Lending for livestock by Heartland Bank grew 57% in the financial year ended June 2022 as the number of customers in New Zealand and Australia increased.
A product called Sheep and Beef Direct contributed half of the new business, and the whole category of livestock loans was up $62.3 million to $171m.
Dairy Direct has also been launched, accessed through a digital device rather than visiting a bank branch.
The annual results of the bank included a 17.5% increase in rural receivables to $689.1m compared with $586m in FY21.
Heartland has over $6 billion of total lending, a third of which is reverse mortgages in NZ and Australia.
Rural lending contributed $30.2m net operating income (NOI) to the bank’s overall NOI of $267m and net profit after tax of $95.1m, up 9.3% on the previous financial year.
The bank’s strategy is to target parts of the livestock market that are being under-serviced by the major banks.
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Heartland came together as a listed bank 11 years ago with the merger of CBS Canterbury, Marac Finance, Southern Cross Building Society and, later, PGG Wrightson Finance.
During the year Heartland completed the acquisition of StockCo in Australia, a leading livestock finance business based in Brisbane.
The purchase cost A$154.4m (about $172.2m), funded with a bridging loan by a major Australasian bank.
StockCo has assets of A$358m and a leading position in a market estimated to be worth $7 billion.
Heartland has announced a $200m equity raise to repay that bridging loan and provide additional growth capital.
The $130m fully underwritten placement has been fully subscribed and $70m is being offered to existing shareholders through a share purchase plan at a price expected to be about $1.80.
Managing director Jeff Greenslade said Heartland is looking for further opportunities for growth in Australia and these would be digital businesses, not brick and mortar. One of the company’s major aims is frictionless service at the lowest cost.
