Heartland New Zealand, which expects to hear back on its banking licence application before Christmas, sees flat profit in the 2013 financial year and has announced a pre-Christmas special dividend.
The Auckland-based lender told shareholders at today's annual meeting net profit will probably be between $21 million and $24 million in the year ending June 30, 2013. That compares to annual profit of $23.6 million in the 2012 year.
That profitability represents a 45% to 66% improvement in pre-tax profit and depends on asset growth, lower cost of funds from a successful bank registration, a focus on costs and charges on impaired assets staying at current levels, Heartland saysin its AGM presentation published on the stock exchange.
The company's board also declared a 1.5 cents per share special dividend, with a record date of December 14, payable on December 21.
Directors gave no details on future dividend policy, saying only that payouts would be based dividends on its after-tax profit, subject to maintaining a prudent level of capital.
"Heartland's capital needs will vary from time to time, depending on a range of factors (including regulatory and credit rating requirements, general economic conditions, current and expected growth and the mix of business)," the company says in a statement.
The shares rose 1.5% to 69 cents and have rallied 43% this year. The stock is rated an average "outperform", based on two analyst recommendations compiled by Reuters with a median target price of 65 cents.
Heartland was formed through the merger of Pyne Gould's Marac Finance unit with the Canterbury and Southern Cross building societies, with a view to securing a banking licence in a shift away from a new regulatory regime that imposed stricter conditions on non-bank financial institutions.
Last month Heartland had its investment grade BBB- credit rating affirmed with a stable outlook by Standard & Poor's, which cited the lender's strength as very strong capital and earnings assessment, good geographic and business diversity, and sticking to its timeline for its post-merger plan.