management frameworks, setting risk appetite, building and adapting organisation risk culture
23141 151
Governance and
Compliance
Implementing organisation-wide governance and compliance systems, processes and frameworks
12 251 241
Commercial AcumenGlobal commercial experience, including in implementation of financial and capital management strategies
321534
Corporate Strategy
Reviewing and setting organisational strategy, execution of organic growth opportunities and M&A
opportunities
321534
People & Culture
Driving engagement and enablement, evaluating employee and executive performance, strategic workforce
planning, succession, leading organisation change and talent development
2314133 1
Remuneration
Understanding organisational culture, management development, succession, detailed executive
remuneration matters (including scorecard target setting), incentive arrangements and staff superannuation
5141 241
Health & Safety
Implementing health, safety and wellbeing strategies, proactive identification and prevention of health and
safety risks
414234
Government RelationsInteraction with Government at all levels, influencing public policy decisions and outcomes
2 2 123134
BankingDomestic and/or international experience in banking
21223134
Liquidity and FundingBroad experience in funding and liquidity strategies and management
32141 232
Issues/Event
Management
For example, credit rating downgrades, social media events, regulatory breaches or changes, cyber security
and other similar events
1451 241
DataExperience in collecting, and deriving strategic insights from analysis of, data
212231 2 23
Digital, Information
Technology and Cyber
Domestic and/or international experience in IT strategies, IT networks, cloud computing, software delivery
and cyber security
1451 2 14
Regulatory ComplianceExperience in RBNZ compliance regime (and other applicable compliance regimes (e.g. NZX, APRA))
12 26241
Australian ExperienceExperience in banking/financial markets and regulatory bodies (APRA, ASIC, ASX, etc)
11322234
Corporate Emotional
Intelligence (EQ)
Personal attributes relevant to the Board environment including communication skills, the ability to
constructively challenge, championing an environment that effectively deals with complex issues and
continually seeking to “lift the bar”
1311516
Customer Outcomes
Experience in developing and embedding a customer-focused culture with specific attention to enhancing
customers’ experience
321534
Climate, Sustainability,
Environment & Social
Knowledge of potential opportunities and risks from a social and environmental perspective
1131231 24
High competency, experience and knowledge
Practised/direct experience and knowledge
General experience and knowledge
Limited or no experience and knowledge
2 J K Greenslade retired from the Heartland Board on 30 September 2024.
3 J K Greenslade retired from the Heartland Bank Board on 30 September 2024.
4 A P Dixson was appointed to the Heartland Bank Board on 1 October 2024.
DISCLOSURES
50
Director attendance at
Board and Committee
meetings and other
director information –
Recommendation 2.4
The Board held 11 meetings,
the Heartland Bank Board
held 12 meetings, and the
Heartland Bank Australia
Board held 10 meetings
during FY2025. The following
table shows attendance by
each director at the meetings
of the relevant Board and
Board Committees of which
he or she was a member.
* These meetings were attended by the director as an observer rather than as a member.
** The Heartland Board Chair and Heartland Bank Board Chair attend the Board meetings of the
other as an observer.
* These meetings were attended by the director as an observer rather than as a member.
** The Heartland Board Chair and Heartland Bank Board Chair attend the Board meetings of the
other as an observer.
Heartland BoardHeartland Committees
Attended
as Director
Attended
as Observer
Audit & Risk
Committee
Sustainability
Committee
J K Greenslade²3---
E J Harvey11-7-
K Mitchell11-84
G R Tomlinson11-6-
R A Bell11---
S Beckett11---
B R Irvine-11**1*-
S M Ruha-2*3*-
S R Tyler-2*8*4
L G Lazarus----
G E Summerhayes-1*-4
S M Buggle--1*-
Heartland Bank BoardHeartland Bank Committees
Attended
as Director
Attended
as Observer
Audit
Committee
Risk Committee
People &
Culture and
Remuneration
Committee
J K Greenslade³4----
B R Irvine12-71*4
K Mitchell11-7*65
E J Harvey12-77-
S M Ruha 12-88-
S R Tyler12-865
A P Dixson⁴8----
G R Tomlinson-10**---
S Beckett-4*---
R A Bell-4*---
G E Summerhayes-1*---
V Z Yu-1*---
S M Buggle --3*--
5 J K Greenslade retired from the Heartland Bank Australia Board on 30 September 2024.
6 A P Dixson was appointed to the Heartland Bank Australia Board on 3 February 2025.
51
All of the then serving members of the Board
and Heartland Bank Board, and the Heartland
Bank Australia Chair, attended the Annual
General Meeting (Annual Meeting) held on
30 October 2024.
A profile of each director’s experience
is available on Heartland’s website,
heartlandgroup.info.
Succession planning is key to Heartland’s
corporate governance approach. Heartland
recognises the challenges of attracting and
retaining talented directors in New Zealand
and Australia and adopts a forward-thinking
approach in this regard. This includes
taking director tenure into account, in line
with NZX Code recommendations. The
Board is responsible for selecting new
directors, their induction, and developing a
succession plan for Board members. Annual
performance assessments of the Boards,
committees, and individual directors are
conducted, with the engagement of external
providers if necessary. This ensures a range
of complementary skills, knowledge, and
experience to effectively govern the Group’s
business, monitor performance and support
strategic priorities. As discussed in the
reporting in relation to Recommendations 2.2
and 2.3 above, a skills matrix has also been
developed by the respective Group Boards
to assess current director competencies,
identify gaps, and guide future director
appointments to align with the Group’s
strategic needs and evolving commercial
environment.
The Board has assessed each Heartland
director’s independence status, as described
in the Directors’ disclosure section of this
report. The Board confirms that none of the
factors listed in Table 2.4 of the NZX Code
apply to any of the Heartland directors who
have been assessed as independent.
In assessing the independence of Heartland’s
directors, the Board considered, among other
things, each director’s broader interests and
relationships and the following factors:
• employment in an executive role at
Heartland or its subsidiaries within the last
three years
• income derived from Heartland in the last
12 months
• holding a senior role at a major
professional services provider to
Heartland or its subsidiaries within the last
12 months
• employment by Heartland’s external
auditor in the last three years
• material business relationships with
Heartland or its subsidiaries in the last
three years
• being a substantial product holder or
associated with one
* These meetings were attended by the director as an observer rather than as a member.
Heartland Bank Australia BoardHeartland Bank Australia Committees
Attended
as Director
Attended
as Observer
Audit
Committee
Risk Committee
People,
Remuneration
& Nomination
Committee
J K Greenslade⁵3----
B R Irvine9-653
G E Summerhayes10-874
V Z Yu10-984
L G Lazarus9-1*--
S M Buggle10-984
L T McGrath9-883
A P Dixson⁶33*---
G R Tomlinson-3*--1*
S Beckett-2*---
R A Bell-2*---
DISCLOSURES
52
• material contractual relationships with
Heartland or its subsidiaries, excluding
directorship, in the last three years
• close family ties or personal relationships
(including close social or business
connections) with anyone in the
categories listed above
• whether the director has been a director of
Heartland for a period of 12 years or more.
The Directors’ disclosures section of this
report also includes information on each
director’s Heartland share dealings and
relevant interests and disclosure of interests.
A description of each director’s length of
service is included on pages 22 to 27 of this
Annual Report.
Diversity and inclusion –
Recommendation 2.5
In order to articulate its commitment to
diversity, Heartland has a Diversity & Inclusion
Policy which requires the Heartland Board,
with the help of the employee Diversity &
Inclusion Committee, to set measurable
objectives for achieving diversity and to track
progress against them.
Heartland’s Diversity & Inclusion Policy
is available on Heartland’s website,
heartlandgroup.info. Heartland’s diversity
and inclusion objectives align to its social
sustainability targets. Commentary on
Heartland’s achievements and activity in
FY2025, including gender and ethnicity pay
gap information, is included on pages 33 to 36
of this Annual Report.
Board training – Recommendation 2.6
To ensure ongoing education, directors
are regularly informed of developments
that affect the industry and business
environment, as well as company and legal
updates that are relevant for the performance
of their duties. Directors also have access to
management and external advisers to answer
any questions they may have and receive
specific training on relevant topics.
The Heartland Board adopted the Director
Professional Development Framework in
August 2025. This framework outlines options
and recommendations for both new directors
and those with longer tenures, aimed at
supporting their continued professional
development. It provides a pathway for
directors to continue to develop capability
progressively, benchmark against national
standards, and stay agile in a fast-evolving
banking and financial services environment.
The framework is based on the Director
Competency Framework from the Institute
of Directors New Zealand. It supports both
new and experienced directors through
structured learning, self-development, and
peer engagement. Professional development
opportunities are available both internally and
ex te r n a ll y.
Board, director and committee
performance assessments –
Recommendation 2.7
The Boards of Heartland, Heartland Bank and
Heartland Bank Australia undertake a formal
review of their own, their committees’ and
individual directors’ performance at least
annually. Individual director performance
reviews are facilitated by the Chairs of the
respective Boards. The Boards are also able
to engage external providers to support
performance reviews, where considered
appropriate.
This is to ensure that the Boards each have
a range of complementary skills, knowledge
and experience in order to effectively
govern the relevant Group entity, to monitor
its performance, and to support the
implementation of its strategic priorities in
the interests of its shareholders and other
stakeholders.
Each of the Group Boards recognise the
need to have a range of complementary
skills, knowledge and experience to support
the Group’s implementation of its strategic
priorities, and for each Board to have a
balance of skills and attributes in order to
support diversity at a Board level. With this
in mind, the composition of the Boards of
Heartland, Heartland Bank and Heartland
Bank Australia are regularly reviewed and their
collective skills, knowledge and experience
formally assessed. This exercise provides an
opportunity to reflect on and discuss current
Board composition, as well as succession
planning.
7 G R Tomlinson has been a non-executive director of Heartland since 2018. He was also a director of Heartland Bank Limited, Heartland’s
predecessor entity, before the corporate restructure of the Heartland group on 31 October 2018. On that date he ceased to be a director of
Heartland Bank Limited and began his appointment on the Heartland Board.
53
The current Boards comprise directors with
a mix of qualifications, skills and attributes
who hold diverse business, governance and
industry experience. A director skills matrix is
also included above.
Board independence –
Recommendation 2.8
Recommendation 2.8 of the NZX Code
states that a majority of the Board should
be independent. The NZX Main Board Listing
Rules also require that the Board must have
at least three directors, with at least two
directors ordinarily resident in New Zealand
and at least two directors being independent.
Subject to these requirements, the Board
determines the size and composition of the
Board from time to time.
During the reporting period, J K Greenslade
resigned from the Heartland Board with
effect from 30 September 2024.
As at 30 June 2025, the Board comprised
five directors, being the non-independent,
non-executive Chair, and four independent,
non-executive directors. Three of
Heartland’s directors are ordinarily resident
in New Zealand, and (as has been the case
throughout the reporting period) a majority
of the Heartland Board is independent. The
Board encourages rigorous discussion and
analysis when making decisions.
Please refer to Recommendation 2.4 above
for further information in relation to each
Heartland director’s independence status as
at 30 June 2025 and the matters considered
as part of those determinations.
Independent Chair – Recommendation 2.9
G R Tomlinson is not considered to be an
independent Chair of Heartland, as he is
a substantial product holder of the issuer.
Although G R Tomlinson is not independent,
the Board is of the view that it is appropriate
for G R Tomlinson to be Heartland’s Chair, as
he has been a longstanding non-executive
director of Heartland since 2018,⁷ held the
role of Deputy Chair for a number of years,
and has a deep understanding of Heartland,
its business and its shareholders. In addition,
he is not an executive of Heartland which
ensures that there is continued, appropriate
separation between the Chair and CEO of
Heartland as discussed in the commentary
on Recommendation 2.10 below.
As a result, Heartland was not compliant with
Recommendation 2.9 of the NZX Code for the
year ended 30 June 2025, which states that
an issuer should have an independent chair
of the board.
Separate Chair and CEO –
Recommendation 2.10
To ensure that a conflict of interest does not
arise, the Chair of Heartland and the CEO
are separate persons, in accordance with
Recommendation 2.10 of the NZX Code.
Principle 3 – Board Committees
The board should use committees where this
will enhance its effectiveness in key areas,
while still retaining board responsibility.
As at 30 June 2025, Heartland had
two permanently constituted Board
Committees: the Audit & Risk Committee
and the Sustainability Committee. During
FY2025, each of these committees worked
with management in its specific area of
responsibility and reported its findings and
recommendations to the Board. Management
attended committee meetings as required at
the invitation of the relevant committee.
Each of these Committees has a charter
which sets out the committee’s objectives,
membership, procedures and responsibilities.
A Committee does not take action or make
decisions on behalf of the Board unless it is
specifically mandated to do so. The charter
of each of the Audit & Risk Committee and
the Sustainability Committee is available on
Heartland’s website, heartlandgroup.info.
On 1 July 2024, the Heartland Corporate
Governance, People, Remuneration and
Nominations Committee was disestablished,
with the Heartland Board assuming
responsibility for remuneration and
nomination matters. See the commentary on
Recommendations 3.3 and 3.4 on the next
page for further information, together with
the disclosures included the Heartland’s 2024
Annual Report.
DISCLOSURES
54
Audit & Risk Committee –
Recommendations 3.1 and 3.2
The Audit & Risk Committee must have at
least three members, with membership
being restricted to non-executive directors,
the majority of whom must be independent.
One member of the Committee must be
both independent and have an adequate
accounting or financial background. The
Chair of the Audit & Risk Committee must be
an independent director who is not the Chair
of the Board. The Audit & Risk Committee
operates under a written charter and
management and employees only attend
meetings at the invitation of the Committee.
The Audit & Risk Committee’s written charter
is available at heartlandgroup.info.
As at 30 June 2025, the members of the
Audit & Risk Committee were E J Harvey
(Chair), K Mitchell and G R Tomlinson. The
role of the Audit & Risk Committee is to
advise and provide assurance to the Board
in order to enable the Board to discharge its
responsibilities in relation to the oversight of:
• the integrity of financial control, financial
management and external financial
reporting
• the internal audit function
• the independent audit process
• the formulation of its risk appetite.
The Audit & Risk Committee also provides the
Board with assurance that all risks within the
key risk categories which are relevant to the
Group have been appropriately identified,
managed and reported to the Board.
The Audit & Risk Committee works closely
with the Audit Committee and the Risk
Committee of each of Heartland Bank and
Heartland Bank Australia, which have similar
responsibilities in relation to Heartland Bank
and Heartland Bank Australia, respectively.
Their meetings are held separately with only
the respective Chairs attending the other
meetings, although other directors may
observe on occasion.
The relevant qualifications of the Committee
members are included on page 86 of
this Annual Report and their biographies
are available on Heartland’s website,
heartlandgroup.info. As at 30 June 2025,
the Board determined that all committee
members had a recognised form of financial
expertise in accordance with the Audit & Risk
Committee’s charter.
Remuneration and Nomination Matters -
Recommendations 3.3 and 3.4
On 1 July 2024, the Heartland Corporate
Governance, People, Remuneration and
Nominations Committee was disestablished,
and the full Heartland Board assumed
certain corporate governance, people,
remuneration and nomination functions
which had previously been carried out by the
Committee (and are not now being carried out
by the Heartland Bank People & Culture and
Remuneration Committee (Heartland Bank
RemCo)) or the Heartland Bank Australia
People, Remuneration and Nominations
Committee (Heartland Bank Australia
PRNCo)). Please refer to the disclosures
included the Heartland’s 2024 Annual Report
for further information.
Accordingly, during FY2025, the Board had
responsibility for those matters set out on
page 66 of the Remuneration report.
Management only attends Board meetings
in relation to remuneration matters at the
invitation of the Board.
Other Committees –
Recommendations 3.5
In addition to the Audit & Risk Committee,
the Heartland Board has a Sustainability
Committee to oversee Heartland’s
Sustainability strategy and implementation
plans.
The Sustainability Committee operates
under a written charter which is available
on Heartland’s website, heartlandgroup.
info. The purpose of the Committee is to
advise and provide assurance to the Board
in order to enable the Board to discharge its
responsibilities in relation to:
• recommending and reviewing progress
against the Group’s sustainability
strategy – including undertaking an initial
materiality analysis
• Heartland’s annual sustainability
disclosures
8 Other than in the case of regular financial reporting and capital markets activity (the form and content of which is approved by the full
Boards of Heartland, Heartland Bank and/or Heartland Bank Australia upon the recommendation of the Heartland Board Audit & Risk
Committee, the Heartland Bank Board Audit Committee, the Heartland Bank Australia Board Audit Committee or a specially convened due
diligence committee (as applicable), approving the form and content of that disclosure).
55
• the oversight of Heartland’s
implementation of the climate-related risks
(and opportunities) disclosure regime
• advocacy for sustainability issues,
including consideration of whether the
appropriate skills and competencies exist
across Heartland.
Under the charter, the Committee must
be made up of at least one non-executive
director of Heartland. The majority of
the Committee must be independent
directors, and the Committee may include
non-executive directors of Heartland’s
subsidiaries. As at 30 June 2025, the members
of the Committee are K Mitchell (Chair), S
Tyler and G E Summerhayes. The proceedings
of the Committee are regularly reported back
to the Board.
As at 30 June 2025, Heartland Bank and
Heartland Bank Australia also have separately
constituted Audit Committees, Risk
Committees, and a Heartland Bank RemCo
and a Heartland Bank Australia PRNCo. The
Committees each operate under written
charters and are tasked with working with
management and reporting their findings and
recommendations to the relevant Board.
The Board is comfortable that no other
standing Committees are necessary at this
stage, however other ad hoc Committees are
established for specific purposes from time
to time.
Takeovers Response Manual –
Recommendation 3.6
The Board has documented and adopted
a Takeover Response Manual document,
which is designed to give the Board and
management clear direction on the steps
that need to be taken following receipt of a
takeover offer.
The document, amongst other things,
includes an “independent director”
protocol for directors who are involved in
or associated with the bidder, talks to the
scope of independent advisory reports
to shareholders, and prompts the Board
to consider the option of establishing an
independent Takeover Committee following
receipt of a takeover offer.
Principle 4 – Reporting and
disclosures
The board should demand integrity in
financial and non-financial reporting, and
in the timeliness and balance of corporate
disclosures.
Heartland appreciates that its investors
and other stakeholders value both financial
and non-financial reporting, and Heartland
seeks to ensure that its investors have
timely access to full and accurate material
information about Heartland which is factual
and balanced.
Continuous Disclosure Policy –
Recommendation 4.1
Heartland’s Disclosure Policy sets out
procedures that are in place to make
sure all material information is identified
and disclosed in a timely manner, and to
prevent the selective disclosure of material
non-public information. Under the Policy,
potentially ‘material information’ is required
to be brought to the attention of the Chief
Legal Officer who is responsible for making
a recommendation to the ‘Decision Makers’
being:
• the CEO of Heartland, and/or
• the CEO of Heartland Bank and at least one
independent director of Heartland and/or
Heartland Bank, and/or
• the full Board of Heartland and/or
Heartland Bank (as applicable).
The Decision Makers are ultimately
responsible for determining whether
information is material⁸, and approving the
form and content of material information
that is disclosed. Heartland also monitors
information in the market about itself and will
release information to the extent necessary
to prevent the development of a false market
for the Group’s quoted financial products.
Availability of key documents –
Recommendation 4.2
Heartland’s Codes of Conduct, Board
and Committee Charters and the policies
recommended in the NZX Code, including
the Disclosure Policy, the Insider Trading
Policy, the Diversity and Inclusion Policy and
DISCLOSURES
56
the Remuneration Policy, are available on
Heartland’s website, heartlandgroup.info.
Heartland also maintains copies of its stock
exchange announcements, and half-year and
full-year reports, investor presentations and
details of annual shareholder meetings, on its
website.
Financial reporting disclosure –
Recommendation 4.3
The Audit & Risk Committee oversees the
quality and timeliness of all external financial
reports, including all disclosure documents
issued by Heartland.
The Audit & Risk Committee, working closely
with the Heartland Bank and Heartland
Bank Australia Audit Committees, oversees
the preparation of Heartland’s financial
statements and setting policy to ensure the
information presented is useful for investors
and other stakeholders. Heartland makes its
financial statements easy to read by using
clear, plain and objective language, and
structuring them so that key information is
prominent. In addition to the full-year audit,
Heartland’s external auditor completes a
review of the interim financial statements.
Heartland’s CEO is also required to certify to
the Audit & Risk Committee that the financial
statements of the Group present a true and
fair view of Heartland and comply with all
relevant accounting standards.
Non-financial reporting disclosure –
Recommendation 4.4
This is the seventh year that Heartland has
reported against a Sustainability Framework
in order to provide more detailed information
on the value created for Heartland’s
stakeholders. Refer to ‘
Sustainability’ on
page 30 of this Annual Report for information
on Heartland’s environmental, social and
economic impact across New Zealand and
Australia.
Heartland is a climate reporting entity
for the purposes of the Financial Markets
Conduct Act 2013. This is the second year
that Heartland has published its climate-
related disclosures (refer to Heartland’s
Climate Report available at heartlandgroup.
info/sustainability), in accordance with the
requirements of the Aotearoa New Zealand
Climate Standards.
The Board continually evaluates what
non-financial matters are a focus of the
Group and the roles of executives are
refined to ensure that such matters have
appropriate oversight. This process ensures
that Heartland’s non-financial reporting is
accurate and discloses a valuable amount of
information to shareholders. In recognition
of the need to dedicate specific expertise
to Heartland’s sustainability initiatives,
Heartland has a Sustainability Committee
(being a Board Committee).
Principle 5 – Remuneration
The remuneration of directors and executives
should be transparent, fair and reasonable.
Heartland’s remuneration report can be
found on page 65 of this Annual Report.
Principle 6 – Risk Management
Directors should have a sound understanding
of the material risks faced by the issuer
and how to manage them. The Board
should regularly verify that the issuer has
appropriate processes that identify and
manage potential and material risks.
Risk management – Recommendation 6.1
The Board ensures that Heartland has a Risk
Management Programme in place which
identifies, manages and communicates
the key risks that may impact Heartland’s
business. Specific risk management
strategies have been developed for each
of the key risks identified. The Audit & Risk
Committee of the Board oversees the risk
management programme and strategy.
The Board and Audit & Risk Committee
receive and review regular reports on risk
management. Specific risks identified by the
Board are set out in the notes to Heartland’s
financial statements for the year ended 30
June 2025 included in this Annual Report.
In addition, as discussed above, Heartland
and Heartland Bank have implemented an
Oversight Framework, which sets out the
overarching framework for, and approach
to, oversight activities in the Group. This
57
includes (amongst other things) governance
expectations in respect of risk, reflecting
that each Group entity has its own risk
appetite and measures, but parent entities
will set consolidated group risk appetite and
measures (as applicable), which necessitates
overall alignment of subsidiaries’ risk
appetites, measures and common risk
classification where possible.
Heartland also has in place insurance cover
for insurable liability and general business
risk.
Health and safety – Recommendation 6.2
Heartland promotes a working environment
where it engages with all its people, so that
together they can maintain a workplace that
is mentally and physically safe and healthy,
and to promote a positive health and safety
culture. Heartland engages with its people to
identify, assess, control and review risk, with
a focus on continuous improvement of health
a n d s af e t y.
