Heartland 2023 Annual General Meeting

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

NZX/ASX release
9 November 2023

Heartland 2023 Annual General Meeting

The Annual General Meeting of Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) will
be held online today at www.virtualmeeting.co.nz/hgh23 and in person at Te Pae Christchurch
Convention Centre, Christchurch, New Zealand, commencing at 2pm (New Zealand time).

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

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

Please find attached the following documents relating to the meeting:

1. Annual General Meeting Presentation
2. Chair’s Address
3. Chief Executive Officer’s Address
4. Virtual Annual Meeting Online Guide.

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


– ENDS –

The person(s) who authorised this announcement:

Jeff Greenslade
Chief Executive Officer

Greg Tomlinson
Chair of the Board

For further information, please contact:

Nicola Foley
Group Head of Communications
+64 27 345 6809
nicola.foley@heartland.co.nz
Level 3, Heartland House, 35 Teed Street, Newmarket, Auckland, New Zealand

---

Annual
General Meeting
2023
9 November 2023

Agenda
2
01Welcome and formalities
02Chair’s address
03Chief Executive Officer’s address
04Shareholder discussion
05Voting and conduct of poll
06Other business
2

3
Heartland Group Board
Heartland Bank Board
Board of Directors
01
Jeff Greenslade
Non-Independent
Non-Executive Director
Kathryn Mitchell
Non-Independent
Non-Executive Director
Shelley Ruha
Independent
Non-Executive Director
Bruce Irvine (Chair)
Independent
Non-Executive Director
John Harvey
Independent
Non-Executive Director
Simon Tyler
Independent
Non-Executive Director
Jeff Greenslade
CEO &
Executive Director
Kathryn Mitchell
Independent
Non-Executive Director
Ellen Comerford
Independent
Non-Executive Director
Gregory Tomlinson
(Chair)
Non-Executive Director
Geoff Summerhayes
Independent
Non-Executive Director

4
Management team
Michael Drumm
Heartland Bank Chief
Compliance &
Sustainability Officer
Jeff Greenslade
Group CEO
Chris Flood
Deputy Group CEO
Lana West
Group Chief People
& Culture Officer
Doug Snell
StockCo Australia
CEO
Aleisha Langdale
Group Chief
Performance Officer
Andrew Dixson
Group Chief Financial
Officer
Phoebe Gibbons
Group General Counsel
Leanne Lazarus
Heartland Bank CEO
Andy Wood
Heartland Bank
Chief Risk Officer
01

5
•Proxies and postal votes received
•Meeting procedures
•Voting procedures and declaration of poll
•Notice of meeting
•Minutes of last Annual Meeting
Other formalities
01

6
Question boxVoting Card
Voting and asking questions
01

7
•Proxies and postal votes received
•Meeting procedures
•Voting procedures and declaration of poll
•Notice of meeting
•Minutes of last Annual Meeting
Other formalities
01

02
Chair’s address
Greg Tomlinson
Chair of the Board
8

The year in review
02
9
95.9m
underlying net profit after tax $110.2m
FY23
95.1m
underlying net profit after tax $96.1m
FY22
10.1
%
FY23
15.3
%
FY22
NET PROFIT
AFTER TAX
GROSS FINANCE
RECEIVABLES
1
GROWTH
2
RETURN
ON EQUITY
NET INTEREST
MARGIN
Consistently
higher than
banking peers
3
10.4
%
underlying return on equity 11.9%
FY23
12.1
%
underlying return on equity 12.6%
FY22
3.97
%
underlying net interest margin 4.00%
FY23
4.05
%
underlying net interest margin 4.16%
FY22
1 Receivables also includes Reverse Mortgages.
2 Excluding the impact of changes in FX rates.
3 KPMG FIPS Report June 2023.

65% increase in Heartland
Mobile App users.
Signed a share purchase
agreement forthe acquisitionof
Challenger Bank in Australia in
October2022.
2
Awarded CanstarNZ’s
Outstanding Value Home Lender
and Savings Bank of the Year.
Australian Reverse Mortgages
increased market share to
39.9%.
1
The year in review (cont.)
02
10
1
Based on Australian Prudential Regulation Authority (APRA) authoriseddeposit-taking institution (ADI) Property Exposure and Heartland Finance data as at30 June 2023.
2
Conditional only on regulatory approval by APRA and the Reserve Bank of New Zealand (RBNZ).

