Releasing its annual results, Heartland said the average level of receivables was higher, as the 2017 year had strong growth in the final quarter and there were higher repayments later in the latest year, ended June 30, as several large exposure loans were repaid.
At year-end, the rural loan book was $656.2 million, down from $675.5m a year earlier.
However, the average book rose to $665.8m from $614m year-to-year.
The division’s net operating income was $32.3m, up $3.1m.
Managing director Jeff Greenslade said Heartland is focusing on livestock lending as a priority over traditional rural relationships and larger risk loans.
Rural division impairments rose to $1.2m, up from just $300,000 a year earlier, because of provisions on larger loans.
The division’s impairment expense as a percentage of the loan book was very low at 0.17%. That was a lower level than in the bank’s core divisions, with household at 0.63% and business at 0.76%.
Rural lending made up 17% of the total lending book but the division was not mentioned as a core business for the group.
Increasing livestock lending, via the digital platform Open for Livestock, is among the new business targets.
Heartland reported an after-tax profit of $67.5m for the year, up from $60.8m, on net operating income of $196.8m, a 15% lift over the previous year. The total loan book was $4 billion at June 30.
A highlight for the group was a 39% increase in Australian operations, with total lending at $721m. Of that, $677m was in the fast-growing reverse mortgage business.
Heartland will pay a final dividend of 5.5c a share on September 21. That makes a total of 9c out of earnings a share of 13c.