All Group employees are required to read
and attest to the relevant policy, noting
separate policies are maintained for New
Zealand (Wellbeing, Health and Safety
Policy) and Australia (Workplace Health and
Safety Policy). Maintaining separate policies
allows for the legislative variances between
jurisdictions and Australia having both State
and Federal workplace health and safety
requirements. Induction includes instruction
on the relevant policy and procedures, and
employees are required to attest to their
reading and understanding of the relevant
policy. The Wellbeing, Health, & Safety
Committee, representing all employees,
convenes quarterly to discuss and review
reported incidents, accidents and near
misses, initiatives and tabled reports.
Incidents, accidents and near misses are
registered in our Risk Management System
(RMS). A Health & Safety Report that includes
RMS data, number of employee insurance
claims, number of employees accessing
counselling, and summaries of initiatives is
provided to the Executive Risk Committee and
to all Boards.
In FY2025, there were no notifiable events to
report to WorkSafe New Zealand, and there
have been no claims to the Australian Workers
Compensation Insurance.
Principle 7 – Auditors
External auditor relationship framework
and independence – Recommendation 7.1
The board should ensure the quality and
independence of the external audit process.
The Audit & Risk Committee is responsible
for overseeing the external, independent
audit of Heartland’s financial statements.
This encompasses processes for sustaining
communication with Heartland’s external
auditors, ensuring that the ability of the
external auditors to carry out their statutory
audit role is not impaired, or could reasonably
be perceived to be impaired, to address what
other services may be provided by the external
auditors to Heartland, and to provide for the
monitoring and approval of any such services.
Heartland’s External Auditor Independence
Policy was updated in December 2024 to
ensure it remains current. The Policy provides
guidelines to ensure that non-audit related
services do not conflict with the independent
role of the external auditor, and the Audit &
Risk Committee ensures that non-audit work
undertaken by the auditors is in accordance
with that Policy. The Policy also sets out
guidelines in relation to the tenure and re-
appointment of the external auditor, which
the Audit & Risk Committee ensures are
complied with. Refer to Heartland’s website,
heartlandgroup.info, for a copy of the External
Auditor Independence Policy.
The external auditor monitors its
independence and reports to the Audit &
Risk Committee bi-annually to confirm that
it has remained independent in the previous
six months, in accordance with Heartland’s
External Auditor Independence Policy and the
external auditor’s policies and professional
requirements. There have been no threats
to auditor independence identified during
FY2025.
During FY2025, PricewaterhouseCoopers
(PwC) continued to act as auditor of Heartland
and its New Zealand subsidiaries. PwC were
appointed as auditor of Heartland’s Australian
subsidiaries commencing 1 May 2025.
DISCLOSURES
58
Auditor AGM attendance –
Recommendation 7.2
Heartland’s external auditor attends its
Annual Meeting to answer questions from
shareholders in relation to the audit.
Internal Audit – Recommendation 7.3
Heartland also has internal audit functions
which are independent of the external
auditors. The internal audit function for
New Zealand is maintained within Heartland
Bank and made available to Heartland while
Heartland Bank Australia has its own internal
audit function. Internal audit is allowed full,
free and unfettered access to any and all of
the relevant entity’s records, personnel and
physical properties deemed necessary to
accomplish its activities. The internal audit
functions and other assurance roles have
unfettered access to the Group’s Boards as
required.
The objective of the internal audit functions
is to provide independent, objective
assurance over the internal control risk
framework and compliance with policies.
In certain circumstances, internal audit
will provide risk and control advice to
Management provided the work does not
impede the independence of the internal
audit functions. The functions assist
Heartland in accomplishing its objectives by
bringing a systemic and disciplined approach
to evaluate and improve the effectiveness of
risk management, control, and governance
processes.
The Heartland Board Audit & Risk Committee,
Heartland Bank Board Audit Committee
and Heartland Bank Australia Board Audit
Committee each approve respective annual
internal audit programmes (as applicable),
which are developed in consultation with
Management. A regular cycle of review
is implemented to cover all areas of
the business, focused on assessment,
management and control risks identified. The
audit plans take into account cyclical review
of various business units and operational
areas, as well as identified areas of higher
identified risk. The audit methodology
is designed to meet the International
Standards for the Professional Practice for
Internal Auditing of The Institute of Internal
Auditors.
Principle 8 – Shareholder rights
and relations
The board should respect the rights of
shareholders and foster constructive
relationships with shareholders that
encourage them to engage with the issuer.
Shareholder information and
communication – Recommendations 8.1
and 8.2
The Board is committed to maintaining a full
and open dialogue with all shareholders,
as outlined in the Disclosure Policy which
is available on Heartland’s website,
heartlandgroup.info. Heartland keeps
shareholders informed through:
• periodic and continuous disclosure to NZX
and ASX
• information provided to analysts and
media during briefings
• Heartland’s website (heartlandgroup.info)
where shareholders can access financial,
operational and key corporate governance
information
• the Annual Meeting, at which
shareholders’ have the opportunity to ask
questions
• annual reports.
To ensure a high level of accountability,
the Board encourages full participation of
shareholders at the Annual Meeting and
designs the meeting to best achieve this
outcome. This includes holding a hybrid
meeting where shareholders can attend
a physical event or join virtually online.
Attendees are also able to submit questions
in advance of the Annual Meeting and those
attending in person can raise them directly.
When Heartland publishes its Notice of
Annual Meeting, it also publishes an Online
Guide which explains how to join and navigate
the virtual elements of the meeting. At the
conclusion of the live event, a webcast of the
Annual Meeting is published on Heartland’s
website.
Heartland’s website includes a ’Contact
Us’ page that provides contact details for
Heartland’s share registrar and shareholder
59
enquiries and provides the option to
receive communications from Heartland
electronically.
Major decisions – Recommendation 8.3
Where shareholders are required to vote on
a matter concerning Heartland, the Board
encourages shareholders to attend the
Annual Meeting or to cast a postal vote or
appoint a proxy. All voting at the Heartland’s
Annual Meeting is conducted by way of poll
on the basis of one share, one vote.
Raising additional equity –
Recommendation 8.4
Heartland has not sought additional equity
capital during FY2025.
Publication of notice of meeting –
Recommendation 8.5
Both Heartland’s 2024 notice of meeting and
2025 notice of meeting were available at least
20 working days prior to its Annual Meeting at
heartlandgroup.info.
DISCLOSURES
60
Directors' disclosures
Directors
The following persons were directors of Heartland and its subsidiaries during the year ended 30
June 2025.
CompanyDirectorsStatus
Heartland Group Holdings
Limited
Gregory Raymond Tomlinson
Simon Beckett
Robert Alan Bell
Jeffrey Kenneth Greenslade
Edward John Harvey
Kathryn Mitchell
Non-Independent, Non-Executive
Dire c to r (Ch air)
Independent, Non-Executive Director
Independent, Non-Executive Director
Non-independent, Executive Director
(ceased directorship 30 September
2024)
Independent, Non-Executive Director
Independent, Non-Executive Director
Heartland Bank LimitedBruce Robertson Irvine
Andrew Peter Dixson
Jeffrey Kenneth Greenslade
Edward John Harvey
Kathryn Mitchell
Shelley Maree Ruha
Simon Ross Tyler
Independent, Non-Executive Director
(Ch air)
Non-Independent, Non-Executive
Director (appointed 1 October 2024)
Non-Independent, Non-Executive
Director (ceased directorship 30
September 2024)
Non-Independent, Non-Executive
Director
Non-Independent, Non-Executive
Director
Independent, Non-Executive Director
Independent, Non-Executive Director
Heartland Bank Australia LimitedGeoffrey Edward Summerhayes
Shane Michael Buggle
Andrew Peter Dixson
Jeffrey Kenneth Greenslade
Bruce Robertson Irvine
Leanne Gloria Lazarus
Lyn Therese McGrath
Vivienne Zhaohui Yu
Independent, Non-Executive Director
(Ch air)
Independent, Non-Executive Director
Non-Independent, Non-Executive
Director (appointed 3 February 2025)
Non-Independent, Non-Executive
Director (ceased directorship 30
September 2024)
Independent, Non-Executive Director
Non-Independent, Non-Executive
Director
Independent, Non-Executive Director
Independent, Non-Executive Director
ASF Custodians Pty LimitedRichard Michael Collier
Jeffrey Kenneth Greenslade
Michelle Kay Winzer
Richard Glenn Udovenya
Appointed 24 January 2025
Ceased directorship 30 September
2024
Appointed 24 January 2025
Ceased directorship 31 January 2025
Australian Seniors Finance Pty
Limited
Richard Michael Collier
Christopher Patrick Francis Flood
Jeffrey Kenneth Greenslade
Geoffrey Edward Summerhayes
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 29 July 2024
Ceased directorship 30 September
2024
Ceased directorship 29 July 2024
Appointed 29 July 2024
1 A Aitken ceased his directorship on 31 July 2025.
61
Heartland Australia Holdings Pty
Ltd
Richard Michael Collier
Christopher Patrick Francis Flood
Jeffrey Kenneth Greenslade
Geoffrey Edward Summerhayes
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 29 July 2024
Ceased directorship 30 September
2024
Ceased directorship 29 July 2024
Appointed 29 July 2024
Heartland Australia Group Pty LtdRichard Michael Collier
Christopher Patrick Francis Flood
Jeffrey Kenneth Greenslade
Geoffrey Edward Summerhayes
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 29 July 2024
Ceased directorship 30 September
2024
Ceased directorship 29 July 2024
Appointed 29 July 2024
Heartland Australia Investments
Holdings Pty Limited
Richard Michael Collier
Christopher Patrick Francis Flood
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 29 July 2024
Appointed 29 July 2024
Heartland NZ Trustee Limited Christopher Patrick Francis Flood
Leanne Gloria Lazarus
Ceased directorship 1 October 2024
Appointed 1 October 2024
Heartland PIE Fund LimitedBruce Robertson Irvine
Leanne Gloria Lazarus
MARAC Insurance LimitedAndrew James Aitken¹
Christopher Patrick Francis Flood
Leanne Gloria Lazarus
Christopher Robert Mace
Ceased directorship 1 October 2024
Appointed 1 October 2024
Ceased directorship 14 April 2025
VPS Properties Limited Kerry Louise Conway
Christopher Patrick Francis Flood
Leanne Gloria Lazarus
Appointed 1 August 2024
Ceased directorship 1 August 2024
Appointed 1 August 2024
Fuelled Limited Christopher Patrick Francis Flood
Leanne Gloria Lazarus
Ceased directorship 1 October 2024
Appointed 1 October 2024
StockCo Holdings 2 Pty Limited Richard Michael Collier
Andrew Peter Dixson
Christopher Patrick Francis Flood
Jeffrey Kenneth Greenslade
Geoffrey Edward Summerhayes
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 22 July 2024
Ceased directorship 29 July 2024
Ceased directorship 30 September
2024
Ceased directorship 29 July 2024
Appointed 29 July 2024
StockCo Holdings Pty LimitedRichard Michael Collier
Andrew Peter Dixson
Christopher Patrick Francis Flood
Jeffrey Kenneth Greenslade
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 22 July 2024
Ceased directorship 29 July 2024
Ceased directorship 30 September
2024
Appointed 29 July 2024
StockCo AgriCapital Pty LtdRichard Michael Collier
Andrew Peter Dixson
Christopher Patrick Francis Flood
Jeffrey Kenneth Greenslade
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 22 July 2024
Ceased directorship 29 July 2024
Ceased directorship 30 September
2024
Appointed 29 July 2024
StockCo Feedlot Holdings Pty
Limited
Richard Michael Collier
Christopher Patrick Francis Flood
Jeffrey Kenneth Greenslade
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 29 July 2024
Ceased directorship 30 September
2024
Appointed 29 July 2024
DISCLOSURES
62
StockCo Feedlot Capital Pty
Limited
Richard Michael Collier
Christopher Patrick Francis Flood
Jeffrey Kenneth Greenslade
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 29 July 2024
Ceased directorship 30 September
2024
Appointed 29 July 2024
StockCo Australia Management
Pty Ltd
Richard Michael Collier
Andrew Peter Dixson
Christopher Patrick Francis Flood
Jeffrey Kenneth Greenslade
Michelle Kay Winzer
Appointed 29 July 2024
Ceased directorship 22 July 2024
Ceased directorship 29 July 2024
Ceased directorship 30 September
2024
Appointed 29 July 2024
Please refer to the detailed information on page 53 of the Corporate Governance section in
relation to the matters considered in determining whether a director of Heartland is independent
as at 30 June 2025.
Interests register
The following are the entries in the Interests Registers of the Group made during FY2025.
Indemnification and insurance of directors
Heartland has given indemnities to, and has affected insurance for, directors of the Group to
indemnify and insure them in respect of any liability for, or costs incurred in relation to, any act
or omission in their capacity as directors, to the extent permitted by the Companies Act 1993.
The cost of the directors and officers’ liability insurance premiums to the Group for FY2025 was
$650,620.99 (excluding GST and administration charges).
Share dealings by directors
Details of individual directors’ share dealings as entered in the Interests Registers of Heartland
and Heartland Bank under Section 148(2) of the Companies Act 1993 during FY2025 are as follows
(all dealings are in ordinary shares unless otherwise specified). No Heartland Bank Australia
directors had share dealings during FY2025.
R A Bell
Date of acquisition/
disposal
Nature of transaction
and relevant interest
Acquisition /
disposal
No. of sharesConsideration
30 August 2024Acquisition of legal and beneficial
interest in shares
Acquisition5,400$5,869.09
3 March 2025Acquisition of legal and beneficial
interest in shares
Acquisition11,892$10,670.00
4 March 2025Acquisition of legal and beneficial
interest in shares
Acquisition108$96.90
S Beckett
Date of acquisition/
disposal
Nature of transaction
and relevant interest
Acquisition /
disposal
No. of sharesConsideration
4 March 2025Acquisition of legal and beneficial
interest in shares
Acquisition62,824$55,386.34
63
E J Harvey
Date of acquisition/
disposal
Nature of transaction
and relevant interest
Acquisition /
disposal
No. of sharesConsideration
20 September 2024Allotment under DRPAcquisition5,322$5,955.57
21 March 2025Allotment under DRPAcquisition4,666$3,793.74
S R Tyler
Date of acquisition/
disposal
Nature of transaction
and relevant interest
Acquisition /
disposal
No. of sharesConsideration
6 March 2025Acquisition of legal and beneficial
interest in shares
Acquisition50,000$43,000.00
G R Tomlinson
Date of acquisition/
disposal
Nature of transaction
and relevant interest
Acquisition /
disposal
No. of sharesConsideration
6 March 2025Change in nature of relevant interest.
A transfer of shares from Harrogate
Trustee Limited and Gregory Raymond
Tomlinson to Tomlinson Group HGH
Limited resulted in the Tomlinson Group
HGH Limited obtaining a substantial
shareholding in Heartland
Off-market
trade
83,335,936Not applicable
General notice of disclosure of interests in the interests register
Details of any changes to the following during FY2025 are below:
• Heartland and Heartland Bank directors’ general disclosures entered in the relevant interests
register under Section 140 of the Companies Act 1993; and
• Heartland Bank Australia directors’ general disclosures entered in the relevant interests
register under Section 191 of the Corporations Act 2001 (Cth):
Heartland
G R TomlinsonDirector of Brandywine Vineyards Limited, Tomlinson Group HGH Limited disclosed
6 May 2025; Advisor to the Minister of Racing to assist the NZ TAB, Entain and the NZ
Racing bodies disclosed 23 June 2025.
J K GreensladeNo changes during FY2025.
K MitchellNo changes during FY2025.
E J HarveyNo changes during FY2025.
S BeckettDirector of Karia Technology Pty Limited disclosed 21 February 2025; Director of
First Avenue Capital Pty Ltd, Venture Partner of Antler VC and Advisor to Stay or Go
disclosed 26 June 2025.
R A BellTrustee of RLLZ, Director of Monoova Limited disclosed 23 October 2024.
1 The non-beneficial interest in the 6,504,266 shares arises from those directors being a trustee of the Heartland Trust, which held 6,504,266
shares in Heartland as at 30 June 2025.
DISCLOSURES
64
Heartland Bank
B R IrvineNo changes during FY2025.
J K GreensladeNo changes during FY2025.
E J HarveyNo changes during FY2025.
K MitchellNo changes during FY2025.
S M RuhaNo changes during FY2025.
S Ty l e rDirector of Asteron Life Limited disclosed on 9 August 2024.
A P Dixson Director of Village Fields Titirangi Limited disclosed on 1 October 2024.
Heartland Bank Australia
G E Summerhayes Move to NPP Steering Committee established by Australian Payments Plus
disclosed on 21 February 2025.
S M BuggleDirector of Bupa ANZ Insurance Pty, Bupa ANZ Healthcare Holdings Pty Ltd, Bupa
HI Pty Ltd , Bupa HI Holdings Pty Ltd, Bupa Foundation (Australia) Limited, and Bupa
Aged Care Australia Pty Ltd disclosed on 25 July 2024.
L T McGrathDirector of CIMB Group disclosed on 1 October 2024; Ceased directorship of Auswide
disclosed on 28 February 2025.
Details of Heartland and Heartland Bank directors’ general disclosures entered in the relevant
interest register under Section 140 of the Companies Act 1993 prior to 1 July 2024 can be found in
earlier Annual Reports.
Specific disclosures of interest in the interests register
There were no specific disclosures of interests in transactions entered into by the Group during
FY2025.
Information used by directors
No director of the Group disclosed use of information received in his or her capacity as a director
that would not otherwise be available to that director.
Heartland, Heartland Bank and Heartland Bank Australia directors'
relevant interests
As at 30 June 2025.
DirectorNumber of ordinary
shares – beneficial
Number of ordinary
shares – non-beneficial¹
Number of
options
R A Bell17,400NilNil
S Beckett62,824NilNil
A P Dixson550,000NilNil
E J Harvey208,5076,504,266Nil
B R Irvine903,6066,504,266 Nil
K Mitchell139,646NilNil
S M Ruha200,000NilNil
G E Summerhayes55,838NilNil
G R Tomlinson83,335,936NilNil
S R Tyler50,000NilNil
1 The annual performance review process is undertaken in the period leading up to Heartland’s full year results announcement in relation to
performance during the prior reporting period. Half year performance reviews are also conducted in the period leading up to Heartland’s half
year results announcement, as part of which employees are also assessed against the Gateways described above to determine whether
they are on track to achieve them, or require improvement.
65
Remuneration report
This remuneration report describes Heartland’s remuneration arrangements for FY2025 and
includes reporting against the recommendations contained in Principle 5 of the NZX Code.
This report has been prepared on the basis of the NZX Remuneration Reporting Template for
Listed Issuers published December 2023.
Remuneration Governance
Remuneration Governance Framework
Heartland’s remuneration strategy is
designed to create a high-performance
culture underpinned by Heartland’s values
which attracts and retains quality employees.
Heartland has a Remuneration Policy
which has been adopted and approved by
the Boards of Heartland, Heartland Bank
and Heartland Bank Australia. This policy
explains the Group’s remuneration strategy
and approach to setting remuneration for
directors, executives and employees of
Heartland and its subsidiaries.
The key principles are to:
• comply with all applicable legal and
regulatory requirements to ensure good
customer outcomes
• review and carefully consider the link
between Group performance and
remuneration and promote conduct which
is consistent with the relevant Board’s risk
appetite and the creation of shareholder
value
• support the attraction, retention and
engagement of quality, diverse candidates
• not show bias on the basis of gender,
ethnicity, sexuality or any other individual
factor
• further the aspirations to achieve pay
equity across the organisation
• be consistent and promote adherence to
values, policies and procedures
• reward people for performance that
exceeds expectations delivered within the
guidance of Heartland’s values
• be flexible to meet operational variances.
The objectives of the Remuneration Policy
are to ensure the appropriate oversight
of remuneration arrangements and the
alignment of remuneration arrangements
with the business plans, strategic objectives
and risk management frameworks of the
Group (as applicable) which will support:
• effective management of both financial
and non-financial risks, sustainable
performance and long-term soundness
• the prevention and mitigation of conduct
risk
• alignment of variable remuneration
outcomes with performance and risk
outcomes.
The Remuneration Policy is available on
Heartland’s website at heartlandgroup.info.
The Group’s Boards are kept up to date
with relevant market information and best
practice, obtaining advice from external
advisers when necessary to support
remuneration decision making.
The other internal governance policies that
provide context for Heartland’s remuneration
outcomes are described in the Corporate
Governance section of this Annual Report,
including the Insider Trading Policy and the
respective Codes of Conduct.
Heartland, Heartland Bank and Heartland Bank
Australia assess all employees (regardless of
seniority) against two gateways (Gateways)
as part of the annual performance review
process (amongst other things):¹
• the Risk & Compliance Gateway, which
assesses whether the employee has
contributed to a healthy risk culture
• the Culture, Behaviour and Values
Gateway, which assesses each employee’s
performance and behaviour with reference
to Heartland’s values (mātāpono).
DISCLOSURES
66
Employees who are not ranked as “meets
expectations” or higher, with reference
to their performance over the preceding
reporting period in respect of these Gateways
are ineligible for a remuneration increase or
variable remuneration.
Heartland’s Remuneration Committees
As discussed on page 54 of the Annual Report,
on 1 July 2025, the Heartland Corporate
Governance, People, Remuneration and
Nominations Committee was disestablished.
From that date, the full Heartland Board
assumed responsibility for certain corporate
governance, people, remuneration and
nomination functions which had previously
been carried out by this Committee, and are
not now being carried out by the Heartland
Bank RemCo (established on 30 April 2024)
or the Heartland Bank Australia PRNCo
(established on 1 July 2024).
Accordingly, during FY2025, the Heartland
Board had responsibility for the following
corporate governance, people, remuneration
and nomination functions:
• corporate governance matters
• people strategy, including organisation
structure, performance, succession
planning, development, culture, diversity
and remuneration strategy (including in
relation to variable remuneration) and
policies and any other strategic people
initiatives
• remuneration of the Heartland directors,
CEO and senior executives
• monitoring the performance of the
Heartland CEO, including setting and review
of annual key performance indicators (KPIs)
• Heartland director and senior executive
appointments, Board composition and
succession planning
• development of a new Heartland long-
term incentive (LTI) scheme as part of its
retention and incentive arrangements
for executive employees and to align the
interests of all participants (Participants),
which may include other senior employees,
with the interests of Heartland’s
shareholders and to encourage longer
term decision making by Participants.
More information in relation to this new LTI
scheme is available below.
Management only attended those parts
of Heartland Board meetings relating to
remuneration matters at the invitation of the
Heartland Board.
The Heartland Bank RemCo and the Heartland
Bank Australia PRNCo are comprised of the
members set out in the table below, each of
whom have been members of the relevant
Committee since its establishment. The
majority of members on the Heartland Bank
RemCo are independent directors and all
members on the Heartland Bank Australia
PRNCo are independent directors. There
have been no membership changes to these
Committees during FY2025.
Heartland Bank RemCo
Bruce Irvine (Chair)
Kate Mitchell
Simon Tyler
Heartland Bank Australia PRNCo
Vivienne Yu (Chair)
Shane Buggle
Bruce Irvine
Lyn McGrath
Geoff Summerhayes
Management only attends the respective
Committee meetings by invitation.
These Committees each operate under a
written charter and assist their respective
boards with a range of matters, including:
• people strategy, including organisation
structure, performance, succession
planning, development, culture, diversity
and remuneration strategy and policies
and any other strategic people initiatives
• remuneration of the relevant CEO and
senior executives
• monitoring the performance of the
relevant CEO, including setting and review
of annual KPIs
• director and senior executive
appointments, Board composition and
succession planning.