11
Environment
•Support the just transition to a net-zero economy.
Unaudited operational GHG emissions for FY2023 saw a 17% reduction on the FY2019
base year.
Environment risk screening toolused to understand the sustainability of larger business
and rural borrowers.
Increased lending to new generation vehicles.
Sustainability
02

1
The Heartland Trust is Heartland’s registered charitable trust which is independent from, but closely supported by Heartland.
12
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.
FY23 was Heartland’s second year of reporting pay gap information for gender,
Māori and Pasifika.
Invested in young Māori and Pasifika through the Manawa Ako internship. More
than 110 interns welcomed since 2017.
More than $710,000 granted through the Heartland Trust.
1
$4.3 million in total
grants since 2012.
Sustainability
02

13
Financial wellbeing
•Support the financial wellbeing of Heartland’s customers and communities.
Continued to offer Heartland Extend to consumer customers.
More than 48,000 people in NZ and AU have been supported to live a more
comfortable retirement with a reverse mortgage.
Extended digital access to its Australian Reverse Mortgage customers through the
release of its Heartland Finance Mobile App which had a 10% uptake in the first
month.
Sustainability
02

Heartland has paid more
than $514 million in dividends
to shareholders since
2011 NZX listing.
14
Shareholder return
02
11.5
cents per share
85
%
$
514m
Final dividend of 6.0 cents
per share (cps), bringing
the total dividendfor FY23
to 11.5 cps.
The full year payout
ratio of 85% compares
to the average over the
last three years of 76%.
3.5
4.5
4
5.55.5
6.5
2.5
7
5.5
6
20192020202120222023
Dividends (cps)
Interim dividendFinal dividend

15
Outlook
02
•The Board is confident in
Heartland’s ability to
generate strong growth and
profitability as it continues
to deliver against its
strategy to provide best or
only products through
scalable digital platforms.
•Complete the acquisition of
Challenger Bank.
•Continue commitment to
digitalisationand frictionless
service for customers.
FY2024 NPAT
•Heartland expects NPAT for FY2024 to be
within the guidance range of
$
116m to
$
122m
Excluding any impacts of fair value changes on equity investments
held and the impact of the de-designation of derivatives, and any
costs related to the acquisition and integration of Challenger Bank,
which remains subject to RBNZ and APRA approval.
•As the acquisition nears completion, guidance
will be updated to reflect the impact of
Challenger Bank becoming part of Heartland.

03
Chief Executive
Officer’s Address
Jeff Greenslade
Chief Executive Officer
16

Note: The graph shows FY2023 growth in receivables by portfolio excluding the impact of changes in FX rates and intercompany balances. All figures in NZ$m.
17
03
Business as Usual Growth
6,196
6,821
167
187
(18)
-
(17)
9
264
8
38
(30)
49
(27)
(24)
20
8
Jun-22Reverse
Mortgages NZ
MotorPersonal
Lending
Home LoansBusiness
Relationship
Asset FinanceWholesale
Lending
Open for
Business
Rural
Relationship
Livestock
Finance NZ
Rural DirectReverse
Mortgages AU
Livestock
Finance AU
Jun-23
(8.2%)
13.5%
(3.9%)
7.8%
(27.3%)
11.6%
13.4%
(17.1%)
2.1%
(9.9%)
23.2%
11.2%
20.7%
↗ $374m (15.3%)
Household
↘ $31m (2.2%)
Business
Rural
NZAU
↗ $11m (1.7%)
↗ $625m (10.1%)

Strategic update
03
18
(18)
Frictionless Service at the Lowest Cost
FY23 underlying CTI ratio of 42%
is more comparable to average CTI
ratio of major Australian banks.
1
Ambition to achieve an
underlyingCTI ratio of less
than 35% by 2028.
Key digitalisationinitiatives:
•reducing customer inbound call through self-service
•increased flexibility to self-manage vehicle loan
repayments
•back-end process automation
•Motor digitalisation.
Successfully completed the
upgradeof Heartland Bank’s
core banking system.
1 The average CTI ratio of New Zealand’s main domestic non-major banks excluding Heartland (The Co-operative Bank, Kiwibank, SBS, and TSB) was 69.2% for the 12 months to 30 June 2023 (data from the RBNZ Financial Strength Dashboard, valid as at27 September 2023). The average CTI
ratio of Australia’s major banks (ANZ, CBA, NAB and Westpac) was 45.2% for their most recent respective annual reporting periods.