2 Employer contribution to KiwiSaver or superannuation (as applicable) is paid in addition to any STI cash payment.
67
Information in relation to each member’s
attendance at Committee meetings can
be found on pages 50 to 51 of this Annual
Report.
Executive Remuneration Policy
Heartland’s Remuneration Policy, as
described above, applies to all of the Group’s
executives.
Executive remuneration levels are reviewed
annually for market competitiveness and
alignment with strategic and performance
priorities. The objective is to provide
competitive remuneration that aligns
executives’ remuneration with shareholder
value and rewards the executives’
achievement of the Group’s strategies and
business plans.
All executives receive a base salary and are
also eligible to participate in short-term and,
in some cases, long-term incentive plans
under which participants are rewarded
for their achievement of key performance
and operating results on a qualitative and
a quantitative basis. The performance
of executives is also assessed against a
range of risk and non-financial indicators of
performance, including an assessment of
performance and behaviour with reference
to Heartland’s values. Non-financial
performance measures play a key role in the
assessment of performance.
For Heartland Bank Australia executives,
their assessment against the Gateways and
conduct outcomes are also assessed by
the Consequence Management Committee
(CMC), who reports back to the Heartland
Bank Australia PRNCo. The Heartland Bank
Australia PRNCo considers the report
from the CMC before recommending
remuneration outcomes for Heartland Bank
Australia executives for approval. For those
Heartland Bank Australia executives who are
“accountable persons” under the Financial
Accountability Regime, variable remuneration
may be subject to deferral requirements in
accordance with applicable law.
Fixed remuneration
Fixed remuneration includes base salary and
is intended to compensate each executive for
the performance of the core requirements of
their role. Employer contribution to KiwiSaver
for New Zealand executives (as applicable) or
superannuation for Australian executives is
paid in addition to base salary.
The approach is to set executive base salaries
against the relevant market benchmarks,
but it is recognised that flexibility may be
necessary to adjust for factors including
experience, exceptional performance and a
competitive market.
Fixed remuneration may also include the use
of a company vehicle for certain executives.
Short-term incentives (STIs)
All permanent Executives of the Group who
meet the requirements and eligibility criteria
for Heartland’s STI plan are able, at the
discretion of the Heartland Board, to receive
STIs which are cash payments.² The STI plan
is designed to reward eligible executives
(and other employees) for performance
that is aligned to Heartland’s strategy and is
conducted in accordance with its values.
STI payments are entirely discretionary and
are not guaranteed, even if the relevant
executive’s KPIs have been exceeded. This is
because the STI pool and whether STIs are
paid at all is determined with reference to a
range of factors during the relevant financial
year. These factors include the financial
performance of the Group, achievement
of business plans and strategic objectives
(financial and non-financial performance
measures), the management of risk and
adherence to compliance and conduct
expectations.
Where STI payments are approved, they are
paid following the end of a financial year to
recognise executives who have exceeded
performance and behavioural or leadership
expectations during that financial year.
The proportion of each eligible employee’s
total remuneration paid as a STI increases in
line with the seniority and responsibility of
their role. Discretionary STI payment quantum
is appropriate to the level of responsibility.
Where applicable, STI payments for
executives may be up to 75% of fixed
remuneration, depending upon the role.
DISCLOSURES
68
Heartland LTI scheme
Original Plan and forfeiture of FY2025 scheme
Certain executives (and other senior
employees) across the Group may be eligible
for participation in Heartland’s LTI scheme to
(amongst other things) align their interests
with shareholders' interests and encourage
longer term decision making.
Heartland historically operated a LTI plan
known as the Heartland Group Holdings
Limited Performance Rights Plan (Original
Plan), which was established pursuant to
the Rules of the Original Plan dated 2018, as
amended on 30 April 2024.
Under the Original Plan, selected executives
and certain other senior employees of the
Group were issued performance share rights
(PSRs). The PSRs converted to ordinary
shares in Heartland for nil consideration,
subject to certain vesting conditions being
met in relation to financial performance,
strategic initiatives and adherence to
compliance and conduct expectations. A
Total Shareholder Return (TSR) hurdle was
also applicable and acted as a gateway in
respect of the determination of vesting
outcomes.
The last LTI scheme issued under the Original
Plan saw PSRs granted to Participants in the
second half of calendar year 2022. No new LTI
schemes were issued under the Original Plan
during FY2024 and FY2025.
The LTI plan entitlements issued under the
Original Plan and eligible for vesting in FY2025
(FY2025 Scheme) have not vested due to
the TSR hurdle not being met. All PSRs have
therefore been forfeited, and no Heartland
shares will be issued to Participants.
The FY2025 Scheme was the last remaining
scheme on issuance under the Original Plan.
Following the forfeiture of the FY2025 Scheme,
the Heartland Board resolved to terminate the
Original Plan on 25 September 2025.
New Plan
As was indicated in Heartland’s FY2024
Annual Report, Heartland has developed
a new LTI scheme (New Plan), which was
established pursuant to the Heartland Group
Holdings Limited – Performance Share Rights
Plan Rules (New Plan Rules) with effect on
and from 25 September 2025.
Selected executives and certain other senior
employees of the Group may be invited by
the Heartland Board to participate in the
New Plan and be issued PSRs. The PSRs will
convert into ordinary shares in Heartland for
nil consideration, subject to the achievement
of the following performance hurdles, which
are a combination of financial and behavioural
measures (together, the Performance
Hurdles).
• TSR – Heartland’s TSR for the
measurement period being equal to or
greater than a percentage per annum
determined by the Heartland Board,
compounded annually. TSR is used by
Heartland to measure how much value
has been delivered to its shareholders
over the measurement period, and takes
into account the following during the
measurement period:
ʂthe increase in the price of a Heartland
ordinary share; and
ʂthe gross dividends and other
distributions that Heartland has paid to
its shareholders.
• ROE – Heartland’s underlying ROE:
ʂincreasing year on year for each of the
financial years during the measurement
period; and
ʂbeing equal to or greater than an exit
underlying ROE percentage determined
by the Heartland Board at the end of the
measurement period.
• Risk and Compliance – contribution
to a healthy risk culture and stable
control environment throughout the
measurement period.
• Conduct and Culture – demonstration of
certain conduct and culture behaviours.
In terms of the operation of the New Plan
generally, as at the relevant measurement
date, if the:
• Performance Hurdles are all met in relation
to a particular scheme, then 100% of the
PSRs on issue will vest
• TSR Performance Hurdle is not met, then
0% of the PSRs will vest
3 Employer contribution to KiwiSaver is paid in addition to any STI cash payment.
69
• TSR Performance Hurdle is met, but the ROE
Performance Hurdle, Risk and Compliance
Performance Hurdle or Conduct and
Culture Performance Hurdle are not met,
then such percentage of the PSRs as is
considered appropriate by the Heartland
Board, in its sole discretion, will vest.
While achievement of the TSR and ROE
Performance Hurdles will be objectively
assessed by the Heartland Board with
reference to Heartland’s share price
performance and financial results over the
measurement period for each Performance
Hurdle, the Risk and Compliance and
Conduct and Culture Performance Hurdles
will be assessed by the Heartland Board with
reference to the performance of the Group
generally and each Participant’s personal
performance and behaviours over the
measurement period for those Performance
Hurdles.
PSR issuances can be up to 75% of an eligible
executive’s base salary and 30% of an eligible
senior manager’s base salary.
The Heartland Board has not yet approved
the issuance of any PSRs under the New
Plan Rules. However, it currently expects
to complete an issuance prior to the end of
calendar year 2025 to certain executives and
senior managers across the Group.
Subject to an issuance being completed,
details of the Performance Hurdles and other
key terms and conditions attached to any
PSRs and applicable to executive Participants
generally will be disclosed in Heartland’s
Annual Report for FY2026.
External and Independent Advice
During FY2025, Heartland Bank Australia
sought external and independent advice from
Aon to support decision making in relation to
executive remuneration structure and levels,
with reference to market benchmarking.
CEO remuneration arrangements
and outcomes
During FY2025, two individuals held the office
of Heartland CEO:
• the current Heartland CEO - Andrew Dixson,
who was appointed as Heartland CEO with
effect from 1 October 2024 and continues to
hold this office
• the former Heartland CEO - Jeff Greenslade,
who during FY2025 held the office of
Heartland CEO from 1 July 2024 until his
retirement on 30 September 2024.
Accordingly, this Annual Report includes
information in respect of the remuneration of
each of these individuals in their capacity as
Heartland CEO during FY2025.
The remuneration for Heartland’s CEO includes
a fixed remuneration component and a
variable remuneration component, ordinarily
comprising STIs and LTIs.
CEO remuneration arrangements
Heartland’s Remuneration Policy, STI plan and
LTI scheme, each of which is described above,
also apply to the Heartland CEO. A copy of the
Remuneration Policy is available on Heartland’s
website at heartlandgroup.info.
Fixed remuneration
Fixed remuneration consists of a package
of base salary and standard employment-
associated benefits, being payment of
employer contribution to KiwiSaver and a
company vehicle. Heartland utilises external
benchmarking in determining the Heartland
CEO’s remuneration.
Variable remuneration
STI scheme
The CEO is eligible to receive STIs which
are cash payments³ at the discretion of the
Heartland Board.
STI payments are entirely discretionary
and are not guaranteed, even if the CEO’s
KPIs have been met or exceeded. This is
because the STI pool and whether STIs are
paid at all is determined with reference to a
range of factors during the relevant financial
year, including the financial performance
of the Group, achievement of business
plan and strategic objectives (financial
and non-financial performance measures),
the management of risk and adherence to
compliance and conduct expectations. Where
a CEO STI payment is approved, it is paid
following the end of a financial year.
4 Andrew Dixson received a one-off special exertion payment of $196,875 in December 2024 in recognition of his significant additional efforts
over an extended period in his role as Group Chief Financial Officer in relation to the acquisition of (now) Heartland Bank Australia which
completed on 30 April 2024. This one-off special exertion payment was paid during FY2025 but was earned during previous reporting periods
at which time Andrew Dixson was not the Heartland CEO. Accordingly, this payment is excluded from the Current CEO remuneration table on
page 71.
DISCLOSURES
70
Discretionary STI payment quantum is
appropriate to the level of responsibility. The
Heartland CEO has the greatest bearing on
creating shareholder value over time, and
a significant part of the Heartland CEO’s
remuneration should depend upon the
creation of that value. Where applicable, STI
payments to the Heartland CEO may be up to
100% of fixed remuneration.
LT I s c h e m e
Original Plan and forfeiture of
FY2025 Scheme
As advised:
• in Heartland’s FY2024 Annual Report, the
FY2025 Scheme entitlements eligible for
vesting to the former Heartland CEO (Jeff
Greenslade) were forfeited and he did not
receive a grant of PSRs in FY2025 (see page
69 of the FY2024 Annual Report for further
information)
• on page 68, the FY2025 Scheme has not
vested due to the TSR hurdle not being
met. All remaining PSRs under the FY2025
Scheme have therefore been forfeited,
including those held by the current
Heartland CEO (Andrew Dixson), and no
Heartland shares will be issued to him.
Following the forfeiture of the FY2025 Scheme,
the Heartland Board resolved to terminate the
Original Plan on 25 September 2025.
New Plan
Detailed information in relation to Heartland’s
New Plan is available on pages 68 to 69.
The Heartland CEO is eligible to participate in
the New Plan and may be issued PSRs under
the New Plan on the terms and conditions
described above, at the discretion of the
Heartland Board. PSR issuances can be up to
100% of the Heartland CEO’s remuneration.
As discussed above, the Heartland Board
has not yet approved the issuance of any
PSRs under the New Plan Rules. However, it
currently expects to complete an issuance
prior to the end of calendar year 2025. The
issuance is expected to include the current
Heartland CEO.
Subject to an issuance being completed,
details of the Performance Hurdles and other
key terms and conditions attached to any
PSRs issued to the current Heartland CEO will
be disclosed in Heartland’s Annual Report for
FY2026.
CEO remuneration outcomes
Fixed remuneration
The fixed remuneration paid to each
individual who served as Heartland CEO
(including any employment-associated
benefits) during FY2025 is set out in the
tables below. The amounts included are
the actual amounts received for the period
during which the individual held the office of
Heartland CEO during FY2025.
Variable remuneration⁴
STI
The Board determined that an STI award in
respect of FY2025 had been earned by the
current Heartland CEO (Andrew Dixson), and
an STI of $350,000 was paid to him as cash
remuneration in September 2025 in relation
to FY2025.
No STI award was paid to the former
Heartland CEO (Jeff Greenslade) in respect
of FY2025.
LT I
As discussed above, the PSRs issued under
the FY2025 Scheme to both the current
Heartland CEO (Andrew Dixson) and the
former Heartland CEO (Jeff Greenslade)
and eligible for vesting in FY2025 have been
forfeited.
Neither the current Heartland CEO (Andrew
Dixson) nor the former Heartland CEO (Jeff
Greenslade) hold any PSRs, and neither of
them has any remaining entitlement under
the Original Plan which has been terminated.
As discussed above, subject to an issuance
being completed under the New Plan, details
of the Performance Hurdles and other key
terms and conditions attaching to any PSRs
issued to the current Heartland CEO (Andrew
Dixson) will be disclosed in Heartland’s
Annual Report for FY2026.
5 Inclusive of 3% employer contribution to KiwiSaver.
6 Andrew Dixson was appointed as Heartland CEO on 1 October 2024. Accordingly, fixed remuneration, STI and LTI disclosure is with reference
to the period from 1 October 2024 to 30 June 2025, and no comparative information is included.
7 Exclusive of 3% employer contribution to KiwiSaver.
8 Exclusive of 3% employer contribution to KiwiSaver.
9 Actual salary paid for the period from 1 October 2024 to 30 June 2025, based on an annual salary of $630,000.
10 Jeff Greenslade retired as Heartland CEO on 30 September 2024. Accordingly, fixed remuneration, STI and LTI disclosure is with reference to
the period from 1 July 2024 to 30 September 2024, and comparative information is included for FY2024.
11 Includes non-cash benefits of $144,750.
12 Exclusive of 3% employer contribution to KiwiSaver.
13 Actual salary paid for the period from 1 July 2024 to 30 September 2024, based on an annual salary of $1,100,000. This amount also includes
payment of all accrued but unused annual leave and long service leave as at his retirement.
14 Inclusive of 3% employer contribution to KiwiSaver.
71
Retirement payment, including non-cash
benefits – former Heartland CEO
During the fourth quarter of the 2024
calendar year, the former Heartland CEO
(Jeff Greenslade) received a retirement
payment, including non-cash benefits as
follows:
• a cash payment of $3,983,647, which
included $807,326 in lieu of notice;⁵ and
• non-cash benefits of $144,750.
Current CEO remuneration (part FY2025) – Andrew Dixson⁶
Ye a rFixed remunerationShort Term Incentive
(STI)⁷
Total cash-
based
remuneration
earned
Long Term incentive
(LTI)
Total
Base
salary⁸
Other
benefits
EarnedAmount
earned
as a % of
maximum
award
Number
of shares
vested
% of maximum
awarded for
the relevant
performance
period
(Fixed rem +
STI earned +
LT I v e s t e d)
FY2025$450,692⁹ $10,800$350,00056%$811,492-N/A$811,492
Former CEO remuneration (part FY2025 and FY2024) – Jeff Greenslade¹⁰
Ye a rFixed remunerationS h o r t Te r m
Incentive (STI)
Retirement
payment,
including
non-cash
benefits
Total
cash-based
remuneration
earned¹¹
Long Term incentive
(LTI)
Total
Base
salary¹²
Other
benefits
EarnedAmount
earned
as a % of
maximum
award
Number
of
shares
vested
% of
maximum
awarded for
the relevant
performance
period
(Fixed rem +
STI earned +
Retirement
Payment,
including
non-cash
benefits +
LT I v e s t e d)
FY2025$571,891¹³$10,800-0%$4,128,397
(Comprised
of a cash
payment of
$3,983,647,
which
included
$807,326
in lieu of
notice¹⁴ and
non-cash
benefits of
$144,750)
$4,711,088-N/A$4,711,088
FY2024$1,089,200$10,800-0%-$1,100,000-N/A$1,100,000
15 The FY2025 data is with reference to the current Heartland CEO (Andrew Dixson) who was appointed CEO on 1 October 2024. Accordingly,
the FY2025 total CEO remuneration is with reference to the period from 1 October 2024 to 30 June 2025. The FY2024 data is with reference to
the former Heartland CEO (Jeff Greenslade).
DISCLOSURES
72
ESG disclosures
CEO/worker ratio
The pay gap represents the number of times
greater the Heartland CEO’s remuneration is
to the remuneration of an employee paid at
the median of all Group employees.
For the purposes of determining the median
pay of all Group employees, all permanent
full time, permanent part time and fixed
term employees are included, with part time
employee remuneration adjusted to a full-
time equivalent amount.
As at 30 June 2025, the current Heartland
CEO’s salary of $630,000 was 6.6 times
(FY2024: 9.5 times) that of the median
employee at $95,000 per annum. The current
Heartland CEO’s total remuneration of
$811,492 was 8.5 times (FY2024: 9.5 times) the
total remuneration of the median employee
at $95,000.¹⁵
Pay gap reporting
Please refer to page 35 of this Report for
Heartland’s pay gap reporting.
Remuneration bands
The following table notes the number of
employees or former employees of Heartland,
Heartland Bank and Heartland Bank Australia,
not being directors of Heartland, who during
FY2025, received remuneration and any other
benefits in their capacity as employees, the
value of which was or exceeded $100,000 per
annum, in brackets of $10,000.
Remuneration bandsHeadcount
$100,000 - $109,99930
$110,000 - $119,99924
$120,000 - $129,99923
$130,000 - $139,99934
$140,000 - $149,99924
$150,000 - $159,99925
$160,000 - $169,99915
$170,000 - $179,99913
$180,000 - $189,9999
$190,000 - $199,99911
$200,000 - $209,99913
$210,000 - $219,99910
$220,000 - $229,9994
$230,000 - $239,9996
$240,000 - $249,9992
$250,000 - $259,9995
$260,000 - $269,9994
$270,000 - $279,9993
$290,000 - $299,9991
$300,000 - $309,9991
$310,000 - $319,9991
$320,000 - $329,9991
$330,000 - $339,9992
$360,000 - $369,9992
$390,000 - $399,9992
$400,000 - $409,9992
$410,000 - $419,9992
$470,000 - $479,9991
$480,000 - $489,9992
$490,000 - $499,9992
$520,000 - $529,9991
$540,000 - $549,9991
$550,000 - $559,9991
$610,000 - $619,9991
$660,000 - $669,9991
$670,000 - $679,9991
$680,000 - $689,9991
$710,000 - $719,9992
$820,000 - $829,9991
$1,180,000-$1,189,9992
$1,270,000-$1,279,9991
$1,940,000-$1,949,9991
Total employees288
16 The current Heartland CEO and Heartland Bank CEO are each non-executive directors of Heartland Bank Australia, but do not receive any
additional remuneration in this capacity.
17 If a director sits on both the Heartland and Heartland Bank Boards, they are only entitled to receive one full fee but receive an additional part
fee as set out in the table.
18 The current Heartland CEO and Heartland Bank CEO are each non-executive directors of Heartland Bank Australia, but do not receive any
additional remuneration in this capacity.
73
Director remuneration
Director Remuneration Policy
As discussed on page 65, the Remuneration
Policy explains the Group’s remuneration
strategy and approach to setting
remuneration for directors. A copy of
the Remuneration Policy is available on
Heartland’s website at heartlandgroup.info.
Total remuneration available to the Group’s
non-executive directors is determined by
Heartland’s shareholders.
At the 2023 Annual Meeting, shareholders
approved a resolution to increase the pool
available to all non-executive directors to
$2,400,000 or AU$2,200,000 (whichever is
the greater amount from time to time). There
has been no change to the approved director
fee pool since this date, and no director
remuneration increases are being sought at
the 2025 Annual Meeting.
Heartland’s policy is to pay directors’ fees in
cash, rather than in shares or share options.
Non-executive directors are not eligible
for participation in Heartland’s LTI scheme,
unless they are also the CEO of Heartland,
Heartland Bank or Heartland Bank Australia, in
which case their participation in Heartland’s
LTI scheme is in their executive capacity, not
in their capacity as a non-executive director.
There is no requirement for directors to take
a portion of their remuneration in shares nor
is there a requirement for directors to hold
shares in Heartland. However, as at 30 June
2025, a number of the directors held shares,
or a beneficial interest in shares, in Heartland
(see the Directors’ Disclosures section on
page 60 of this Annual Report for further
d e t a i l s).
Director remuneration outcomes
The table below sets out a breakdown of
the Board and Committee fees paid to
the non-executive directors of Heartland,
Heartland Bank and Heartland Bank Australia
(as applicable) for FY2025 based on the
position(s) held.¹⁶
Board/
Committee¹⁷
Position Fees (per
annum)
Board of Directors
– Heartland and
Heartland Bank
Chair$175,000
Member$120,000
Board of Directors
– Heartland Bank
Australia
ChairAU$320,000
MemberAU$155,000
Board Member of
Heartland Bank
Board, where
also a member of
Heartland Board
Member$25,000
Heartland Bank
Australia Board
member, where
also Heartland
Bank Chair
MemberAU$35,000
Heartland Audit &
Risk Committee
Chair$20,000
MemberNil
Heartland
Sustainability
Committee
Chair$20,000
MemberNil
Heartland Bank
Audit Committee
Chair$20,000
Member Nil
Heartland Bank
Risk Committee
Chair$20,000
Member Nil
Heartland Bank
People & Culture
and Remuneration
Committee
Chair$20,000
Member Nil
Heartland Bank
Australia Audit
Committee
ChairAU$25,000
Member Nil
Heartland Bank
Australia Risk
Committee
ChairAU$25,000
Member Nil
Heartland Bank
Australia People,
Remuneration
and Nominations
Committee
ChairAU$25,000
Member Nil
The total remuneration received by each
non-executive director¹⁸ who held office in
Heartland and/or any of its subsidiaries during
FY2025 is set out in the table below. Directors’
fees exclude GST where appropriate.
19 For the purposes of the total remuneration column in this table, AU$ fees have been converted to NZ$ using an exchange rate of $1.07819
and then rounded.
20 Fees paid to A J Aitken as a director of MARAC Insurance Limited (MIL). A J Aitken retired from the MIL Board on 31 July 2025.
21 Fees paid to C R Mace as a director of MIL. C Mace retired from the MIL Board on 14 April 2025.
22 Fees paid to R G Udovenya as a director of ASF Custodians Pty Limited. R G Udovenya retired as a director of ASF Custodians Pty Limited on
31 January 2025.
DISCLOSURES
74
Director Board feesHeartland
Audit & Risk
Committee
Heartland
Sustainability
Committee
Heartland
Bank Audit
Committee
Heartland
Bank Risk
Committee
Heartland
Bank People
& Culture and
Remuneration
Committee
Heartland Bank
Australia Audit
Committee
Heartland Bank
Australia Risk
Committee
Heartland
Bank Australia
People,
Remuneration
and
Nominations
Committee
Additional
Board fee
Total
remuneration¹⁹
Heartland, Heartland Bank and Heartland Bank Australia directorships
S Beckett$120,000----
-----$120,000
R A Bell$120,000---------$120,000
S M BuggleAU$155,000-----$25,000---$194,074
E J Harvey$120,000$20,000-------$25,000$165,000
B R Irvine$175,000--- -$20,000---AU$35,000$232,737
L McGrathAU$155,000------$25,000-- $194,074
K Mitchell $120,000-$20,000------$25,000$165,000
S M Ruha$120,000---$20,000-----$140,000
G R Tomlinson$175,000---------$175,000
S R Tyler$120,000-- $20,000------$140,000
G E SummerhayesAU$320,000---------$345,021
V Z YuAU$155,000-------$25,000-$194,074
Other subsidiary directorships
A J Aitken²⁰$32,000----
-----$32,000
C R Mace²¹$11,786--------- $11,786
R G Udovenya²²AU$17,637--------- $19,016
To t a l$2,247,782
Directors' fees
75
Director Board feesHeartland
Audit & Risk
Committee
Heartland
Sustainability
Committee
Heartland
Bank Audit
Committee
Heartland
Bank Risk
Committee
Heartland
Bank People
& Culture and
Remuneration
Committee
Heartland Bank
Australia Audit
Committee
Heartland Bank
Australia Risk
Committee
Heartland
Bank Australia
People,
Remuneration
and
Nominations
Committee
Additional
Board fee
Total
remuneration¹⁹
Heartland, Heartland Bank and Heartland Bank Australia directorships
S Beckett$120,000----
-----$120,000
R A Bell$120,000---------$120,000
S M BuggleAU$155,000-----$25,000---$194,074
E J Harvey$120,000$20,000-------$25,000$165,000
B R Irvine$175,000--- -$20,000---AU$35,000$232,737
L McGrathAU$155,000------$25,000-- $194,074
K Mitchell $120,000-$20,000------$25,000$165,000
S M Ruha$120,000---$20,000-----$140,000
G R Tomlinson$175,000---------$175,000
S R Tyler$120,000-- $20,000------$140,000
G E SummerhayesAU$320,000---------$345,021
V Z YuAU$155,000-------$25,000-$194,074
Other subsidiary directorships
A J Aitken²⁰$32,000----
-----$32,000
C R Mace²¹$11,786--------- $11,786
R G Udovenya²²AU$17,637--------- $19,016
To t a l$2,247,782
DISCLOSURES
76
Shareholder information
Spread of shares
Set out below are details of the spread of shareholders of Heartland as at 1 August 2025 (being a
date not more than two months prior to the date of this Annual Report).
Size of holding Number of shareholders Total shares % of issued shares
1 - 1,000 1,411 731,872 0.08
1,001 - 5,000 2,931 8,404,371 0.89
5,001 - 10,000 2,043 15,217,452 1.62
10,001 - 50,000 4,730 111,257,150 11.83
50,001 - 100,0001,114 78,499,416 8.35
Greater than 100,000866726,448,65077.23
Total 13,095940,558,911 100.00
Twenty largest shareholders
Set out below are details of the 20 largest shareholders of Heartland as at 1 August 2025 (being a
date not more than two months prior to the date of this Annual Report).
RankShareholderTotal shares % of issued capital
1 Tomlinson Group HGH Limited 83,335,936 8.86
2 Accident Compensation Corporation 54,029,610 5.74
3 HSBC Nominees (New Zealand) Limited 52,716,781 5.6
4 FNZ Custodians Limited 48,473,790 5.15
5 New Zealand Depository Nominee 38,117,192 4.05
6 Citibank Nominees (NZ) Ltd 34,070,901 3.62
7 Bnp Paribas Nominees NZ Limited Bpss40 31,111,698 3.31
8 Custodial Services Limited 24,735,761 2.63
9 Forsyth Barr Custodians Limited 20,994,066 2.23
10 Tea Custodians Limited 15,507,951 1.65
11 Philip Maurice Carter 14,972,472 1.59
12 Jns Capital Limited 9,137,180 0.97
13 Onepoto Investments Holdings Limited 8,557,044 0.91
14 Pt Booster Investments Nominees Limited 8,141,226 0.87
15 Maxima Investments Limited 8,000,000 0.85
16 Heartland Trust 6,504,266 0.69
17 FNZ Custodians Limited 5,405,653 0.57
18 David Lyall Holdings Limited 5,200,000 0.55
19 Nzx Wt Nominees Limited 4,507,655 0.48
20 Premier Nominees Limited 4,025,002 0.43
Total477,544,184 50.75
1 As disclosed by Tomlinson Group HGH Limited to Heartland and the NZX Limited on 6 March 2025. On 6 March 2025, Harrogate Trustee
Limited transferred all of its shares in Heartland to Tomlinson Group HGH Limited, a wholly owned subsidiary of Harrogate Trustee Limited,
with no change to the underlying beneficial ownership.
2 As disclosed by Accident Compensation Corporation to Heartland and the NZX Limited on 13 February 2025.
77
Substantial product holders
As at 30 June 2025, Heartland had 940,558,911 ordinary shares on issue and, according to
Heartland’s records and disclosure notices provided to Heartland, the following entities were
substantial product holders of Heartland.
NameNumber of shares Class of shares
% of total number of
shares in class
Tomlinson Group HGH Limited 83,335,936¹ Ordinary 8.86
Accident Compensation Corporation 47,119,131² Ordinary 5.01
Significant influence
Under the Banking (Prudential Supervision) Act 1989, a person must obtain the prior written consent
of the RBNZ before acquiring an interest of 10% or more in Heartland.
Auditor ’s fees
PwC has continued to act as auditor of
Heartland and its New Zealand subsidiaries.
The amount payable by Heartland and its New
Zealand subsidiaries to PwC as audit fees
during FY2025 was $1,285,000. The amount
of fees payable to PwC for non-audit work
during FY2025 was $84,000. These non-audit
fees were primarily for assurance services
on greenhouse gas emissions reporting,
registry assurance, trust deed reporting, and
the provision of an executive reward survey
report.
PwC were appointed as auditor of Heartland’s
Australian subsidiaries commencing 1 May
2025. The amount payable by Heartland’s
Australian subsidiaries to PwC as audit fees
during FY2025 was $582,000. The amount
of fees payable to PwC for non-audit work
during FY2025 was $200,000. These non-audit
fees were primarily for regulatory assurance
services (including Economic and Financial
Statistics regulatory reporting), Australian
Financial Services Licence reporting and other
agreed upon procedures.
Credit rating
As at the date of this Annual Report, Heartland
has a Fitch Australia Pty Limited long-term
credit rating of BBB (outlook stable).
Donations
Heartland made no donations during FY2025.
The total amount of donations made by
Heartland Bank during FY2025 was $7,350. The
total amount of donations made by Heartland
Bank Australia during FY2025 was $1,000. No
political donations were made by the Group in
FY2025.
Exercise of NZX disciplinary
powers
NZX Limited did not exercise any of its powers
under Listing Rule 9.9.3 in relation to Heartland
and its subsidiaries during FY2025.
NZX waivers
No waivers were granted to Heartland or relied
on by Heartland during FY2025.
Other information
05
Financial
results
For the year ended 30 June 2025
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 for FY2025
(which are non-GAAP financial information) exclude the impact of one-off regulatory assurance costs arising in relation to the acquisition of
(now) Heartland Bank Australia, one-off staff exit costs, the de-designation of derivatives, fair value changes on equity investments held, other
non-recurring costs and other impacts of non-recurring income. The use of underlying results is intended to allow for easier comparability
between periods and is used internally by management for this purpose. Information on the presentation of results, a summary of reported and
underlying results, details about FY2025 one-offs, details about FY2024 one-offs and general information about the use of non-GAAP financial
measures is available in Heartland’s FY2025 investor presentation (IP) available at heartlandgroup.info.
2 All comparative figures and percentage increases or decreases are against FY2024, unless explicitly stated otherwise.
3 Exit margin is the NIM on the last day in the reporting period.
4 Industry average arrears are based on auto arrears as at June 2025, reported by Centrix in its Credit Insights Report, July 2025.
5 Unsecured Lending includes Open for Business and Personal Lending portfolios which are winding down.
79
Financial commentary
Following a year of significant reset, change and integration, Heartland’s (NZX/ASX: HGH) N PAT
for FY2025 was $38.8 million. On an underlying basis¹, 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 performance²
• After a reset of some of its New Zealand
lending portfolios in 1H2025, Heartland
substantially met its financial performance
outlooks for 2H2025 (2H2025 Outlooks).
• Superior margin restored, with NIM up
17 basis points (bps) to 3.56% and each
bank ending FY2025 with a strong exit
margin³ (4.13% in New Zealand and 3.59% in
A u s t r a l i a).
• Operating expenses (OPEX) were up
$53.2 million (38.1%) primarily due to
non-repeating benefits in FY2024, the
cost base of the 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 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.⁴
• An increased focus on capital optimisation
through several key initiatives by Heartland
Bank and accelerated 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 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 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 Lending⁵ 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
6 Underlying CTI ratio refers to the CTI ratio calculated using underlying results. When calculated using reported results, Heartland Bank’s CTI
ratio was 56.4%, up 10.9% compared with FY2024, and Heartland Bank Australia’s CTI ratio was 52.0%, up 3.85% compared with FY2024. For
more information, see page 4 of Heartland’s FY2025 IP.
FINANCIAL RESULTS
80
cancellation of its licence, and reducing its
stake in Harmoney Corp Limited (Harmoney)
to below 10%, Heartland Bank released $9.8
million of capital in FY2025 with a further $4
million expected in the first half of FY2026.
In the first quarter of FY2026, Heartland
completed the full sale of its Harmoney
shareholding. This activity, together with NSA
realisation, has strengthened Heartland’s
capacity for organic growth and future
capital investment.
NZ Banking
NIM
FY2024 1Q2025 2Q2025 3Q2025 4Q2025 2H2025
Outlook
2H2025 FY2025
Average NIM 3.79% 3.82% 3.79% 3.92% 4.18% > 3.90% 4.05% 3.87%
Exit NIM 3.84% 3.82% 3.89% 3.93% 4.13% > 4.00% 4.13% 4.13%
NIM continued to expand and met the 2H2025 Outlook, driven by an improved cost of funds,
growth in higher margin lending portfolios and accelerated realisation of NSAs.
Costs
FY2024 1H2025 2H2025 Outlook 2H2025 FY2025
Reported OPEX $104.5m $63.1m No outlook provided $68.7m $131.8m
Underlying OPEX $102.8m $62.1m $66.1m $66.0m $128.1m
Underlying CTI ratio⁶ 43.2% 53.2% 57.5% 56.4% 54.8%
Cost growth stabilised in 2H2025 as
underlying OPEX and the underlying CTI ratio
met the 2H2025 Outlooks. OPEX increased
$27.3 million (26.1%) to $131.8 million in FY2025.
On an underlying basis, OPEX increased by
$25.3 million (24.7%) to $128.1 million. The
increase was driven by:
• $7.2 million due to the reallocation of
teams providing support functions from
Heartland Group to Heartland Bank as a
condition of the ADI acquisition – this is
cost neutral to the Group
• $6.3 million amortisation of Heartland
Bank’s core banking system upgrade
completed in late 2023
• $4.7 million of non-repeating FY2024
benefits – this relates to costs capitalised
to projects in FY2024 that did not occur in
FY2025, the non-payment of short-term
incentives and reversal of LTI accruals in
FY2024
• $4.1 million investment in core functions
to enable higher quality growth and
address additional regulatory oversight
responsibilities arising from owning an ADI.
Asset
quality
FY2024 1Q2025 2Q2025 3Q2025 4Q2025 2H2025
Outlook
2H2025 FY2025
Reported
impairment
expense ratio
0.92% 1.02% 2.97% 0.92% 0.70%
No
outlook
provided
0.81% 1.40%
Underlying
impairment
expense ratio
0.60% 0.77% 3.32% 0.92% 0.70% > 0.85% 0.81% 1.40%
Heartland Bank’s overall asset quality
improved over FY2025 and the underlying
impairment expense ratio met the 2H2025
Outlook. The non-performing loan (NPL) ratio
improved by 44 bps from 3.65% as at 30 June
2024 to 3.21% as at 30 June 2025. Excluding
81
NSAs and Unsecured Lending, Heartland
Bank’s NPL ratio strengthened by 30 bps from
2.70% as at 30 June 2024 to 2.40% as at 30
June 2025.
Changes made to Heartland Bank’s
collections, recoveries and write-off
strategies have had a positive effect on the
Motor Finance⁷ portfolio. As at 30 June 2025,
the portfolio had no loans greater than 365
days past due (DPD). Motor Finance NPLs
between 180 and 364 DPD have reduced from
$20 million as at 30 June 2024 to $13 million as
at 30 June 2025. Heartland Bank is on track to
have no Motor Finance arrears greater than
180 DPD by 30 June 2026. The flow through of
arrears has also reduced, with loans between
5 and 89 DPD down from $85 million (4.81%)
to $76 million (4.51%) over the same period.
The Motor Finance NPL ratio was 2.24%,
down from 3.67% in FY2024. As at 30 June
2025, Heartland Bank’s total Motor Finance
arrears of 5.2% (as per Centrix’s measure of
arrears greater than or equal to 14 DPD) is now
performing better than the industry average
of 5.4%.⁴
The recovery rate on loans written off
in FY2025 exceeded Heartland’s initial
expectations. As at 30 June 2025, $4.2
million had been recovered. Heartland
Bank anticipates $2.7 million of additional
recoveries from loans written off in FY2025.
Due to Heartland Bank’s enhanced recovery
management strategy, a further $2.9 million
is estimated to be recovered from accounts
transferred to debt collection agencies in
2H2025.
The Reverse Mortgage NPL ratio remains
very low at 0.17%⁸ and the weighted average
current loan-to-value ratio (LVR) for this
portfolio remains strong at 25.3%.⁹
Rural¹⁰ asset quality also improved as rural
trading conditions strengthened, largely off
the back of stronger international commodity
prices. The Rural NPL ratio¹¹ was 0.90%, down
from 2.42% in FY2024.
Notwithstanding improved overall asset
quality, largely driven by Heartland Bank’s
consumer and rural sectors, economic
conditions for the business sector remain
challenging. This is particularly relevant for
businesses in the construction, property,
hospitality and transportation industries
which constitute a significant portion
of Heartland Bank’s Business Finance¹²
portfolio. Centrix reported that New Zealand
business operating conditions in June 2025
saw a 26% increase year-on-year in company
liquidations and a 14% increase year-on-year
in business defaults.¹³ These conditions
contributed to the increase in impairments
and provisions seen across the Business
Finance portfolio in 1H2025 which continued
into 2H2025.
The Business Finance portfolio remains
appropriately provisioned recognising the
secured nature of this lending. While NPLs
increased from $42 million as at 30 June 2024
to $58 million as at 30 June 2025, early-stage
arrears (less than 90 DPD) decreased from
$50 million as at 30 June 2024 to $43 million¹¹
due to changes made to the strategy and
timing of intervention measures.
Core lending performance
Reverse Mortgage Receivables were up $165
million (15.5%) from 30 June 2024 to $1.23
billion as at 30 June 2025, reflecting the
ongoing demand for this product.
Rural Receivables were up $29 million (4.9%)
from 30 June 2024 to $609 million as at
30 June 2025. Rural growth was driven by
Livestock Finance Receivables growth of
$36.4 million (18.4%) from 30 June 2024 to
$235 million as at 30 June 2025.
Motor Finance Receivables were down $77
million (4.3%) from 30 June 2024 to $1.69
billion as at 30 June 2025. This is in part due
to ongoing subdued economic conditions,
and as lending origination shifted to higher
quality channels.
Asset Finance Receivables were down
$123.9 million (16.8%) from 30 June 2024 to
$613 million as at 30 June 2025. Heightened
competition together with subdued demand
in particular industry sectors saw Heartland
Bank prioritise support for existing customers
while retaining pricing discipline and a tight
risk appetite.
7 Motor Finance includes intermediary and direct distribution channels and Wholesale Lending.
8 Reverse Mortgages are measured at fair value. NPLs arise due to late settlement (90 days after the 12-month repayment period) after the
departure of the borrower from the property. As at 30 June 2025, the Heartland Bank Reverse Mortgage NPL ratio included 11 loans with a
total NPL value of $2.0 million and a weighted average LVR of 29.4%. The Heartland Bank Australia Reverse Mortgage NPL ratio included 64
loans with a total NPL value of AU$17.4 million and a weighted average LVR of 29.3%.
9 Measured using indexed valuation.
10 Rural includes Rural Relationship, Rural Direct and Livestock Finance.
11 Excluding NSAs.
12 Business Finance includes Asset Finance and Business Relationship lending.
13 Centrix Credit Insights Report, July 2025.
14 Heartland Bank Australia’s FY2024 underlying average NIM is adjusted for the impacts of the ADI acquisition. This adjustment refers primarily
to the inclusion of liquid assets from the ADI which earn a lower yield than receivables.
15 Australian Reverse Mortgage market share estimate based on APRA ADI data and public statements and internal estimates for non-bank
reverse mortgage lending.
FINANCIAL RESULTS
82
AU Banking
NIM
FY2024 1Q2025 2Q2025 3Q2025 4Q2025 2H2025
Outlook
2H2025 FY2025
Average NIM
Reported:
2.58%
2.58% 3.01% 3.31% 3.47% >3.30% 3.37% 3.01%
Underlying:
3.17%¹⁴
Exit NIM 2.84% 2.67% 3.13% 3.27% 3.59% >3.60% 3.59% 3.59%
Heartland Bank Australia’s successful funding transition, with deposits now making up 81% of
the bank’s funding, has provided a material NIM uplift. In 4Q2025, NIM expanded 89 bps when
compared with 1Q2025. Exit NIM of 3.59% was in line with the 2H2025 Outlook.
Costs
FY2024 1H2025 2H2025 Outlook 2H2025 FY2025
Reported OPEX AU$38.2m AU$24.2m No outlook provided AU$23.5m AU$47.7m
Underlying OPEX AU$31.1m AU$23.2m AU$23.4m AU$23.2m AU$46.4m
Underlying CTI ratio⁶ 48.2% 56.4% 47.8% 48.4% 52.0%
Costs have been tightly managed in
2H2025, with underlying OPEX meeting
2H2025 Outlook. Combined with growth and
margin uplift, this has delivered consistent
improvement in the CTI ratio across FY2025.
The underlying CTI ratio was slightly above
the 2H2025 Outlook due to lower Livestock
Finance revenue from higher repayments late
in FY2025.
OPEX increased by AU$9.4 million (24.6%) to
AU$47.7 million in FY2025. On an underlying
basis, OPEX increased by AU$15.3 million
(49.0%) to AU$46.4 million. The increase
reflects:
• the AU$15.2 million cost base of the ADI on
acquisition
• AU$3.1 million of investment in people to
enable growth and meet the regulatory
requirement for the bank to maintain its
own core functions such as finance and
risk
• AU$3.9 million of other costs including
lending origination costs in line with
Australian Reverse Mortgage volume
growth
• AU$1.3 million for the long-term renewal
of the current version of the core banking
system and to accommodate increased
volume from deposits.
Asset quality
Heartland Bank Australia’s lending portfolios
continue to show resilience and exhibit high
asset quality metrics. The Australian Reverse
Mortgage NPL ratio continues to be very low
at 0.88%⁸ and the weighted average current
LVR remains strong at 24.6%.⁹ Through
prudent management, Livestock Finance
NPLs reduced in 2H2025 to AU$36.4 million (or
1.62%) as at 30 June 2025, down from AU$64.4
million (3.26%) as at 30 June 2024. While
impairments remain low, they were higher
than expected with an impairment expense
ratio of 0.13% (up 9 bps from FY2024) due to
specific provisions being required for three
Livestock Finance customers. The Livestock
Finance portfolio is appropriately provisioned
in line with expected credit losses and
prevailing economic conditions.
Lending performance
Heartland Bank Australia’s Reverse Mortgage
portfolio exceeded the 2H2025 Outlook, with
Receivables up AU$309 million (18.5%) from 30
June 2024 to AU$1.98 billion as at 30 June 2025.
Despite heightened competition, Heartland
Bank Australia’s market share increased from
36% as at 31 March 2024 to 40% as at 31 March
2025¹⁵. It continues to be the leading provider
83
of reverse mortgages in Australia.
Heartland Bank Australia’s Livestock Finance
saw a return to growth with Receivables up
AU$3.7 million (1.5%) from 30 June 2024 to
AU$254 million as at 30 June 2025, and the
highest volume of new business written since
the financial year ending 30 June 2022, with
over one million livestock funded in FY2025
(up 36% on FY2024).
FINANCIAL RESULTS
84
Financial statements
for the year ended 30 June 2025
General Information
_________________________85
Auditor
__________________________________________85
Other Material Matters
______________________85
Directors
_______________________________________85
Directors’ Statements
______________________87
Statement of Comprehensive Income
__88
Statement of Changes in Equity
__________89
Statement of Financial Position
__________90
Statement of Cash Flows
____________________91
Notes to the Financial Statements
_______93
1 Financial statements preparation
_93
Performance
___________________________________98
2 Segmental analysis
__________________98
3 Net interest income
_________________100
4 Net operating lease income
________101
5 Other income
_________________________102
6 Operating expenses
________________103
7 Compensation of auditor
___________103
8 Impaired asset expense
____________105
9 Taxation
_______________________________106
10 Earnings per share
____________________107
Financial Position
____________________________108
11 Investments
___________________________108
12 Derivative financial instruments
__109
13 Finance receivables
measured at amortised cost
_______114
14 Operating lease vehicles
____________119
15 Borrowings
____________________________120
16 Share capital and dividends
_______123
17 Other reserves
_______________________124
18 Other balance sheet items
_________125
19 Acquisition
____________________________129
20 Related party transactions
and balances
__________________________131
21 Fair value
______________________________133
Risk Management
____________________________139
22 Enterprise risk management
program
_______________________________139
23 Credit risk exposure
_________________144
24 Liquidity and funding risk
___________149
25 Interest rate risk
_____________________ 151
Other Disclosures
____________________________154
26 Significant subsidiaries
_____________154
27 Structured entities
__________________154
28 Staff share ownership
arrangements
________________________156
29 Securitisation, funds management
and other fiduciary activities
______ 157
30 Concentrations of funding
_________158
31 Offsetting financial instruments
__159
32 Contingent liabilities and
commitments
________________________160
33 Events after reporting date
________160
Auditor’s Report
_____________________________ 161
85
GENERAL INFORMATION
These financial statements are issued by Heartland Group Holdings Limited (HGH) and its
subsidiaries (the Group) for the year ended 30 June 2025.
Name and address for service
The Group’s address for service is:
Level 3, 35 Teed Street, Newmarket, Auckland 1023.
Details of incorporation
HGH was incorporated under the Companies Act 1993 on 19 July 2018.
AUDITOR
PricewaterhouseCoopers
PwC Tower, Level 27
15 Customs Street West
Auckland 1010
OTHER MATERIAL MATTERS
On 1 July 2025, the Depositor Compensation Scheme (DCS) came into effect under the Deposit
Takers Act 2023. The DCS is a government-backed scheme, funded by deposit takers and ad-
ministered by the Reserve Bank of New Zealand (RBNZ). In the event of a deposit taker’s failure,
the scheme covers each eligible depositor with deposits held in DCS-protected accounts up to
$100,000 per deposit taker.