19
Becoming a bank in Australia
•Significant progress made towards the completion of the acquisition of Challenger Bank, subject
to approval from APRA and the RBNZ.
•Heartland is hopeful of receiving in principle approvals prior to Christmas, or if not, early in 2024, to
be followed by completion as soon as practicable.
Expansion of ‘best or only’ product strategy
•Integration of existing AU businesses into Challenger Bank (subject to completion) would make
Heartland the only AU bank provider of specialist reverse mortgages and livestock finance.
•Opportunity to expand current offerings into Motor Finance and Asset Finance, leveraging
existing NZ expertise and networks.
•AU motor finance market estimated to be $35 billion.
1
Expansion in Australia
1
Based on annuallending which includes consumer and commercial lending segments (see ABS 5601.0 Table 7 LTM to June 2020, and ABS 5671.0 Table 9 LTM to November 2018 (ABS discontinued ABS 5671.0 in November 2018)).
03

20
Outlook
Pipelines in Motor
Finance are strong.
Reverse Mortgage
andAsset Finance
growth has continued.
High interest rates
impacting on borrower
demand and credit
quality.
Greater
competition for
deposits due to
major banks
refinancing the
COVID Funding for
Lending Programme.
03
Commitment to
good customer
outcomes,
proactive portfolio
pricing andmargin
management.

04
Shareholder discussion

05
Voting

06
Other business

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

---

Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
Heartland Annual Meeting 2023:
Chair’s Address

1. Introduction
I acknowledged earlier that this is the first Annual General Meeting since the very sad passing of
Geoff Ricketts in March this year. As a founding Director, Geoff played an instrumental role in
bringing Heartland Group Holdings Limited (Heartland or the Group) together and establishing the
successful trans-Tasman financial services organisation that it is today. Geoff will be remembered as
an esteemed leader who was generous with his time and wisdom. Geoff leaves an incredible legacy.
The Board of Directors (the Board) and I are proud of the way in which Heartland and its customers
demonstrated resilience through the financial year ended 30 June 2023 (FY2023). I am pleased to be
standing here today confirming Heartland’s performance for FY2023, which I believe Geoff would
have been proud of.
2. The year in review
On behalf of the Board, I can report that in FY2023, Heartland achieved a net profit after tax (NPAT)
of $95.9 million, an increase of $0.7 million on the financial year ended 30 June 2022 (FY2022). On
an underlying
1
basis, this result was $110.2 million, an increase of $14.1 million over the prior year.
Heartland’s underlying results exclude the impacts of one-off and technical non-cash items such as
fair value changes on equity investments and the de-designation of derivatives. Underlying results
are intended to allow for easier comparability between periods as these items are not considered
part of business as usual activity and therefore are not representative of Heartland’s core earnings.
This is another strong result for Heartland, driven by growth in gross finance receivables
(Receivables)
2
of 10.1% to $6.8 billion
3
across Heartland’s core lending portfolios.
Underlying return on equity (ROE) was 11.9%, down 68 basis points compared with FY2022.
4
This
reflects a strengthened capital position following Heartland’s equity raise in the first half of the
financial year, positioning the business well for future growth opportunities.

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. Underlying results (which are non-GAAP financial information) exclude any
impacts of one-offs. This is intended to allow for easier comparability between periods, and is used internally
by management for this purpose. A detailed reconciliation between reported and underlying financial
information, including details about FY2023 one-offs, is set out in Heartland’s FY2023 full year results investor
presentation available at heartlandgroup.info. General information about the use of non-GAAP financial
measures is also available in that presentation.
2
Receivables includes Reverse Mortgages.
3
Excludes the impact of changes in foreign currency exchange rates.
4
Underlying ROE refers to ROE calculated using underlying results. When calculated using reported results,
ROE was 10.4%, down 169 bps. See page 4 of Heartland’s FY2023 Investor Presentation available at
www.heartlandgroup.info for more information about the use of ROE, a supplementary, non-GAAP measure.