There are no other material matters relating to the business or affairs of the Group that are not
disclosed in these consolidated financial statements which, if disclosed, would materially affect
the decision of a person to subscribe for debt or equity instruments of which the Group is the
i s s u e r.
DIRECTORS
All Directors of HGH reside in New Zealand with the exception of Robert Bell and Simon Beckett
who reside in Australia. Communications to the Directors can be sent to Heartland Group
Holdings Limited, Level 3, 35 Teed Street, Newmarket, Auckland 1023.
Jeffrey Kenneth Greenslade retired as a Non-Independent Executive Director of HGH, effective
30 September 2024.
There have been no other changes to the composition of the Board of Directors of the Group for
the year ended 30 June 2025.
FINANCIAL RESULTS
86
DIRECTORS (CONTINUED)
The Directors of HGH and their details at the time these financial statements were signed were:
Chair - Board of Directors
Name: Gregory Raymond Tomlinson
Qualifications: AME
Type of Director: Non-Independent Non-Executive Director
Occupation: Company Director
External Directorships: Alta Cable Holdings Limited, Chippies Vineyard Limited, Indevin Group
Holdings Limited, Indevin Group Investments Limited, Indevin Group
Limited, Mountbatten Trustee Limited, Nearco Stud Limited, Oceania
Healthcare Limited, Pelorus Finance Limited, St Leonards Limited,
Tomlinson Group Argenta GP Limited, Tomlinson Group NZ Limited,
Tomlinson Holdings Limited, Tomlinson Group Investments Limited,
Tomlinson Ventures Limited, Terra Vitae Vineyards Limited, Brandywine
Vineyards Limited, Tomlinson Group HGH Limited.
Name: Simon Beckett
Qualifications: BSc (Hons), GAICD
Type of Director: Independent Non-Executive Director
Occupation: Company Director
External Directorships: ORDE Holdings Pty Ltd, ORDE Financial Pty Ltd, ORDE Capital
Management Limited, ORDE Mortgage Custodian Pty Ltd,
GeoSnapShot Pty Ltd, First Avenue Ventures Pty Ltd, First Avenue
Capital Pty Ltd, Karia Technology Pty Ltd.
Name: Robert Bell
Qualifications: BBus
Type of Director: Independent Non-Executive Director
Occupation: Company Director
External Directorships: Liveheats Pty Ltd, 86 Elwood Pty Ltd, Home Finance Company PTE
Limited, Moonova Payments Pty Ltd.
Name: Edward John Harvey
Qualifications: BCom, CA, CFInstD
Type of Director: Independent Non-Executive Director
Occupation: Company Director
External Directorships: (excluding HGH subsidiaries) Napier Port Holdings Limited, Pomare
Investments Limited, Port of Napier Limited.
Name: Kathryn Mitchell
Qualifications: BA, CMInstD
Type of Director: Independent Non-Executive Director
Occupation: Company Director
External Directorships: (excluding HGH subsidiaries) Chambers@151 Limited, Christchurch
International Airport Limited, Firsttrax Approvals Limited, Link Engine
Management Limited, Link Engine Management International
(NZ) Limited, Morrison Horgan Limited, The New Zealand Merino
Company Limited, The A2 Milk Company Limited, Purepods Limited,
MyRaceLab Limited, Link Engine Management (NZ) Limited, Link Engine
Management USA Inc, Link Engine Management Pty Ltd, Link Engine
Management EU B.V, Prorace Studio Limited, Link ECU Limited.
87
G R Tomlinson (Chair)E J Harvey
K MitchellS Beckett
R Bell
DIRECTORS' STATEMENTS
The financial statements are dated 20 August 2025 and have been signed by all Directors.
FINANCIAL RESULTS
88
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?O<8O
FINANCIAL RESULTS
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FINANCIAL RESULTS
158
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FINANCIAL RESULTS
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161
PwC New Zealand, PwC Tower, 15 Customs Street West,
Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000
Independent auditor’s report
To the shareholders of Heartland Group Holdings Limited
Our opinion
In our opinion, the accompanying consolidated financial statements (the financial statements) of Heartland Group
Holdings Limited (the Company), including its subsidiaries (the Group), present fairly, in all material respects, the
financial position of the Group as at 30 June 2025, its financial performance, and its cash flows for the year then
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and
International Financial Reporting Standards Accounting Standards (IFRS Accounting Standards).
What we have audited
The Group's financial statements comprise:
●the statement of financial position as at 30 June 2025;
●the statement of comprehensive income for the year then ended;
●the statement of changes in equity for the year then ended;
●the statement of cash flows for the year then ended; and
●the notes to the financial statements, comprising material accounting policy information and other explanatory
information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)) and
International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) (PES 1) issued
by the New Zealand Auditing and Assurance Standards Board and the International Code of Ethics for Professional
Accountants (including International Independence Standards) issued by the International Ethics Standards Board
for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
In our capacity as auditor and assurance practitioner, our firm provides review and other assurance services. Our
firm also provided an executive reward survey report to the Group. In addition, certain partners and employees of
our firm may deal with the Group on normal terms within the ordinary course of trading activities of the business.
The firm has no other relationship with, or interests in, the Group.
PwC New Zealand, PwC Tower, 15 Customs Street West,
Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000
Independent auditor’s report
To the shareholders of Heartland Group Holdings Limited
Our opinion
In our opinion, the accompanying consolidated financial statements (the financial statements) of Heartland Group
Holdings Limited (the Company), including its subsidiaries (the Group), present fairly, in all material respects, the
financial position of the Group as at 30 June 2025, its financial performance, and its cash flows for the year then
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and
International Financial Reporting Standards Accounting Standards (IFRS Accounting Standards).
What we have audited
The Group's financial statements comprise:
●the statement of financial position as at 30 June 2025;
●the statement of comprehensive income for the year then ended;
●the statement of changes in equity for the year then ended;
●the statement of cash flows for the year then ended; and
●the notes to the financial statements, comprising material accounting policy information and other explanatory
information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)) and
International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) (PES 1) issued
by the New Zealand Auditing and Assurance Standards Board and the International Code of Ethics for Professional
Accountants (including International Independence Standards) issued by the International Ethics Standards Board
for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
In our capacity as auditor and assurance practitioner, our firm provides review and other assurance services. Our
firm also provided an executive reward survey report to the Group. In addition, certain partners and employees of
our firm may deal with the Group on normal terms within the ordinary course of trading activities of the business.
The firm has no other relationship with, or interests in, the Group.
FINANCIAL RESULTS
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Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial statements of the current year. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Description of the key audit matter How our audit addressed the key audit matter
Provision for impairment of finance
receivables
As disclosed in note 13 of the financial
statements, the impairment allowance totalled
$71.8 million at 30 June 2025.
For the determination of the collectively
assessed impairment allowance, this requires
the use of credit risk methodologies that are
applied in models using the Group’s historical
experience of the correlations between defaults
and losses, borrower creditworthiness,
segmentation of customers or portfolios and the
application of forward looking multiple economic
scenarios. The assumptions we focused our
audit on included those with greater levels of
management judgement and for which
variations have the most significant impact on
the impairment allowance.
For finance receivables that meet specific risk
based criteria, the impairment allowance is
individually assessed by the Group.
These impairment allowances are measured
using probability weighted scenarios which are
intended to reflect a range of reasonably
possible outcomes, and incorporate
assumptions such as estimated future cash
proceeds expected to be recovered from the
realisation of security held as collateral by the
Group.
We considered this a key audit matter due to
the significant inherent estimation uncertainty
present in the determination of the impairment
allowance.
We obtained an understanding of control activities over the
Group’s impairment allowance, and for certain control
activities assessed whether they are appropriately
designed. For controls relevant to our planned audit
approach we tested, on a sample basis, whether they
operated effectively, throughout the financial year.
In addition, we, along with our credit risk modelling expert,
performed the following procedures, amongst others, on a
targeted or sample basis, on the Group’s collectively
assessed impairment allowance:
●Assessed the appropriateness of the methodology
inherent in the models used against the requirements of
NZ IFRS 9 Financial Instruments;
●Challenged and assessed the appropriateness of the
collectively assessed impairment allowance inclusive of
the impacts of any post model adjustments;
●Tested the accuracy of the collectively assessed
impairment allowance calculation; and
●Tested the completeness and accuracy of critical data
elements used in the calculations.
With respect to individually assessed impairment
allowances we:
●For a sample of business and rural loans not identified
as impaired, considered the borrowers latest information
available to the Group to assess the credit risk grade
rating allocated to the borrower as to whether the
borrower could be identified as impaired, a critical data
element which involves significant management
judgement; and
●For loans where an impairment allowance was
individually assessed, we considered the borrower's
latest financial information, value of security held as
collateral and probability weighted scenario outcomes
(where applicable) to test the basis of measuring the
impairment allowance.
We considered the impacts of events occurring subsequent
to balance date on the impairment allowances.
We also assessed the reasonableness of the disclosures
against the requirements of the accounting standards.
Fair value of finance receivables - reverse
mortgages
The Group’s fair value of finance receivables
– reverse mortgages (“Reverse mortgages”)
totalled $3.4 billion at 30 June 2025 as
disclosed in note 21 of the financial
statements. Reverse mortgages are held at
fair value through profit or loss.
The Group records the estimated fair value of
the Reverse mortgages at transaction price
(cash advanced plus accrued capitalised
interest), on the basis that no reliable fair
value can be estimated as there is no relevant
Our audit procedures included assessing the design and
implementation of controls relating to the Group’s
assessment of the fair value of Reverse mortgages.
In addition, our audit procedures included:
●Assessing the reasonableness of the Group’s approach
to estimating the fair value based on the transaction
price against the requirements of the accounting
standards;
●Assessing whether there was evidence of a relevant
active market or observable inputs in which to establish
fair value using a market approach;
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81 PwC
Description of the key audit matter How our audit addressed the key audit matter
active market and the fair value cannot be
reliably estimated using other valuation
techniques, as permitted under the accounting
standards.
To assess whether the transaction price
remains an appropriate proxy for fair value, the
Group considers the impact on discounted
future cash flows of changes in the risk profile
and expectations of performance since
origination, including possible outflows under
the no negative equity guarantee provided by
the Group to the borrower. High interest rates
and volatility in house prices, combined with the
economic outlook, increases the possibility of
outflows under the no negative equity
guarantee. Accordingly, we consider this to be
a key audit matter.
● Engaging our internal actuarial expert to assess the
Group’s estimate of the value of discounted future cash
flows from the Reverse mortgages, including any
expected outflows under the no negative equity
guarantee and comparing this to the transaction price of
Reverse mortgages (carrying value) to assess any
potential shortfall (a shortfall would indicate the
transaction price was overstated);
● Testing the completeness and accuracy of a sample of
critical data elements used as inputs to the value of
discounted future cash flows;
● Assessing the reasonableness of key assumptions
(such as future house prices, voluntary exits, interest
rate margins, future interest rates) used in the value of
discounted future cash flows; and
● Considering the appropriateness of the disclosures
against the requirements of the accounting standards.
Heartland Bank Australia Limited goodwill
impairment assessment
The carrying amount of the Heartland Bank
Australia Limited goodwill as at 30 June 2025,
as disclosed in note 18 of the financial
statements, amounted to $175.0 million.
The carrying value of goodwill is a key audit
matter as it is a significant intangible asset in
the Group’s statement of financial position. At
balance date an impairment assessment is
required which uses an estimate of the
recoverable amount that is dependent on future
earnings.
Previously, the goodwill was allocated to a
group of cash generating units (CGUs)
representing the Australian reverse mortgage
lending and the Australian livestock financing
businesses. In the current year, the Group has
determined the goodwill for this group of CGUs
should be allocated to a single Heartland Bank
Australia Limited CGU at which impairment is
assessed due to the corporate simplification
and operational integration of the Australian
business, and the way goodwill is monitored
internally.
The Group used the Fair Value Less Costs of
Disposal (FVLCD) approach to determine the
recoverable amount of the Heartland Bank
Australia Limited CGU.
FVLCD is based on a price-earnings multiples
approach using normalised current year
earnings.
The key assumptions used in the FVLCD are:
● Price-earnings multiple; and
● Normalised current year earnings.
We held discussions with management to understand the
assumptions used in the determination of the single CGU and
the goodwill impairment assessment.
Our audit procedures also included the following:
● Assessing judgements made in respect of the
determination of the CGU, taking into account the
corporate simplification and operational integration of the
Group’s Australian business;
● Obtaining an understanding of the business processes
and controls applied by management in performing the
impairment assessment;
● Assessing the appropriateness of using a FVLCD
approach against the requirements of the accounting
standards;
● Engaging our internal valuation expert to assess
management's valuation methodology and key
assumptions, including comparable price-earnings
multiples;
● Assessing the appropriateness of the normalised current
year earnings, as well as comparing these to the FY26
forecast earnings approved by the Board for
reasonableness;
● Obtaining and evaluating management’s sensitivity
analyses to ascertain the impact of reasonably possible
changes in key assumptions on the recoverable amount;
and
● Considering the appropriateness of disclosures against
the requirements of the accounting standards.
FINANCIAL RESULTS
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Description of the key audit matter How our audit addressed the key audit matter
Operation of financial reporting
information technology (IT) systems and
controls
The Group’s operations and financial
reporting processes are dependent on IT
systems for the capture, processing, storage
and extraction of significant volumes of
transactions which is critical to the recording
of financial information and the preparation of
the Group’s financial statements. In addition,
the Group changed to a new general ledger
system in the current year. Accordingly, we
consider this to be a key audit matter.
In common with other groups with banking
subsidiaries, access management controls
are important to ensure both access and
changes made to applications and data are
appropriate. Ensuring that only appropriate
staff have access to IT systems, that the level
of access itself is appropriate, and that access
is periodically monitored, are key controls in
mitigating the potential for fraud or error as a
result of a change to an application or
underlying data.
The Group’s controls over IT systems are
intended to ensure that:
● New systems or changes to existing
systems operate as intended and are
authorised;
● Access to process transactions or change
data is appropriate and maintains an
intended segregation of duties;
● The use of privileged access to systems
and data is restricted and monitored; and
● IT processing is approved and where
issues arise they are resolved.
For material financial statement transactions and balances,
our procedures included obtaining an understanding of the
business processes, IT systems used to generate and
support those transactions and balances, associated IT
application controls, and IT dependencies in manual
controls. Our procedures included evaluating and testing
the design and operating effectiveness of certain controls
over the continued integrity of the IT systems that are
relevant to financial reporting.
This involved assessing, where relevant to the audit:
● Change management: the processes and controls used
to develop, test and authorise changes to the
functionality and configurations within systems;
● System development: the project disciplines which
ensure that significant developments or implementations
are appropriately tested before implementation and that
data is converted and transferred completely and
accurately;
● Security: the access controls designed to enforce
segregation of duties, govern the use of generic and
privileged accounts, or ensure that data is only changed
through authorised means; and
● IT operations: the controls over certain IT batch
processes used to ensure that any issues that arise are
managed appropriately.
Where we identified design or operating effectiveness
matters relating to IT systems and application controls
relevant to our audit, we performed alternative or additional
audit procedures.
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83 PwC
Our audit approach
Overview
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we considered where management made subjective judgements; for example, in
respect of significant accounting estimates that involved making assumptions and considering future events that are
inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls,
including among other matters, consideration of whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable
assurance about whether the financial statements are free from material misstatement. Misstatements may arise
due to fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the
overall Group materiality for the financial statements as a whole as set out above. These, together with qualitative
considerations, helped us to determine the scope of our audit, the nature, timing and extent of our audit
procedures, and to evaluate the effect of misstatements, both individually and in the aggregate, on the financial
statements as a whole.
The overall group materiality is $5.2 million, which represents approximately
0.75% of interest income.
We chose interest income as the benchmark because, in our view, it best reflects
the activity and performance of the Group which now includes an enlarged
banking operation in Australia. Interest income is a proxy for revenue which is a
generally accepted benchmark
Following our assessment of the risk of material misstatement, full scope audits
were performed for two (NZ Banking Group and Australia Banking Group) of the
three identified components based on their financial significance. Specified audit
procedures and analytical review procedures were performed on the remaining
component (the Company).
As reported above, we have four key audit matters, being:
● Provision for impairment of finance receivables
● Fair value of finance receivables – reverse mortgages
● Heartland Bank Australia Limited goodwill impairment assessment
● Operation of financial reporting information technology (IT) systems and
controls
FINANCIAL RESULTS
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84 PwC
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the
financial statements as a whole, taking into account the structure of the Group, the accounting processes and
controls, and the industry in which the Group operates.
We performed a full scope audit of the Group’s two financially significant components. The full scope audit of the
Australia Banking Group component was performed by a PwC network firm operating under our instructions.
Our involvement with the PwC network firm auditing the Australia Banking Group component included the
following:
● issuing Group audit instructions;
● meeting with the component audit team and reviewing their audit findings;
● inspecting audit working papers;
● attending key management and audit committee meetings; and
● maintaining regular communication throughout the audit and appropriately directing their audit.
Specified audit procedures and analytical review procedures were performed on the remaining component.
By performing these procedures, together with the procedures performed on the consolidation and intercompany
eliminations, we have obtained sufficient and appropriate audit evidence regarding the financial information of the
Group to provide a basis for our opinion on the Group’s financial statements.
Other information
The Directors are responsible for the other information. The other information comprises the information included
in the Annual Report, but does not include the financial statements and our auditor’s report thereon, and the
Heartland Climate Report 2025. The Annual Report and Heartland Climate Report 2025 is expected to be made
available to us after the date of this auditor’s report.
Our opinion on the financial statements does not cover the other information and we will not express any form of
audit opinion or assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the other information not yet received, if we conclude that there is a material misstatement therein,
we are required to communicate the matter to the Directors and use our professional judgement to determine the
appropriate action to take.
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of the financial
statements in accordance with NZ IFRS and IFRS Accounting Standards, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole, are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (NZ) and ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
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85 PwC
A further description of our responsibilities for the audit of the financial statements is located at the External
Reporting Board’s website at:
https://www.xrb.govt.nz/standards/assurance-standards/auditors-responsibilities/audit-report-1-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken so that
we might state those matters which we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company
and the Company’s shareholders, as a body, for our audit work, for this report, or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Karen Shires.
For and on behalf of
PricewaterhouseCoopers Auckland
20 August 2025
DIRECTORY
168
Directory
Registered office
Heartland
35 Teed Street
Newmarket, Auckland 1023
PO Box 9919
Newmarket, Auckland 1149
T 0508 432 785
E shareholders@heartland.co.nz
W heartlandgroup.info
Auditor
PricewaterhouseCoopers
Level 27, PwC Tower
15 Customs Street West
Auckland 1010
T 09 355 8000
Share registry
MUFG Pension & Market Services
Level 30, PwC Tower
15 Customs Street West
Auckland 1010
T 09 375 5998
E enquiries.nz@cm.mpms.mufg.com
W mpms.mufg.com
169
Glossary
ADIAuthorised deposit-taking institution
APRAAustralian Prudential Regulation Authority
Banking GroupThe Banking Group includes Heartland Bank and all of its
subsidiaries, including Heartland Bank Australia and Marac
Insurance
bpsBasis points
CAGRCompound annual growth rate
CET1Common Equity Tier 1
CEOChief Executive Officer
cpsCents per share
CTI ratioCost-to-income ratio
DCSDepositor Compensation Scheme
DPDDays past due
DRPDividend Reinvestment Plan
EPSEarnings per share
Exit NIMNIM on the last day of the reporting period.
FXForeign currency exchange
GHG emissionsGreenhouse gas emissions
The GroupHeartland and its subsidiaries
HarmoneyHarmoney Corp Limited
Heartland, Heartland Group,
HGH
Heartland Group Holdings Limited or the Company
Heartland Australia GroupHeartland Bank Australia and its direct and indirect wholly-
owned subsidiaries
Heartland Bank, HBL, NZ
Banking
Heartland Bank Limited
Heartland Bank RemCoHeartland Bank People & Culture and Remuneration Committee
Heartland Bank Australia,
HBAL, AU banking
Heartland Bank Australia Limited
Heartland Bank Australia
PRNCo
Heartland Bank Australia People, Remuneration and
Nominations Committee
Heartland Mobile AppHeartland Bank’s mobile app for customers in New Zealand
Heartland TrustHeartland’s registered charitable trust which is independent
from by closely supported by Heartland.
KPIKey performance indicator
LT ILong-term incentive
GLOSSARY
170
LVRLoan-to-value ratio
NIMNet interest margin
N PATNet profit after tax
NPLNon-performing loan
NSANon-strategic assets
NZ Banking Group, NZBGThe New Zealand Banking Group consists of Heartland Bank
and its New Zealand subsidiaries, excluding Marac Insurance
NZBANew Zealand Banking Association
NZX CodeNZX Corporate Governance Code dated January 2025
OPEXOperating expenses
PSRsPerformance share rights
PwCPricewaterhouseCoopers
RBNZReserve Bank of New Zealand
ReceivablesGross finance receivables (includes Reverse Mortgages)
ROEReturn on Equity
STIShort-term incentive
Tier 2Tier 2 capital (a form of subordinated debt)
TSRTotal shareholder return
YoYYear on year
FY2030Financial year ending 30 June 2030 (1 July 2029 to 30 June
2030)
FY2026Financial year ending 30 June 2026 (1 July 2025 to 30 June
2026)
2H2025 OutlookFinancial metric expectations for 2H2025 set by Heartland in
its 1H2025 financial results announcement published on 27
February 2025
2H2025Second half of FY2025 (1 January to 30 June 2025)
4Q2025Fourth quarter of FY2025 (1 April to 30 June 2025)
3Q2025Third quarter of FY2025 (1 January to 31 March 2025)
1H2025First half of FY2025 (1 July to 31 December 2024)
2Q2025Second quarter of FY2025 (1 October to 31 December 2024)
1Q2025First quarter of FY2025 (1 July to 30 September 2024)
FY2025, FY25Financial year ended 30 June 2025 (1 July 2024 to 30 June 2025)
FY2024, FY24Financial year ended 30 June 2024 (1 July 2023 to 30 June 2024)
FY2023, FY23Financial year ended 30 June 2023 (1 July 2022 to 30 June 2023)
FY2022, FY22Financial year ended 30 June 2022 (1 July 2021 to 30 June 2022)
FY2021, FY21Financial year ended 30 June 2021 (1 July 2020 to 30 June 2021)
FY2019Financial year ended 30 June 2019 (1 July 2018 to 30 June 2019)
heartlandgroup.info
---
Climate
Report 2025
1
1 ISO 14604-1: 2018 refers to 14064-1:2018 Greenhouse gases – Part 1: Specifications with guidance at the organisation level for quantification and reporting of greenhouse gas emissions and removals (ISO 14064-1:2018 or ISO), and GHG
P
rotocol includes Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (revised edition) and Corporate Value Chain (Scope 3) Accounting and Reporting Standard (Supplement to the GHG Protocol Corporate Accounting
a
nd Reporting Standard) (GHG Protocol).
Approach with Heartland’s second Climate Report
Heartland Group Holdings Limited (Heartland
Group) and its subsidiary Heartland Bank Limited
(H
eartland Bank or HBL) are both “Climate
Reporting Entities” (CREs) and are required to
prepare a climate report. This climate report has
been prepared jointly by Heartland Group and
H
eartland Bank for Heartland Group, Heartland
B
ank, and their subsidiaries (Heartland
or the
G
roup).
Scope of Heartland’s second Climate Report
Following
the authorised deposit-taking institution
(A
DI) acquisition in April 2024, the ADI’s operations
are now fully integrated with Heartland’s pre-
acquisition Australian businesses to create
H
eartland Bank Australia Limited (Heartland Bank
Australia).
As
mentioned in Heartland’s FY2024 Climate Report,
H
eartland was unable to evaluate Heartland Bank
A
ustralia’s
operations
comprehensively
last
year
due
t
o the short period of time between the acquisition
a
nd financial year end. Nevertheless, as the ADI did
not undertake lending activity outside of residential
m
ortgages, personal lending, and asset finance
p
rior to the acquisition, Heartland Bank Australia’s
m
ain climate-related risks and opportunities were
n
oted as likely to be those faced by Heartland’s pre-
existing
Australian businesses. This year, Heartland
B
ank Australia established a dedicated Compliance
&
ESG function as part of
its plan to support
H
eartland’s climate strategies and reporting.
The team is currently reviewing Heartland Bank
A
ustralia’s existing governance, risk management
a
nd
c
limate-related
s
trategies.
H
eartland
e
xpects
t
o
incorporate Heartland Bank Australia’s governance,
strategy, targets and metrics and risk management
in its FY2026 climate report.
Nevertheless, Heartland has developed a detailed
transition plan addressing its pathway to a reach
a low-emissions and climate resilient future for its
N
ew Zealand based operations. This includes key
a
ssumptions and conditions required for Heartland
a
nd its customers to reach a low-emission economy,
w
hile also managing its key climate-related risks and
opportunities.
In order to enhance comparability with other CREs
in the banking sector, Heartland changed its overall
greenhouse gas (GHG) emissions preparation
s
tandard from ISO 14064-1:2018 to GHG Protocol¹.
T
he change primarily affects the disclosure of scope
3
emissions categorisation numbering. Heartland
discloses reconciliation of categories between ISO
1
4064-1:2018 and GHG Protocol as necessary in this
c
limate
r
eport.
Please
see the Strategy section for more details.
Change of Aotearoa New Zealand Climate
Standards (NZ CS) and use of adoption
provisions
In
November 2024, the External Reporting Board
(X
RB) published
Amendments to Adoption of
A
otearoa New Zealand
Climate Standards 2024
(Amendments), effective for the annual reporting
period beginning on or after 1 January 2024. The
Amendments include:
•
e
xtend the adoption provisions for scope
3 GHG emissions (adoption provision 4 and
consequential amendments to adoption
provisions 5 and 7), and anticipated financial
i
mpacts for an additional year (adoption provision
2); and
• establish an adoption provision allowing CREs
obtaining limited assurance of scope 3 GHG
emissions disclosures in relation to accounting
periods ending on or after 31 December 2025
(adoption provision 8).
In preparing this climate report, Heartland has
e
lected to apply the following adoption provisions in
a
ccordance with NZ CS 2
Adoption of Aotearoa New
Z
ealand Climate Standards
(N Z CS 2) taking into
a
ccount the Amendments described
above.
2
Adoption provision (from NZ CS 2)DescriptionParagraphs of NZ CS exempted from
Adoption provision 2:
Anticipated financial impacts
In its first and second reporting periods, Heartland is exempt from disclosing the
anticipated financial impacts of climate-related risks and opportunities reasonably
e
xpected by the entity.
NZ CS 1
Climate-related Disclosures
(NZ CS 1), paras 15(b), (c ) and (d)
Adoption provision 4:
Scope
3 GHG emissions
In
its first and second reporting periods, Heartland is exempt from disclosing its
GHG emissions in metric tonnes of carbon dioxide equivalent (CO2e) classified as
scope 3. Heartland has elected to use this exemption with respect to its upstream
transportation and distribution activities; upstream leased assets that Heartland
has no operational control; use and end of life treatment of sold assets (categories
4, 8, 11 and 12).
NZ CS 1, para 22(a)(iii)
Adoption provision 5:
Comparatives
for scope 3 GHG
emissions
Subject to the extent of applying adoption provision 4 above, Heartland is exempt
f
rom disclosing comparative information for scope 3 GHG emissions in the second
r
eporting period. Heartland will consider the application of this adoption provision
in its third and fourth reporting periods in future climate reporting.
NZ CS 3
General Requirements for
Climate-related Disclosures
(NZ CS
3), para 40
Adoption provision 6:
Comparatives for metrics
As Heartland is exempt from disclosing comparative information for each metric
i
n the two preceding reporting periods, it is permitted to provide one year of
comparative information for each metric in this second reporting period. Heartland
adopted this provision to the extent no comparatives were voluntarily made in the
F
Y2024 Climate Report.
NZ CS 3, para 40
Adoption provision 7:
Analysis of trends
In its first and second reporting periods, Heartland is exempt from disclosing an
a
nalysis of the main trends in a comparison of each metric from previous reporting
p
eriods to the current reporting period. In relation to scope 3 GHG emissions,
Heartland will consider applying this exemption in the third reporting period, and
w
ill consider the application in its future climate reporting.
NZ CS 3, para 42
Adoption provision 8:
Scope 3 GHG emissions assurance
For
accounting periods ending before 31 December 2025, Heartland is permitted
t
o exclude the scope 3 GHG emissions disclosure from the scope of the assurance
en
gagement.
NZ CS 1, paras 25, 26(a)(iii), (b) and
(c )
3
Heartland Group
Greg Tomlinson
Chair of the Board
Kate Mitchell
Chair of the Sustainability Committee
Heartland Bank
Bruce Irvine
Chair of the Board
Kate Mitchell
Chair of the Sustainability Committee
Statement of compliance
This is the climate report for Heartland Group
a
nd Heartland Bank, and their respective
subsidiaries (i.e., the Group) for the year
ended 30 June 2025.
This climate report complies with NZ CS
i
ssued by the XRB.
4
Our journey
FY2021
Establishment of first science-aligned emissions
reduction target: a 35% absolute reduction by
FY2026, using FY2019 as the base year².
Implementation of emissions reduction initiatives
such as making documents available via online
channels to decrease paper usage.
Use of certified renewable electricity at Heartland’s
main offices in New Zealand³.
FY2022
Commenced replacement of diesel and petrol internal combustion engine (ICE)
vehicles
within the New Zealand fleet with hybrid and plug-in hybrids.
Commenced
installation of electric vehicle (EV) charging stations at key office
l
ocations in Auckland, Hamilton and Christchurch.
FY2023
Heartland continued the roll out of new generation
v
ehicles⁴ within its New Zealand fleet with 45% of all
v
ehicles being hybrid or plug-in hybrids.
Developed
an environmental risk screening
a
nd sustainability tool to be used in the credit
d
ecisioning process to understand the sustainability
o
f Heartland’s larger Business and Rural borrowers.
Factors considered are environmental, climate,
reputational and regulatory (as well as mitigating
actions being employed by those borrowers).
Conducted Heartland’s first waste audit at its
A
uckland offices to understand how it can divert
more waste from landfill.
FY2024
Completed scenario analysis to
u
nderstand
H
eartland’s
c
limate-
related risks and opportunities.
D
esigned
a
nd
l
aunched
H
eartland’s
c
omposite climate risk monitoring tool
a
nd prepared its first climate report
under the New Zealand Climate-
related Disclosures regime.
Employed climate risk modelling
s
oftware,
J
upiter Intelligence,
to understand Heartland’s future
exposure to climate hazards and
s
et risk appetite targets as part of
Heartland’s climate risk management
s
trategy.
Launched
a pilot with Australian
f
armer-led software provider Ruminati
to
enable producers across Australia
to track, reduce and validate on-farm
c
limate action across the supply chain.
Continued to partner with leading new
generation vehicle distributors. This
i
ncludes Heartland’s white labelled
‘
MG Finance’ partnership with MG
M
otors NZ and becoming one of Tesla’s
p
referred finance partners in New
Zealand.
FY2025
Developed
an initial detailed transition plan to
p
osition Heartland’s pathway to net zero by FY2050.
Identified
as a ‘fast follower’ and one of the top
3
improvers in Forsyth Barr’s 2024 Carbon & ESG
r
atings of NZX listed companies.
Achieved
and outperformed the target to reduce
H
eartland’s absolute gross operational emissions by
4
2% (against original target of 35%) from the FY2019
b
ase year). Set an updated target in FY2025.
2 Heartland began its journey and recorded its first emissions inventory for FY2019 in FY2020. This emissions reduction target was in line with science-based targets initiative (SBTi) near-term criteria for 2020 or earlier base year approach for
SBTi reduction pathways (4.2% year-on-year or above).
3 All
New Zealand based offices except Dunedin, Fielding and Wellington.
4 Includes hybrid electric vehicles (HEV), plug-in hybrid electric vehicles (PHEV), battery electric vehicles (BEV), and hydrogen vehicles.
01
Strategy
STRATEGY
6
Heartland’s strategy
Strategic vision and current business model
Heartland Group is the listed holding company for
two banks – Heartland Bank in New Zealand and
H
eartland Bank Australia. Each bank is focused on
p
roviding specialist banking products to enable
better lives for New Zealanders and Australians. In
both countries, these products include Reverse
Mortgages, Livestock Finance and Savings and
D
eposits. In New Zealand, Heartland Bank also offers
R
ural Finance, Motor Finance, and Asset Finance.
Heartland Group’s role as the listed parent company
is to ensure capital is allocated to the parts of its
business which generate strong returns, and to set
the strategic and risk appetite parameters within
w
hich it
expects the group entities to operate. This
e
nables Heartland Group to maximise shareholder
r
eturns and each bank to enhance the value it offers
customers by helping more New Zealanders and
Australians with their specialist banking needs.
Heartland Group’s FY2025 strategy was
focused on:
•
r
esetting
investment and lending activity toward
a
sset classes where risk and return is calibrated
to deliver a return on equity (ROE) of at least 12%
• integrating its existing Australian businesses
i
nto the acquired ADI to form a new and
u
nique Australian bank (now Heartland Bank
A
ustralia) with access to a deep, stable and
efficient deposit funding base to fuel growth
o
pportunities
•
cha
nging
Heartland Bank’s arrears
management, collections and recoveries policies
and practices to enable the active derisking and
repositioning of non-performing loans in New
Z
ealand while restoring asset quality
•
recycling capital from Heartland’s portfolio of
non-strategic assets which do not meet ROE
thresholds.
In
support of this strategy, within its core product
sets, Heartland aims to:
•
b
e the leading provider of funding solutions for
older New Zealanders and Australians
•
b
e the pre-eminent provider of rural finance in
New Zealand and Australia, focusing on livestock
•
b
e
the
preferred
vehicle
financier
in
New
Zealand
•
o
ffer innovative and competitively priced term
a
nd savings deposits in New Zealand and
Australia.
Heartland Bank’s environmental sustainability
strategy
Heartland
B
ank’s
en
vironmental
su
stainability
s
trategy is built on three pillars:
•
i
ntegrate climate risks into lending decisions
•
f
und Heartland borrowers’ transition to a net-
zero
economy
•
e
mbed sustainability into what Heartland does.
Integrate climate risks into lending decisions
By understanding, monitoring and managing
i
ts potential exposure to climate change risks,
Heartland is building its capability to consider
c
limate change risks in its lending decisions.
Fund Heartland borrowers’ transition to a net-
zero economy
Heartland
is promoting and growing an
e
nvironmentally sustainable business by funding
c
lean assets and assisting customers with the
finance and assets they require to transition to a
low-emissions economy.
Embed sustainability into what Heartland does
Heartland
Bank is committed to operating its
business in a more sustainable manner. This
i
ncludes reducing its operational emissions in
line with the Paris Agreement to net-zero by 2050.
U
pon achieving the previous target to reduce
absolute gross operational emissions by 35%
from its FY2019 base year, Heartland has set a new
sho
rt-term
s
cience-aligned
t
arget,
c
ommitting
t
o reducing Heartland’s absolute operational
e
missions from its New Zealand based operations
b
y 37.8% by FY2030 from the FY2025 base year,
including an absolute reduction of scope 1 and 2
e
missions 37.8% from the FY2025 base year.
Scenario analysis
Climate change is a significant and complex
p
roblem that will impact Heartland, its employees,
c
ustomers and suppliers differently.
STRATEGY
7
The two types of climate-related risks that
H
eartland faces are:
• transition risks – such as changes in policy,
legislation, technology, and markets (e.g., the
d
evelopment of zero-emission aviation) as it
t
ransitions to a lower-carbon economy
•
physical risks – physical impacts of climate
change, such as extreme weather events,
severe heat waves, sea level rise, erosion,
cy
clones,
a
nd
bio
diversity
los
s.
Due to the nature of its business, Heartland
is exposed to a combination of physical and
t
ransition risks.
⁵ For example:
• operating from offices across New Zealand and
Australia, which are exposed to physical risks
from flooding, extreme heat, and storms
•
R
everse Mortgage and residential mortgage
c
ustomers are susceptible to physical risks due
to storms, rising sea and river levels, and floods
• Motor Finance and Asset Finance customers
a
re susceptible to the transition risk of the
e
lectrification of the fleet
•
R
ural and Livestock customers face a
c
ombination of physical risks such as drought,
fl
ooding, and storms; and transition risks
s
uch as changes in regulation and consumer
p
references.
Heartland’s exposure
FY2024 scenario analysis
In
F
Y2024,
H
eartland
re
freshed
t
he
p
revious
F
Y2021
s
cenario analysis using internally developed
c
limate change scenario narratives. This scenario
analysis extended to the Australian Livestock
F
inance business (StockCo AU
or Livestock (AU)),
which
was acquired by Heartland in FY2022 and
n
ot included in the previous analysis. Although
this was conducted in FY2024, Australian based
s
cenario analysis has not been considered or
approved by Heartland Bank Australia’s Board.
H
eartland Bank Australia is taking the necessary
steps to enable scenario analysis in line with
su
stainability
r
eporting
r
equirements.
Heartland selected three scenarios (known as the
“Orderly”, “Too Little, Too Late”, and “Hot House”),
w
hich were primarily developed by the New
Zealand Banking Association (NZBA), no other
e
xternal partners were used. These scenarios
were used to align with others in the banking
s
ector to improve comparability. These scenarios
were also used to challenge Heartland’s resilience
a
gainst the varying transition impacts that arise in
t
he “Orderly” and “Too Little, Too Late” scenarios as
w
ell as look to understand the potential physical
impacts in their extremes in the “Too Little, Too
L
ate” and “Hot House” scenarios.
These scenarios were then further customised
and developed to be relevant and specific to
H
eartland. The adjustments include a particular
focus on the potential impact on property backed
m
ortgage lending, transport, infrastructure /
civil engineering, small and midsize enterprises,
a
nd the agriculture sector. Once customised,
the narratives for each scenario were agreed by
a
working group comprising senior leaders from
across Heartland, including representation from
t
he Heartland Group Sustainability Committee.
Summaries of the different scenarios are set
o
ut below.
5 Heartland Bank Australia will confirm physical and transition risks as it takes the necessary steps in relation to sustainability reporting.
STRATEGY
8
ImmediateShort termMedium termLong term
Time horizon
(y e a r(s))
1 – 23 – 55 – 730
Rationale for
selection
Provides
a current state assessment
a
nd the ability to address immediate
t
ransition and acute physical risks and
o
pportunities.
Prior to FY2025: aligns with maximum
fi
xed interest rate periods for Online
H
ome Loans⁶. Broadly aligns with the
a
verage term of Business Loans⁷.
FY2025:
broadly aligns with the average
term of Business Loans, and internal
strategic planning.
Aligns with the maximum term of the
m
ajority of Heartland’s credit exposures.
Aligns with maximum loan terms for
O
nline Home Loans⁸ and Rural Lending,
a
nd the vast majority of the ‘expected’
t
erm of Heartland’s Reverse Mortgage
portfolio. Also aligns with long-term
international and domestic emissions
reduction targets and long-term
science-aligned emissions reduction
timeframes.
OrderlyToo Little, Too LateHot House
Scenario summaryIn this scenario, collective global action is taken
towards the transition to a low-carbon global
economy. There is technology, policy, and behaviour
change to support the transition, which is matched by
an increasing carbon price to incentivise low-carbon
behaviour change.
This scenario represents a misaligned and delayed
transition to a low-carbon economy. While New
Zealand and Australia are early adopters, introducing
policies targeting net zero by 2050, economic
pressures in Australia during the 2030s slow the pace
of its transition. In addition, there is very limited global
action towards a low-emissions economy.
This scenario represents a worst-case emissions
trajectory with minimal ambition to transition towards
a low-carbon economy despite widespread increase in
severe weather events, and associated destabilisation of
social, political, and economic structures.
Policy trajectory
(temperature)
1.5°C>2°C and <3°C>3°C
Policy response Steady and constantStaggered in late 2020s to 2040No material response
Technological
advancements
Steady and constantStaggered in late 2020s to 2040Minimal and driven by cost saving benefits
Physical risksModerateHighExtreme
Transition risksModerateHighMinimal
Reference
scenarios
NZBA’s Orderly scenario:
Intergovernmental Panel on Climate Change (IPCC)
Standard Socioeconomic Pathway (SSP)1-1.9
Climate Change Commission (CCC) ‘Tailwinds’
Australia’s Long-Term Emissions Reduction Plan: The
P
lan scenario
NZBA’s Too Little, Too Late scenario:
IPCC
S
SP2-4.5
CCC ‘Headwinds’
NZBA’s Hothouse scenario:
IPCC SSP5-8.5
CCC ‘Current policy reference’
Further descriptions of the scenarios and emissions reduction pathways used can be found in Appendix 1.
6 From 18 March 2025, Heartland Bank no longer offers Online Home Loans to new customers. This climate report continues to include related discussions for comparative disclosure purposes but further elaborates to reflect any necessary
change from FY2024.
7 Business Loan portfolio includes Open for Business loans where Heartland has ceased writing from 10 April 2025 onwards. Similar to Online Home Loans, this climate report continues to include related discussion for comparative disclosure
purposes but reflects any necessary change from FY2024.
8 There is no change to long-term time horizon following the decision to cease writing home loan products from 18 March 2025.
STRATEGY
9
The working group identified climate-related risks
and opportunities over the short, medium and
l
ong term, and assessed how resilient the Group’s
business strategy would be under the different
s
cenarios.
The identified risks and opportunities from
e
ach scenario were scored based on likelihood
a
nd impact, taking into account how adaptable
Heartland and its assets are, how isolated the
r
isk or opportunity is (e.g., floods quite often only
impact an isolated geographical area) and how
t
he risk or opportunity could affect Heartland and
the economy as a whole (e.g., severe droughts
have the potential to impact the price and supply
of food dramatically, leading to inflation and other
d
ownstream impacts). Given the uncertainty
a
round which scenario will prevail, the score
of each risk and opportunity across the three
s
cenarios were aggregated to assess materiality
(i.e., the risks and opportunities with the higher
aggregated scores were the highest rated and
m
ost material).
The actions Heartland could take to mitigate
r
isk and leverage opportunities were identified,
a
llowing the Group to plan and allocate resources
a
ccordingly. These actions are reflected in the
M
etrics & Targets section as well as Heartland’s
t
ransition plan on page pages 20 to 21 of this
s
ection of this report.
Using three customised scenarios enabled
H
eartland to gain further understanding of the
r
isks it had identified in the analysis completed in
p
rior years and identify new climate-related risks
a
nd opportunities. The use of three customised
s
cenarios also enabled Heartland to identify the
risks and opportunities present in each scenario
for its product portfolios, when they are likely to
o
ccur,
and
the
varying
direct
and
indirect
effects
on
Heartland’s business strategy. In turn this enabled
H
eartland to better understand the resilience of its
business model. This work also helped to inform the
G
roup’s metrics and targets.
FY2025 scenario analysis
In FY2025, Heartland Group and Heartland Bank
conducted a refreshed climate scenario analysis
t
o reassess risks and opportunities following the
acquisition of (now) Heartland Bank Australia.
U
sing summarised versions of the same six
climate scenario narratives from FY2024 with
m
ore focus on climate-related impacts and
their downstream consequences, the process
i
nvolved workshops with senior leaders across
Heartland Bank and Heartland Bank Australia, and
a qualitative re-evaluation of climate-related risks
a
nd opportunities identified in FY2024. The analysis
c
onfirmed that the material risks and opportunities
i
dentified in FY2024 remain unchanged for the
G
roup, and existing climate targets continue to be
a
ppropriate.
Heartland Bank Australia will undertake their own
independent scenario analysis exercise to validate
i
ts material risks and opportunities and to obtain
its own Board’s endorsement of those, and of any
t
argets or initiatives that Heartland Bank Australia
w
ishes to pursue in response. Therefore, the risks
a
nd opportunities regarded as material in this
c
limate report may not be the most material for the
Australian business.
Further scenario analysis will be undertaken
t
hereafter when there is a material change to
H
eartland’s strategy or where Heartland expects
t
he outcome may differ materially due to new
i
nformation or tools becoming available.
STRATEGY
10
9 As the personal loan portfolio is not significant to Heartland, Heartland does not evaluate the opportunities specifically.
Anticipated risks and opportunities on product portfolios
The below table sets out Heartland’s anticipated
material risks and opportunities and the product portfolios most likely to be impacted.
Products⁹OpportunityPeriod
• Asset Finance
• Business Relationship
• Open for Business
• High upfront cost of low-emissions vehicles and machinery, and low operating costs, provides opportunities to finance the
low-emissions transition for borrowers.
Immediate to long term
• Rural and Livestock
(NZ)
• Livestock (AU)
• Providing tools and education to agricultural customers enabling them to understand their climate-related risks and become
more climate resilient could retain and attract customers and identify opportunities to finance our customers’ transition to a
low-emissions climate resilient economy.
• Opportunities to finance farm improvements and emissions reduction initiatives for borrowers (New Zealand only).
Immediate to long term
•
A
U Reverse Mortgages
•
N
Z Reverse Mortgages
•
O
nline Home Loans
• Providing borrowers with the information required to improve the resilience of their properties and adapt to changing climates
c
ould retain and attract customers and identify opportunities to finance their transition to a low-emissions economy for
b
orrowers.
Short term, increasing in the
l
ong term
• Increasing
demand for more climate-resilient locations could lead to increased lending in more geographical locations.Medium to long term
• Financing
borrowers’ home improvements to improve the resilience of their properties to changing climates.Immediate, increasing in the
l
ong term
•
Motor Finance• Financing Heartland borrowers’ transition to new generation vehicles.
• Partnering with manufacturers and dealerships of low-emissions technology to ensure that Heartland’s customers have the
option to transition to this technology when they are ready.
• Integrating
sustainability into Heartland’s consumer products to accelerate the decarbonisation of the transport sector.
Immediate to long term
• Offering
alternative transport finance solutions.Short to long term
STRATEGY
11
10 Unless specified otherwise, all amounts laid out in this climate report are in New Zealand dollars, the presentation
currency of Heartland Group’s financial statements, and Heartland Bank’s disclosure statements as at 30 June 2025
and for the year then ended.
11 This included NZ wholesale motor lending. For financial reporting purposes, such lending was included in business
s
egment in FY2024 but in motor segment in FY2025 following the change of how Heartland manages such loans.
There is no such reclassification for climate reporting purposes.
12 Based on Jupiter Intelligence’s climate modelling tools ‘Climate Score’ being over 50 using the Representative
Concentration Pathway (RCP) 8.5 Scenario out to FY2050. The related information for FY2025 is not available on the
date of this climate report. Please refer to Risk Management section for related explanation.