Heartland Group Holdings Limited | 0800 85 20 20 | PO Box 9919, Newmarket, Auckland 1149 | shareholders.heartland.co.nz
2
Heartland’s net interest margin (NIM) has consistently remained higher than its banking peers.
5
This
trend continued in FY2023 with an underlying NIM of 4.00%. Through proactive portfolio pricing and
margin management, Heartland’s NIM stabilised in the second half of FY2023. Focus will remain on
careful management of asset quality, margin and growth as the high interest rate environment
continues to impact on borrower demand and credit quality.
Heartland continued to solidify its position in the Australian market. StockCo Australia completed its
first full year as part of the Group and performed well in a challenging environment. Meanwhile,
Heartland’s Australian Reverse Mortgages business continued to increase its market share to 39.9%,
up from 34.7% as at 30 June 2022.
6

In October last year, Heartland signed a share purchase agreement for the acquisition of Challenger
Bank Limited (Challenger Bank), conditional only on receipt of the necessary regulatory approvals.
As we continue to actively work through the regulatory approval process, we eagerly anticipate the
growth opportunities that will be possible upon completion. Jeff Greenslade will discuss in more
detail the Australian growth strategy, including the proposed Challenger Bank acquisition.
As demonstrated in Receivables growth, Heartland Bank Limited (Heartland Bank) continued to
perform well. This was supported by the recognition Heartland Bank received for its savings products
and online home loans. Heartland Bank was awarded Canstar New Zealand’s Savings Bank of the
Year Award for the sixth year in a row, while its Online Home Loans received the Outstanding Value
Home Lender award.
Digitalisation of Heartland’s products and platforms continued. Achievements included a 65%
increase in the number of Heartland Mobile App users in New Zealand. As part of its commitment to
digitalisation and the efficiency of its operations, Heartland’s ambition is to reduce its underlying
cost to income ratio to less than 35% by the financial year ending 30 June 2028 (FY2028). Jeff will
address this shortly.
Progress has also been made against Heartland’s sustainability framework. In this regard, I am
pleased to announce that at the beginning of October, Michael Drumm, previously Group Chief
Operating Officer was appointed to the new role of Chief Compliance & Sustainability Officer at
Heartland Bank. Michael has responsibility for creating a dedicated regulatory affairs and compliance
function within Heartland Bank, and progressing the various initiatives within Heartland’s
sustainability framework.
3. Sustainability
Heartland’s three-pillar sustainability framework is focused on sustainable practices which minimise
Heartland’s environmental impact, positively contribute to its communities, and enhance the lives of
its people and customers.
Environment
Under the Environment pillar, Heartland has made a commitment to support the just transition to a
net-zero economy. Heartland’s unaudited operational Greenhouse Gas (GHG) emissions for FY2023
saw a 17% reduction on the base year for the financial year ended 30 June 2019. Heartland intends

5
KPMG FIPS Report June 2023.
6
Based on APRA ADI Property Exposure and Heartland Finance data as at 30 June 2022 and 30 June 2023.

Heartland Group Holdings Limited | 0800 85 20 20 | PO Box 9919, Newmarket, Auckland 1149 | shareholders.heartland.co.nz
3
to set a long-term GHG emission reduction target plan in FY2024, including Scope 3 financed
emissions.
Heartland developed an environmental risk screening tool to understand the sustainability of its
larger business and rural borrowers by reference to environmental, climate, reputational and
regulatory factors. This tool is now being used in the credit decisioning process.
Furthermore, Heartland is phasing out lending on diesel passenger vehicles and more than doubled
the proportion of new generation vehicles funded through its Motor Finance portfolio in FY2023.
People
The People pillar is focused on supporting Heartland’s people to grow, thrive, and be empowered to
achieve Heartland’s goals together. It also describes Heartland’s commitment to caring for
customers and the communities in which it operates.
FY2023 was Heartland’s second year of reporting pay gap information for gender, Māori and
Pasifika. Heartland remains committed to ensuring it monitors recruitment, pay levels and
remuneration to ensure it is fair and unbiased. There is more to be done to close Heartland’s pay
gaps, and we will continue to report on these metrics annually.
Heartland invests in attracting and developing talent, with a particular focus on the younger
demographic. This is important given that 49% of Heartland’s employees are under 35 years old.
Heartland’s Manawa Ako internship programme for Māori and Pasifika youth is a key initiative in this
space. The programme has welcomed more than 110 interns since inception in 2017, with many
having continued in employment with Heartland after the conclusion of the internship.
In line with concerted efforts by its people to focus on diversity, equity and inclusion, Heartland’s
Accessibility employee group was formed to champion accessibility within Heartland, with the goal
of achieving the NZ Accessibility Tick.
As many of our shareholders will be familiar, Heartland has a long history in New Zealand dating
back to 1875. So, we are delighted to be able to support the communities we operate in through the
Heartland Trust. The Heartland Trust is an independent registered charitable trust which is closely
supported by Heartland. Since becoming the Heartland Trust in the financial year ended 30 June
2012, the Heartland Trust has donated more than $4.3 million to New Zealand community groups
and organisations – a figure we are very proud of.
During FY2023 alone, the Heartland Trust made grants totalling more than $710,000 in the areas of
education, arts and culture, and mental health. The Heartland Trust continued its funding and
support of the InZone Education Foundation, Auckland City Mission, WORD Christchurch Festival,
and a number of high school and club 1
st
XV rugby teams across the country. Donations in FY2023
included $45,000 towards disaster relief efforts following the effects of the Auckland flooding and
Cyclone Gabrielle in the Hawke’s Bay.
Financial Wellbeing
Activities under the Financial wellbeing pillar intend to support the financial wellbeing of Heartland’s
customers and communities. This was delivered though Heartland’s products and ongoing
digitalisation efforts.
The current economic environment and cost of living has left more New Zealanders experiencing
financial difficulties. Heartland is committed to supporting its customers during this difficult time and