ProductsRiskPeriodGross exposure as at 30 June 2025¹⁰
• Asset Finance
• Business Relationship
• Open for Business
• Damage from severe climatic events, including closure of infrastructure, could
result in losses which could lead to loan defaults. (Physical)
• Cost of compliance with new environmental regulations (including costs of
adopting low-emissions vehicles and machinery) could lead to loan defaults.
(Transition)
Immediate,
worsening in the
long term
Total New Zealand exposure of $1,007.9m¹¹
(2024: $ 1,328.9m)
Total Australian exposure of $nil (2024: $0.2m)
• Rural and Livestock
(NZ)
• Livestock (AU)
• Drought, bushfires, flooding and increasing risk of disease due to rising
temperatures could result in losses or deterioration of economic conditions due to
remediation costs which could lead to loan defaults. (Physical)
• Potential cost of compliance with new environmental regulations (e.g., proposed
on-farm emissions pricing), and increasing emission prices could lead to a
reduction in the viability of Heartland’s agricultural customers who are unable to
adapt effectively, which could lead to loan defaults. (Transition)
• Changes to seasonal weather patterns could impact customers’ production levels
due to changing levels of rainfall or sun hours, which could result in rising costs
leading to decreased viability of customers. (Physical)
Immediate,
worsening in the
long term
Total New Zealand exposure of $720.9m (2024:
$709.7m) (2024: 1.55% of the New Zealand portfolio
is at high risk of physical climate impacts¹²)
Total Australian exposure of $274.1m (2024:
$272.0m)
• AU Reverse Mortgages
• NZ Reverse Mortgages
• Online Home Loans
• Flooding, bushfires, rising sea levels and other physical impacts may impact
specific properties over which Heartland has security, or reduce the value of those
properties due to weakening demand for climate damaged properties or frequently
impacted areas, leading to losses for Heartland. (Physical)
• Insurers may increase premiums or cease to provide insurance in areas impacted by
flooding, bushfires, rising sea levels and other physical impacts, increasing the risk
of losses for Heartland. (Transition)
Immediate,
worsening in the
long term
Total Australian Reverse Mortgage exposure of
$2,137.7m (2024: $1,813.9m)
Total
Australian Residential Mortgage Loans of
$33.5m (2024: $57.2m)
Total New Zealand Reverse Mortgage exposure of
$1,233.3m (2024: $1,068.2m) (2024: 3.59% of the New
Zealand portfolio is at high risk of physical climate
impacts¹²)
Total Online Home Loan exposure of $171.7m (2024:
$317.6m) (2024: 1.13% of the New Zealand portfolio is
at high risk of physical climate impacts¹²)
•
M
otor Finance• Costs of adoption of low-emissions vehicles and increasing adoption of alternative
m
odes of transport could decrease demand for vehicles, reducing the value of
H
eartland’s security and increasing the risk of losses for Heartland. (Transition)
• Wholesale Lending customers may be unable to sell vehicles due to changing
r
egulation or customer demand, increasing the risk of losses for Heartland.
(
Transition)
Short to long termTotal exposure of
$1,564.9m (2024: $1,630.4m)
STRATEGY
12
Current impacts of climate-related risks
Current physical impacts
•
C
yclone Gabrielle severely impacted the North
Island of New Zealand in February 2023. Its
e
ffects
were
widespread,
but
particularly
intense
in the Hawke’s Bay and Tairāwhiti regions, with
large areas of flooding and damage to roads and
o
ther infrastructure. The impact of this event
continued to be felt in FY2024 and FY2025, with
H
eartland writing off a loan of approximately
$1.4 million in FY2025 (2024: provision of $1.6
m
illion) partly as a result of a single business loan
customer who was impacted by this weather
event and unable to recover.
•
O
n 31 July
2023, Heartland Bank entered into
a
Deed of
Indemnity with the New Zealand
G
overnment to implement the North Island
Weather Events Loan Guarantee Scheme. The
supported loans are intended to assist New
Z
ealand businesses to manage the impacts
o
f the North Island weather events (during
A
uckland Anniversary weekend 2023). The
f
acility limit for each supported loan must not
e
xceed $10 million for a maximum of 5 years. The
New Zealand Government guarantees 80% of
l
oss incurred with Heartland Bank holding the
r
emaining 20%. The scheme concluded on 30
June 2024. As at 30 June 2025 Heartland Bank
h
ad supported loans under this scheme of $31.7
million (2024: $33.2 million). No specific provision
a
s a result of subsequent climate events was
m
ade on such loans as at 30 June 2025 (2024:
n
il).
•
I
n late May 2025, a stationary low-pressure
trough resulted in high rainfall and led to multiple
fl
ooding events in New South Wales, Australia
which experts called a ‘1-in-500-year’ event. The
fl
ooding had widespread impact, which included
fatalities, thousands of residents displaced
a
nd significant infrastructure damage. On 29
May 2025, Heartland Bank Australia informed
261 AU Reverse Mortgage customers that the
b
ank would waive any further advance fee for
d
amage-related
e
xpenses.
I
n
ad
dition,
H
eartland
B
ank Australia also intends to waive any 31-day
minimum notice period, early redemption fee,
or interest penalties on term deposits if any
affected customers require funds for damage-
related
expenses. As at 30 June 2025, no
requests had been made.
Current transition impacts
EV demand
The New Zealand Government’s Clean Car Rebate
a
nd Clean Car Discount were removed at the end
of December 2023. As a result, more than 50% of
n
ew cars sold during December 2023 were BEVs or
PHEVs as retailers and consumers made use of the
r
ebate, more than doubling the percentage of new
c
ars
sold
in
June
2023.
The
demand
of
such
vehicles
(
in terms of new registration and market
share)
dropped and has remained flat since December
2
023.¹³ This was also reflected in the drop of new
g
eneration vehicles funded by Heartland during
t
he second half of FY2024 from 15.66% of new
d
rawdowns within Heartland’s Motor Finance
p
ortfolio in the first half to 14.70%. The drawdowns
for new generation vehicles were stable in FY2025
a
nd accounted
for 16.3% of new Heartland Motor
Finance loans written during the year.
StockCo AU x Ruminati partnership
In a strategic collaboration aimed at supporting
s
ustainable farming practices, StockCo AU
announced a two-year pilot with Australian farmer-
led software provider Ruminati in FY2024. Ruminati
i
s an online emissions calculator created
by farmers
for farmers. The platform provides accurate climate
data and emissions information to help track and
v
alidate on-farm climate action across the supply
c
hain.
This collaboration closely aligns with Heartland’s
a
mbition to enable farmers to contribute to their
p
ersonal and industry-wide climate goals while
s
till improving farm productivity and profitability.
This partnership involved providing farmers
access to the newly released Ruminati PRIME
p
latform, allowing them to generate accurate,
d
etailed and personalised emissions estimates.
Wi
thin the platform, farmers can also model the
i
mpact of methane and CO2e abatement options,
s
et and measure against individual emissions
r
eduction targets, and create tailor-made, future-
facing emissions reduction plans. Ruminati’s
VI
SION Dashboard allows Heartland to track its
c
ustomers’ emissions reductions. While less than
1
0 customers are currently sharing their emissions
d
ata, Heartland is continuously looking at ways to
i
ncrease the number of customers who understand
t
heir emissions, have emissions reduction plans in
p
lace and share them with Heartland.
13 EV Market Stats 2025, evdb.nz.
STRATEGY
13
Heartland’s fleet
In FY2025, Heartland continued the transition of
its New Zealand fleet to new generation vehicles.
A
s at 30 June 2025, 97% (2024: 91%) of the fleet
are new generation vehicles. Once the transition
is complete, this is expected to reduce Heartland’s
scope 1 (2024: category 1) emissions¹⁴ by over 60%
from its FY2019 base year.
‘End paper postage’ project
In FY2025, Heartland Bank launched the ‘end paper
postage’ project to reduce the number of letters
posted to customers. This initiative is expected
t
o reduce scope 3 (category 1)¹⁴ emissions by 26.2
tCO2e from FY2021 levels.
Ride-to-own scheme
In FY2025, Heartland initiated a pilot ‘ride-to-own
s
cheme’
for its employees by partnering with
W
orkRide. WorkRide is an employee lease-to-own
scheme, that allows eligible employees to sacrifice
part of their salary to lease an e-bike, bike or
s
cooter of their choice to commute to work, with
the option of owning the e-bike, bike or scooter
at the end of the lease. The scheme is expected
to be rolled out and offered to all New Zealand
e
mployees in the first half of FY2026. Any uptake of
this scheme would help reducing scope 3 (category
7
)¹⁴ emissions.
Proportion of revenue-generating activities aligned with climate-related opportunities
FY2025FY2024
Gross financial receivables relating to financing new generation vehicles (% of entire Motor Finance portfolios)
16%11%
Capital deployment (amount of capital expenditure, financing or investment
deployed toward climate-related risks and opportunities)
FY2025FY2024
Ruminati – Project and vision dashboard subscription- $0.01m
Purchasing new generation vehicles for Heartland’s New Zealand fleet$0.8m$1.41m
Jupiter
Intelligence ClimateGlobal Services – Climate risk modelling tool- $0.14m
Renewable energy certificates (RECs) entitled for the power used at Heartland Bank offices¹⁵$0.002m $0.005m
Emissions
accounting software and emission verification services$0.08m $0.05m
Professional d
evelopment$0.001m $0.005m
Total$0.88m$1.61m
Installation of compost bins
Heartland Bank installed compost bins at its Newmarket, Auckland sites in August 2025. Management
expects to reduce waste sent to landfill from these sites by up to 75% from FY2023 levels, and reduce
H
eartland’s corresponding scope 3 (category 5)¹⁴ emissions.
Capital deployed towards climate-related risks and opportunities
The
below breakdown defines capital deployment in FY2025 in relation to the climate-related risks and
o
pportunities identified through scenario analysis, and other
climate commitments.
Funding new generation vehicles
Funding low-emissions assets is one of Heartland’s largest climate-related opportunities, which is why
Heartland continued to partner with leading new generation vehicle distributors in FY2025. In FY2025, Heartland
p
rovided
$62.2 million (2024: $55.1 million) to fund 863 EVs and 463 PHEVs (2024: 606 EVs and 474 PHEVs).
14 Please refer to section “Understanding Heartland’s GHG emissions” below for details.
15 Excluding Dunedin, Fielding, Havelock North and Wellington offices.
STRATEGY
14
Assets vulnerable to transition risks
The industries that are most vulnerable to transition risks, and the amount and percentage of assets
vulnerable to those transition risks, are monitored in Heartland’s Climate-Related Risks – Composite
Assessment.
Understanding Heartland’s GHG emissions
Heartland has been tracking and reporting its
GHG emissions since FY2020 using the emissions
generated during FY2019 as its baseline year.
Heartland takes an operational control approach
t
o consolidating its emissions in alignment with
t
he GHG protocol and ISO 14064-1:2018. This means
Heartland Group and Heartland Bank disclose the
emissions referable to their respective activities and
t
he emissions of:
Heartland Group
•
H
eartland
B
ank
•
Before 30 April 2024 (for comparative
purposes):
- Heartland Group’s operations in Australia
- Heartland’s equity investments
Heartland Bank
•
Heartland Bank Australia’s operations
(
including those previously controlled by
H
eartland Group from 30 April 2024 onwards)¹⁷
•
H
eartland Bank’s equity investments and debt
i
nvestments in liquid assets (including those
p
reviously owned by Heartland Group from 30
A
pril 2024 onwards)
Total aggregate exposure (TAE) within
sector at risk / % of total receivables
FY2025FY2024
Amount or percentage of assets or business activities vulnerable to transition risks (New Zealand)
Agriculture, forestry and fishing$782.7m / 16.6%$758.9m / 14.9%
Mining$9.3m / 0.2%$10.6m / 0.2%
Manufacturing$26.4m
/ 0.6%$35.1m / 0.7%
Electricity, gas, water and waste services$17.0m / 0.4%$18.4m / 0.4%
Construction$107.9m / 2.3%$125.8m / 2.5%
Wholesale t
rade$7.1m / 0.2%$8.3m / 0.2%
Retail trade and accommodation$8.6m / 0.2%$8.7m / 0.2%
Transport
and storage$297.8m / 6.3%$344.4m / 6.8%
Financial
a
nd
i
nsurance$32.5m / 0.7%$88.6m /
1.7%
Total receivables (total % at risk)$4,710.2m / 27.4%$5,078.4m / 27.5%
Amount or percentage of assets or business activities vulnerable to transition risks (Australia)¹⁶
Agriculture$277.8m
/ 11.4%$272m / 12.6%
Total Receivables (total % at risk)$2,445.5m / 11.4%$2,162.7m / 12.6%
Amount or percentage of assets or business activities vulnerable to transition risks (total)
Total receivables (total % at risk)$7,155.7m / 21.9%$7,241.1m / 23.1%
16 This figure is subject to change following analysis and confirmation by Heartland Bank Australia’s Board approval of risks.
17 For completeness, these emissions are calculated by Heartland Bank and not by Heartland Bank Australia. Heartland Bank Australia is a Group 3 reporting entity under the applicable Australian legislation and will adhere to the reporting
obligations and timeframes thereunder.
STRATEGY
15
In FY2024, both Heartland Group and Heartland
B
ank’s GHG inventories were prepared and disclosed
i
n accordance with ISO 14064-1:2018. From FY2025
onwards, as an attempt to enhance comparability
across CREs in the banking sector, Heartland elected
t
o change its GHG inventory preparation framework
to GHG Protocol. There is no difference on the
classification of scope 1 and 2 emissions between
these two frameworks. Scope 3 emissions under ISO
1
4064-1:2018 are caught under categories 3-6 and are
f
urther split into various subcategories while there
are 15 categories under the GHG Protocol. A mapping
of categorisation in terms of scope 3 emissions
b
etween these two frameworks is laid out below. In
other discussions in this climate report, Heartland
discloses reconciliation of categories between these
two frameworks as necessary.
The Group also aligns its calculation methodologies
with the Partnership for Carbon Accounting
F
inancials’ (PCAF) Financed Emissions – The Global
G
HG Accounting & Reporting Standard Part A
(Second edition, December 2022) (PCAF Financed
Emissions Standard) to calculate financed
e
missions¹⁹ (scope 3 (ISO: category 5; GHG Protocol:
category 15)).
Refer to Appendices 2 and 3 for more detail about
t
he descriptions of each emissions category,
m
ethodologies used to calculate and split the
emissions between Heartland Group and Heartland
Bank.
Heartland initially measured its operational
e
missions²⁰ and committed to reduce them by
35% by FY2025, from the FY2019 base year. Since
Heartland set this target, it has introduced an array
o
f initiatives to reduce its emissions. These initiatives
include but are not limited to:
• transitioning full internal combustion diesel
v
ehicles out of its fleet
•
switching the electricity used at Heartland’s
o
ffices to electricity that is generated and
r
e-invested into renewable energy production
(
most of Heartland Bank’s New Zealand offices)
•
getting RECs for related electricity used in the
m
ajority of Heartland’s New Zealand offices
•
c
onducting waste audits to understand the
a
mount of waste generated by Heartland and
w
hat can be diverted from landfill to reduce
w
aste-related
e
missions.
ISO 14064-1:2018GHG Protocol
CategorySubcategory (Annex B)
3. Indirect GHG emissions
from transportation
• Upstream transport and distribution
of goods
• Downstream transport and distribution
of goods
• Employee commuting
• Client and visitor transport
• Business travel
3. Fuel- and energy-related activities (not
included in scope or scope 2)
4. Upstream transportation and distribution
6. Business travel
7. Employee commuting
9. Downstream transportation and distribution
4.
Indirect GHG emissions
from products used by an
o
rganisation
• Purchased goods
• Capital goods
•
D
isposal of solid and liquid waste
•
U
pstream leased assets
•
U
se of services
1. Purchased goods and services
2. Capital goods
5.
Waste generated in operations
8. Upstream leased assets
5.
Indirect GHG emissions
associated with the use
of products from the
organisation
• Use stage of the sold products
• Downstream leased assets
• End of life stage of sold products
• Investments
10. Processing of sold products
11. Use of sold products
12. End-of-life treatment of sold products
13. Downstream leased assets
14. Franchises
15. Investments
6.
Indirect GHG emissions
from other sources¹⁸
Subject to reporting entity’s definition Optional “other” category GHG Protocol
18 Heartland has no emissions falling into this category.
19 The emissions generated through customers that are enabled by finance provided by Heartland.
20 Includes
scope 1, 2, and selected scope 3 emissions that Heartland has operational control over including freight, flights, car rentals, taxi, working from home emissions, electricity transmission losses and waste generated in operations.
STRATEGY
16
GHG emissions sourcesGHG
Protocol
ISO 14064-
1:2018
FY2019
(tCO2e)
FY2020
(tCO2e)
FY2021
(tCO2e)
FY2022
(tCO2e)
FY2023
(tCO2e)
FY2024
(tCO2e)
FY2025
(tCO2e)
% change from
FY2024
% change from
FY2019 base year
Direct GHG emissions that occur from sources owned or controlled by Heartland (Direct GHG Emissions)
Company vehicles (diesel, petrol,
hybrid)²¹
Scope
1 Category 1 489406427296.39361.67286.74265.6(7%)(46%)
GHG emissions associated with the generation of electricity that is purchased and consumed by Heartland (Electricity Indirect GHG Emissions)
Electricity
(
market-based)²¹Scope 2 Category 2 10287.5 17.518.1328.9746.0355.521%(46%)
Emissions that are a consequence of Heartland’s activities, but occur from sources not controlled by Heartland other than purchased electricity (Other Indirect GHG Emissions)
Printed materials sent to customers
Scope 3
(category 1)
Category
4 6232.5 31.4231.6638.1122.1659.5169%(4%)
Energy
/ Electricity-related activities
Scope
3
(category 3)
Category 3 8.38.59.99.55 9.67.6110.842%30%
Waste generated in operations
Scope 3
(category 5)
Category
4 212258234.16.715.399.5411.116%(95%)
Business travel (flights, rentals,
taxi only)
Scope 3
(category 6)
Category 3 283.04160.173.8156.4445.36314.43264.9(16%)(6%)
Employee
commuting (work from
h
ome emissions only)
Scope 3
(
category 7)
Category
3 N/A N/A5.0841.6425.6611.109.0(19%)N/A
Total
scope 3 (ISO: categories 3 – 4)565.34459.1354.31145.95534.12364.84355.2(3%)(37%)
Total1,156.34952.6798.81460.47924.7669 7. 61676.4(3%)(42%)
Since its FY2019 base year, Heartland has achieved its goal and delivered a 42% reduction in operational emissions (as shown below).
In FY2023, Heartland began to take a more comprehensive approach to calculating its emissions by also measuring “downstream emissions” which includes a wider range
o
f emission categories, such as hotel accommodation, emissions generated through certain purchased goods and services, and financed emissions. In FY2025, Heartland
h
as set new short-term emissions reduction targets which includes Heartland’s ambition to reduce other emissions throughout its value chain. As a result, the FY2019
b
ase year will not be used after FY2025. Heartland has set a new science-aligned target to reduce Heartland’s absolute operational emissions from its New Zealand based
operations by 37.8% by FY2030 from the FY2025 base year, including an absolute reduction of scope 1 and 2 emissions 37.8% from the FY2025 base year.
21 ISO categories 1 and 2 (market and location based) tCO2e absolute emissions of Heartland Group and its subsidiaries were included in the scope of PwC’s limited assurance engagement for the year ended 30 June 2024. For the year ended
30 June 2025, PwC’s limited assurance engagement covers GHG Protocol scope 1 and 2 (location based) tCO2e absolute emissions for Heartland Group and its subsidiaries and Heartland Bank and its subsidiaries. No other amounts or
calculations have been included in the assurance engagement and are not covered by the limited assurance reports issued.
STRATEGY
17
21 ISO categories 1 and 2 (market and location based) tCO2e absolute emissions of Heartland Group and its subsidiaries were
i
ncluded in the scope of PwC’s limited assurance engagement for the year ended 30 June 2024. For the year ended 30 June
2025, PwC’s limited assurance engagement covers GHG Protocol scope 1 and 2 (location based) tCO2e absolute emissions
for Heartland Group and its subsidiaries and Heartland Bank and its subsidiaries. No other amounts or calculations have
b
een included in the assurance engagement and are not covered by the limited assurance reports issued.
GHG emissions sourcesGHG ProtocolISO 14064-1:2018Emissions per scope / category (tCO2e)
FY2025FY2024 (Restated)
Direct
GHG Emissions²¹Scope 1Category 1266287
Electricity Indirect GHG
Emissions²¹
Scope 2
(location
based)
Category 2
(location based)
123127
Scope 2
(market
based²²)
Category 2
(market based²²)
5646
Other Indirect GHG EmissionsScope 3 (category 1)Category 43,5161,779
Scope 3 (category 2)Category 479
N/A
Scope 3 (category 3)Category 37778
Scope 3 (category 5)Category 44011
Scope 3 (category 6)Category 3299358
Scope 3 (category 7)Category 3426237
Scope 3 (category 13)Category 56,6276,668
Scope 3 (category 15)Category 5865,058923,739
Total (location based)876,512933,284
Total (market based)876,444933,203
Heartland Bank and its subsidiaries
Heartland Bank and its subsidiaries are
r
esponsible for the emissions generated
throughout its operations (including
emissions referable to its employees) and
value chain. From 1 May 2024, this included the
e
missions generated through the operations
of its subsidiary, Heartland Bank Australia.²⁴
There
is a significant increase in scope 3 (category 1) emissions in FY2025 following the inclusion of new
m
aterial emissions-generating activities of this category in GHG inventories this year. Heartland Group also
i
ncluded
emissions arising from purchase of capital goods (category 2) this year.
Emissions
intensity of Heartland Group and its subsidiaries for FY2025 was 2,728 (2024: 3,211) tCO2e/$
m
illion²³. Scope 2 (location based) emissions in FY2024 were restated from 105 tCO2e to 127 tCO2e following
a
significant change of most recently published relevant emissions factors. The total emissions were also
c
hanged from 933,262 tCO2e to 933,284 tCO2e.
Heartland Group and its subsidiaries
In
FY2025, Heartland Group and its subsidiaries emitted a total of 876,512 (2024: 933,284 (restated)) tCO2e throughout its value chain, as detailed below²¹.
22 Market based takes into account renewable energy certificates obtained by Heartland Bank for all of its New Zealand offices except for its
Dunedin, Fielding, Havelock North and Wellington offices.
23 Total
tCO2e/$ million of Heartland’s net operating income in respective financial years.
24
For completeness, these emissions are calculated by Heartland Bank and not by Heartland Bank Australia. Heartland Bank Australia is a
G
roup 3 reporting entity under the applicable Australian legislation and will adhere to the reporting obligations and timeframes thereunder.
STRATEGY
18
Financed and leasing emissions
Financed emissions are the emissions that
are generated by Heartland’s customers and
enabled by finance provided by Heartland.
Leasing emissions are originated when
H
eartland leases out owned vehicles and
properties, as well as entrusts farms to be
operated by an external party. As a financial
institution, Heartland’s financed and leasing
emissions are the source of most of its
emissions and, therefore, where Heartland
has the biggest potential to make positive
climatic impacts. By measuring its financed
a
nd leasing emissions, Heartland can better
i
nform its approach on how to assist its
customers in the just transition to a low-
carbon
economy. Obtaining improved data
quality would enable Heartland to make
more informed finance and partnership
decisions and allow better discussions
b
etween Heartland and its customers about
t
ransitioning to a low-emissions economy.
In
t
his regard, Heartland intends to continue to
improve the data quality score of its portfolios,
such as Asset Finance, Business Relationship,
R
ural, and Livestock Finance in New Zealand as
t
hese make up most of Heartland’s emissions
as detailed in the following table.
Heartland
estimates its financed and leasing
r
elated emissions in FY2025 to be 871,685
(2024: 930,407) tCO2e.
There is a significant increase in scope 3 (category 1) emissions in FY2025 following the inclusion of new
material emissions-generating activities of this category in GHG inventories this year. Heartland Bank also
included emissions arising from purchase of capital goods (category 2) this year.
Emissions
intensity of Heartland Bank and its subsidiaries for FY2025 was 2,672 (2024: 3,842) tCO2e/$
million²⁵. Scope 2 (location based) emissions in FY2024 were restated from 71 tCO2e to 93 tCO2e following
a
significant change of most recently published relevant emissions factors. The total emissions were also
c
hanged from 916,440 tCO2e to 916,462 tCO2e.
For FY2025, Heartland Bank and its subsidiaries emitted a total of 876,278 (2024: 916,462 (restated)) tCO2e
throughout its value chain, as detailed below²¹.
GHG emissions sourcesGHG ProtocolISO 14064-1:2018Emissions per scope / category (tCO2e)
FY2025FY2024 (Restated)
Direct
GHG Emissions²¹Scope 1Category 1265241
Electricity Indirect
GHG
E
missions²¹
Scope 2
(location
based)
Category 2
(location based)
11793
Scope 2
(market
based²²)
Category 2
(market based²²)
5112
Other Indirect GHG EmissionsScope 3 (category 1)Category 43,3951,158
Scope 3 (category 2)Category 479
N/A
Scope 3 (category 3)Category 37664
Scope 3 (category 5)Category 4407
Scope 3 (category 6)Category 3216112
Scope 3 (category 7)Category 3405208
Scope 3 (category 13)Category 56,62710,065
Scope 3 (category 15)Category 5865,058904,514
Total (location based)876,278916,462
Total (market based)876,212916,381
21 ISO categories 1 and 2 (market and location based) tCO2e absolute emissions of Heartland Group and its subsidiaries were
i
ncluded in the scope of PwC’s limited assurance engagement for the year ended 30 June 2024. For the year ended 30 June
2
025, PwC’s limited assurance engagement covers GHG Protocol scope 1 and 2 (location based) tCO2e absolute emissions
for Heartland Group and its subsidiaries and Heartland Bank and its subsidiaries. No other amounts or calculations have
b
een included in the assurance engagement and are not covered by the limited
assurance reports issued.
22 Market based takes into account renewable energy certificates obtained by Heartland Bank for all of its New
Zealand offices except for its Dunedin, Fielding, Havelock North and Wellington offices.
25 Total tCO2e/$ million of net operating income of Heartland Bank and its subsidiaries in respective financial years.
STRATEGY
19
FY2025FY2024
tCO2e% of categories
13 and 15 (ISO:
category 5)
Emissions
intensity
(kg CO2e/$)
PCAF
score
(option)²⁶
tCO2e% of categories
13 and 15 (ISO:
category 5)
Emissions
intensity
(kg CO2e/$)
PCAF score
(option)²⁶
Downstream leased assets (category 9 (ISO: category 5) activities)
Operating lease commercial9780.1%0.099660.1%0.11
Operating lease motor5240.1%0.078680.1%0.15
Other properties managed
by / leased to other parties
5,1250.6%-4,8340.5%-
Subtotal6,6276,668
Financed emissions (category 15 (ISO: category 5) activities)
Rural (NZ)60,2416.9%0.13 5.00 (3b)90,77610%0.185.00 (3b)
Livestock (NZ)340,09439%1.89 5.00 (3b) 329,20035%1.655.00 (3b)
“Leased” Livestock NZ²⁷119,70713.7%2.13127,94514%9.59
Livestock (
AU)²⁷,²⁸81,1319.3%0.2917,8672%0.07
Motor
Finance106,44312.2%0.07 2.07 (2a)159,94217%0.102.07 (2a)
Asset
Finance48,5245.6%0.08 4.84 (3b)66,0647%0.054.87 (3b)
Business Relationship Loans42,9864.9%0.20 4.84 (3b)79,4679%0.215.00 (3b)
Open for Business6,0160.7%0.104.96 (3b)13,0021%0.154.96 (3b)
Wholesale Finance NZ6,5530.8%0.05 5.00 (3b)21,2682%0.155.00 (3b)
Online
Home Loans NZ1990.02%0.02 4.00 (2b)2890.03% 0.00094.01 (2b)
Residential NZ1230.01%0.025.00 (3)2800.03%0.045.00 (3)
Residential AU²⁸1,2200.1%0.045.00 (3)4430.05%0.015.00 (3)
Reverse Mortgages (NZ)1,8260.2%<0.014.01 (2b)1,3410.1%0.014.01 (2b)
Reverse
Mortgages (AU)²⁸11,3311.3%0.015.00
(3)1
0,9511%0.015.00
(3)
L
isted and unlisted equity8530.1%<0.012.58 (1b)1,3570.2%0.034.98 (3b)
Debt
investments in listed
c
orporate and government
b
onds and notes
36,8604.2%<0.011.02 (1a)N/AN/AN/AN/A
Personal Loans9520.1%0.083,5430.4%0.16
HarmoneyN/AN/AN/A25<0.01%0.17
Subtotal865,058923,760
Total871,685930,407²⁹
Except for Livestock (AU),
t
he increase or decrease
i
n emissions across years
were primarily driven by
the increase or decrease
i
n the corresponding
loan portfolios at the
end of the financial
years. The emissions
a
rising from Livestock
(
AU) has increased in
FY2025, triggered by a
return to growth with
o
ver one million livestock
funded in FY2025.
H
eartland
a
lso
i
ncluded
emissions arising from
d
ebt investments
i
n listed corporate
and government
bonds and notes in
FY2025. Heartland’s
fi
nanced and leasing
emissions calculation
m
ethodologies and how
H
eartland
es
timates
e
missions can be found
in Appendix 2.
26 Except for “Leased” Livestock NZ and Livestock (AU) (see footnote 27), applicable to financed emissions only.
27 “Lease” Livestock NZ and Livestock (AU) were classified as downstream leased assets in FY2024 based on the legal
f
orms of the related transactions. Heartland has reclassified these to financed emissions to align with Heartland’s
approach to financial reporting.
28 For completeness, these emissions are calculated by Heartland Bank and not by Heartland Bank Australia.
Heartland Bank Australia is a Group 3 reporting entity under the applicable Australian legislation and will adhere to
the reporting obligations and timeframes thereunder.
29 Sum differs due to rounding numbers
STRATEGY
20
Internal emissions price
Heartland does not use an internal emissions price
f
or business activity. However, where needed,
t
he current New Zealand Emissions Trading
Scheme (ETS) price per New Zealand Unit is used
(
e.g., savings on potential
carbon offsets when
considering the cost between an EV and ICE
vehicle).
Heartland’s transition plan
In FY2025, Heartland developed its transition plan for
its New Zealand based operations, which outlines:
• Heartland’s climate-related strategic ambition to
b
ecome a climate resilient, net-zero operational
e
missions, financial services provider, that
provides financial products which support its
customers to reach their own climate resilient
t
argets
• how Heartland plans to respond to the risks and
o
pportunities presented by a changing climate,
i
ncluding how Heartland’s current business
m
odel might change or adapt to mitigate the risk,
a
nd capitalise on the opportunities
•
the extent to which the transition plan aspects
of its strategy are aligned with its internal capital
d
eployment and funding decision-making
processes.
Heartland’s transition plan is built upon the
t
hree core pillars of Heartland’s environmental
s
ustainability strategy. These pillars include several
s
upporting targets (shown within the Metrics &
Targets section on pages 23 to 25) and initiatives
o
ver the short, medium, and long term that are
aligned to the execution of the transition plan,
a
nd Heartland’s commitments as a member of the
Climate Leaders Coalition.
Heartland’s
transition plan includes initiatives that
directly or indirectly require capital expenditure,
w
ith expenditure and funding to be allocated on
a case-by-case basis. Allocation of capital and
project funding is considered as part of Heartland’s
a
nnual
budge
ting
a
nd
bu
siness
p
lanning
c
ycles
and Board strategy processes. Transition aspects
o
f Heartland’s strategy that are aligned with its
internal capital deployment and funding decision-
making process will likely change annually and will be
d
isclosed within Heartland’s future climate reports,
but are expected to include investments regarding:
•
i
mprovements in climate risk capability including
improved emissions measurement tools, climate
h
azard risk data, education and upskilling
Heartland employees, and customers’ ability to
m
anage climate risk
•
membership and subscriptions to industry
g
roups that advocate for policy that supports the
j
ust transition to a low-emissions economy and
lo
w-emissions
t
echnology
u
ptake
•
i
nternal investment into Heartland’s workspaces
and people to decarbonise Heartland’s
o
perations, including, but not limited to, water
and waste optimisation and reduction initiatives,
E
V charging installations, commuting to work
r
elated emissions reduction initiatives, and the
procurement of low-emissions renewable energy
•
e
xpenditure on system upgrades that allow
for better climate-related reporting, the
p
rocurement of low-emissions goods and
s
ervices, and engagement with the supply chain
•
funding related to decarbonisation (low-
emissions vehicles or energy efficient
t
echnology) or climate resiliency initiatives for
H
eartland’s customers.
Assumptions
surrounding the transition plan
can be found in the ‘Transition plan: limitations,
u
ncertainties, key assumptions and dependencies’
s
ection in Appendix 3.
Due to the nature of climate-related risks, many of
the risks and opportunities will transpire over the
m
edium to long term,
and accordingly, there is a
d
egree of uncertainty associated with them (for
this reason a large number of the initiatives reach
o
ut only over the short
term, to allow for Heartland
to complete the disclosed initiatives and then re-
assess
newly available low-emissions technology
a
nd market demand). Instead
of ignoring these due
to them not impacting Heartland now, Heartland
m
onitors ‘signposts’ which indicate that a particular
risk or opportunity is more or less likely to manifest
s
uch as monitoring carbon prices, or market share
t
rends for alternative modes of transport.
Heartland monitors its signposts, along with
m
etrics and targets that align with the risks
a
nd opportunities identified within scenario
a
nalysis quarterly and reports its findings to the
S
ustainability Committee. This report will allow
Heartland to monitor the progress of its transition
p
lan execution over the long-term, including
t
he execution of initiatives to capitalise on new
o
pportunities as they arise and take proactive
a
ction against climate-related
risks.
STRATEGY
21
SummaryStrategic ambition components of Heartland’s transition
plan
Immediate Short term Medium term Long term
1. Integrate
climate risks
into lending
decisions
Implementation
Embed
climate considerations into the lending decisions and
portfolio assessments of Heartland’s high-risk portfolios.
Automate c
ustomer
c
limate
risk assessment and
monitor high-risk property
exposure.
Continue to review policies and conditions on identified high climate
risk sectors and/or businesses that are otherwise harmful to the climate
to effectively mitigate risks to align with Heartland’s climate resilient
objectives and priorities.
Engagement
Engagement
and education of customers on their climate
risks.
Educate customers about their climate-related risks and opportunities, and risk
m
anagement activities to allow customers to make climate-informed decisions
for themselves and their businesses that are both effective and efficient.
Governance
Consistently
improve Heartland
’s
climate risk and
opportunity assessment and disclosure capabilities as new
d
ata and information is released.
Review
Heartland’s climate-related risks and opportunities frequently to ensure they are still current and relevant including
r
eview of whether the scenario analysis process needs to be undertaken, or the transition plan needs to be updated.
Implementation/Governance
Consistently improve Heartland’s climate risk and
opportunity assessment and disclosure capabilities as new
data and information is released.
Partner with financed emission and climate risk data providers to improve
Heartland’s understanding of its climate-related risks.
2. Fund
Heartland
borrowers’
just transition
to a net-zero
economy
Implementation
Provide
the funding for customers to transition to a
l
ow-emissions, and climate resilient future, utilising product
i
nnovation where possible.
Product
innovation and execution of existing strategy with new low-emissions
t
echnology:
• Asset Finance
•
Mo
tor
F
inance
• Reverse Mortgages (NZ)
• Rural and Livestock (NZ).
Engagement
Partner
and collaborate with industry leaders that provide
t
echnologies, services, advocacy and tools that accelerate
the just transition for Heartland’s key sectors.
•
A
dvocate for climate topics in public forums to accelerate just transition
•
P
rovide customers education on benefits and incentives for low/zero-emissions technology
3. Embed
sustainability
into what
Heartland does
Implementation
Reduce
operational emissions in line with 1.5°C.
Reduce
Heartland’s absolute operational emissions from its New Zealand based
o
perations by 37.8% by FY2030 from the FY2025 base year, including an absolute
r
eduction of scope 1 and 2 emissions 37.8% from the FY2025 base year.
Lead
scope 3 carbon
r
eduction via waste
d
iversion,
c
arbon
budgets, and low-
emissions p
olicies.
Reach net-
zero
GHG
o
perational
e
missions by
F
Y2050.
Continue
the transition of Heartland’s fleet to battery electric vehicles, and low-
emissions
vehicles where battery vehicles are not appropriate (~60% emissions
r
eduction in scope 1 emissions).
Implementation
Empower employees to support customers and communities
t
hrough climate capability training, culture, and knowledge.
• Coordinate volunteer days with local eco-focused nonprofits organisations
•
P
rovide regular climate education to staff
•
U
pskill employees and promote sustainable practices
Engagement
Proactively
enabling and engaging with employees, Board,
s
uppliers, and key corporate stakeholders across the value
c
hain to reduce their emissions and reduce their climate
c
hange
r
isks.
Reduce
employee
e
missions by encouraging
lo
w-emissions
t
ransport
o
ptions.
Collaborate
with key suppliers to improve GHG
r
eporting, ensure transition plans, and reduce
s
cope 3 emissions and supply chain risk.
02
Metrics &
Targets
METRICS & TARGETS
23
Strategic ambition components of
transition plan
Ta r g e tFY2024 status FY2025 statusCommentary
Integrate climate
change risks into
lending decisions
Implementation
Embed climate
c
onsiderations into
t
he lending decisions
a
nd portfolio
a
ssessments
o
f
H
eartland’s
h
igh-risk
p
ortfolios.
Limit Heartland’s “high” climate-
related risk exposure within its NZ
Reverse Mortgage and Online Home
Loan³⁰ portfolios to less than 4% of total
exposures.
Achieved
(Exposure of
3.1%)
On hold • “High” risk is where the Climate Score assessed by Jupiter
Intelligence for an exposure exceeds 50.
• While Heartland is in the process of negotiating an
alternative supplier following the end of the contract with
Jupiter Intelligence (see Risk Management section for
details), it had not concluded the result at 30 June 2025.
S
et Heartland’s risk appetite limit for
“
high”
c
limate-related
r
isk
e
xposures
w
ithin its AU Reverse Mortgage portfolio
d
uring
F
Y2025.
UnderwayUnder reviewDue to Heartland switching climate risk modelling tool provider
i
n the second half of FY2025, this is yet to be implemented.
O
nce governance arrangement and strategy is set and agreed
b
y the Heartland Bank Australia Board, climate-related targets
a
nd metrics will be confirmed for Australia and articulated
w
ith appropriate reporting setup to support oversight and
g
overnance.
Extend Heartland’s climate-related risk
tool to the credit assessment process for
new Reverse Mortgage, Online Home Loan,
Livestock Finance and Rural exposures in
New Zealand during FY2026.
Not yet startedOn holdDue to Heartland switching climate risk modelling tool provider
in the second half of FY2025, this is yet to be implemented and
is expected to start in FY2026. Due to Online Home Loans being
wound down, the climate-related risk tool is not expected to
be incorporated into the application process for these loans.
Heartland Bank Australia targets have not yet set and adopted,
as it is a Group 3 reporting entity to comply with AASB S2
Climate-related Disclosures (A ASB S2) for climate-related risks
and opportunities and is actively developing its own tailored
s
trategy.
Apply Heartland’s Environmental Risk
Screening and Sustainability Tool to all
new Rural and Business customers³¹ in
New Zealand during FY2025 and require
the provision of supporting information
from FY2026.
19.31%³²Achieved
(100%)
By end of FY2025, 232 customers were assessed using the
tool. Results showed that the majority of ratings fell within low/
medium risk profile. It presents low risk from reputational and
regulatory perspectives. This is now set into business-as-usual
processes, and the target will not be renewed into FY2026.
Engagement
Engagement
a
nd education of
customers on their
climate risks.
Begin surveying all Rural and Livestock
customers in New Zealand, on their
awareness of biohazard risks, climate-
related physical hazards, and climate-
related transition risks with the intention
of surveying all by the end of FY2028.
Not yet startedOn holdThis is a FY2025 target that has been rolled over to begin in
FY2026 due to Heartland switching climate risk modelling tool
provider in the second half of FY2025. The climate risk data will
allow for more data informed conversations with customers. The
new timeframe aligns with Heartland Bank’s scheduled review
period for its Rural Direct customers allowing this to be done at
the next credit review. Heartland Bank Australia targets have not
yet set and adopted, as it is a Group 3 reporting entity to comply
with AASB S2 for climate-related risks and opportunities and is
actively developing its own tailored strategy.
30 Does not include Heartland’s legacy residential home loan exposures, which are grandfathered.
31 With a TAE of at least $1 million.
32 19.31%
of approvals since September 2023.
METRICS & TARGETS
24
Strategic ambition components of
transition plan
Ta r g e tFY2024 status FY2025 statusCommentary
Integrate climate
change risks into
lending decisions
Engagement
Partner
a
nd
c
ollaborate with
i
ndustry
leaders that
p
rovide
t
echnologies,
ser
vices,
a
dvocacy
a
nd tools that
a
ccelerate
t
he
j
ust transition for
H
eartland’s key
s
ectors.
Engagement
Engagement
and education of
customers on their
climate risks.
Select partner(s) to help launch a
portfolio-specific climate-related
communication strategy by FY2027.
Not yet startedNot completeNot completed during FY2025. This target is now extended
to FY2027 in order to provide more time for low-emissions
technology to be available in selected portfolios to deliver
portfolio-specific communication strategies that add value to
the customers.
Implementation/
Governance
Consistently improve
Heartland’s climate
risk and opportunity
assessment
a
nd disclosure
c
apabilities as new
d
ata and information
i
s
re
leased.
Improve
Heartland’s financed emissions
data quality by understanding the
on-farm emissions of its 100 largest
Australian Livestock Finance borrowers,
and 100 largest New Zealand Rural or
Livestock Finance borrowers, by the end
of FY2025.
UnderwayNew Zealand:
39/117
Australia:
0/
100
Australia – Once governance arrangement and strategy is set
and agreed by the Heartland Bank Australia Board, climate-
related targets and metrics will be confirmed for Australia
and articulated with appropriate reporting setup to support
oversight and governance.
New Zealand – Contacted 117 customers, received emission
i
nformation for 39.
H
eartland Bank will continue to work on understanding the
o
n-farm emissions of its customers to better understand its
t
ransition risks, and better support its customers in meeting
t
heir environmental responsibilities where needed.
Implementation/
Governance
Consistently improve
H
eartland’s climate
r
isk and opportunity
a
ssessment
a
nd disclosure
c
apabilities as new
d
ata and information
i
s
re
leased.
I
mprove Heartland’s financed emissions
data quality
by achieving an overall
we
ighted average PCAF data quality score
o
f less than 4 by the end of FY2027.
Underway
(4.38)
3.83Heartland has onboarded
Generate Zero, a financed emissions
e
stimation tool, which allows it to gain a PCAF data quality score
o
f 4 for most of its New Zealand based property exposures.
Heartland has estimated
the financed emissions of its
M
otor Finance portfolio in line with PCAF Financed Emissions
S
tandard, and gain a PCAF Data Quality Score of 2 for the
m
ajority of its portfolio.
For further information on financed
emissions calculation
m
ethodologies, refer to Appendix 2.
METRICS & TARGETS
25
Strategic ambition components of
transition plan
Ta r g e tFY2024
status
FY2025 statusCommentary
Fund Heartland
borrowers’
transition to a net-
zero economy
Implementation
Provide the funding for
c
ustomers to transition
t
o a low-emissions,
a
nd climate resilient
f
uture, utilising product
i
nnovation where
p
ossible.
Increase the percentage of new
generation vehicles funded in the New
Zealand Motor Finance portfolio year on
year (from a FY2024 base year) to 30% by
FY2030.
Established
baseline
(of 15% new
generation
lending)
16.3% Heartland Bank continues to partner with new generation
vehicle distributors in FY2025 such as Kia, Jaguar Land
Rover, Tesla, MG, Peugeot Citroen, and Opel positioning
Heartland Bank as a leading new generation vehicle
financier.
Heartland’s market share of funding for
new generation vehicles will exceed
the total market share of its New Zealand
Motor Finance portfolio from FY2025.
Commences
in FY2025
Heartland’s market
share of new
vehicles: 4.29%.
New new-
generation vehicle
m
arket
s
hare:
2
.68%.
Heartland
achieved market share of funding new new-
generation vehicles of 2.68% when its Motor Finance
portfolio accounted for 4.29% of market share for new
vehicles by 30 June 2025.
This target is greatly influenced by external factors outside
o
f Heartland’s control and after further review will not be
r
olled over into FY2026.
Embed
sustainability into
what Heartland
does
Implementation
Reduce
o
perational
e
missions in line with
1.
5°C.
Reduce Heartland’s absolute operational
e
missions from its New Zealand based
o
perations by 37.8% by FY2030 from the
FY2025 base year, including an absolute
r
eduction of scope 1 and
2 emissions 37.8%
f
rom the FY2025 base year³³.
(Pre-FY2026: 35% by the end of FY2025
(
from the FY2019 base year of 1,156.34
t
CO2e)).
Underway
(40%
r
eduction on
F
Y2019 base
y
ear)
Not yet started
(Pre-FY2026
t
arget: achieved)
Implementation
Empower
employees to
s
upport customers and
c
ommunities through
c
limate
c
apability
t
raining, culture, and
k
nowledge.
Develop an internal climate risk
professional development course
by
FY2026 to upskill and establish
climate knowledge within employees
and encourage individual sustainable
practices. The intention is for all Heartland
employees to complete the course by
FY2027.
Not yet
started
Not yet started
Implementation
Reduce
o
perational
e
missions in line with
1.
5°C.
Reduce
Heartland’s absolute operational
e
missions to net-zero by FY2050 from a
FY2025 (2024: FY2023) baseline, in line
w
ith the Paris Agreement.
Underway
(25%
r
eduction
f
rom FY2023
b
ase year)
N
ot yet started
(Pre-FY2026:
27%
r
eduction from
F
Y2023 base year)
Heartland developed its transition plan for its New Zealand
b
ased operations in FY2025 to set a path toward achieving
t
his target. The transition plan identifies the extent to
w
hich Heartland will rely on offsets and other market-based
i
nstruments such as renewable energy procurement to
m
eet this target. See Strategy section for more details.
33 This emissions reduction target was set in line with SBTi’s guidance for targets set after 2020 for limiting g
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Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.