Heartland Group Holdings Limited | 0800 85 20 20 | PO Box 9919, Newmarket, Auckland 1149 | shareholders.heartland.co.nz
4
continues to offer the Heartland Extend product which enables customers in arrears to make their
existing loan repayments more manageable.
Furthermore, we are pleased to share that more than 48,000 New Zealanders and Australians have
been able to live a more comfortable retirement with a Heartland Reverse Mortgage.
Heartland has extended digital access to its Australian Reverse Mortgage customers through the
release of its Heartland Finance Mobile App, allowing these customers to manage their loan from
their mobile devices. Heartland intends to provide app access to its New Zealand Reverse Mortgage
customers in FY2024.
4. Shareholder return
For our shareholders, we were pleased to be able to pay a final dividend of 6.0 cents per share,
bringing the total dividend for FY2023 to 11.5 cents per share. The full year payout ratio of 85%
compares to the average over the last three years of 76%.
This continues our track record of delivering for shareholders. Since first listing on the NZX in 2011,
Heartland has paid more than $514 million in dividends to its shareholders.
5. Outlook
The year ahead will be significant for Heartland as it seeks to complete the acquisition of Challenger
Bank and continues its commitment to digitalisation and frictionless service for customers.
The Board is confident in Heartland’s ability to generate strong growth and profitability as it
continues to deliver against its strategy to provide ‘best or only’ products through scalable digital
platforms.
Heartland expects NPAT for FY2024 to be within the guidance range of $116 million to $122 million,
excluding any impacts of fair value changes on equity investments held, the impact of the de-
designation of derivatives, and any costs related to the acquisition and integration of Challenger
Bank. As the acquisition nears completion, guidance will be updated to reflect the impact of
Challenger Bank becoming part of Heartland.
6. Conclusion
I wish to conclude my address this afternoon by expressing my thanks and gratitude to my fellow
directors for their wise counsel and support.
Thank you to Jeff Greenslade and the Executive team who continue to provide strong leadership for
Heartland.
On behalf of the Board and Executive team, I wish to thank Heartland’s employees for their hard
work and resilience which enabled an exceptional result this year.
Last but not least, I would like to thank you, our shareholders and customers, for supporting
Heartland. We appreciate the confidence you place in us, and we look forward to continuing the
delivery of strong shareholder returns.
Thank you.
I will now ask Jeff Greenslade to address you.

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Heartland Group Holdings Limited | NZX/ASX: HGH | PO Box 9919, Newmarket, Auckland 1149 | heartlandgroup.info
Heartland Annual Meeting 2023:
Chief Executive Officer’s Address

1. Introduction
E ngā mana, e ngā reo, e ngā rau rangatira, tēnā koutou katoa.
Greetings to all of you, all voices, all authorities and leaders.
E ngā iwi maha o te motu whānui, kei te mihi, kei te mihi.
To the many iwi across the country, I acknowledge you as tangata whenua.
Ki a koutou katoa kua hui mai nei i tēnei rā, tēnā tātou katoa.
To everyone joining us today, thank you.

This calendar year began with sadness for Heartland Group Holdings Limited (Heartland or the
Group) as we mourned the loss of Geoff Ricketts. Geoff was instrumental in bringing Heartland
together – he had enormous vision and drive and was a wonderful mentor.
As the Chair noted, the financial year ended 30 June 2023 (FY2023) was another year of growth,
achieving 10.1%
1
growth in gross finance receivables (Receivables)
2
and with it, both underlying
3
and
reported net profit after tax (NPAT) grew.
This result was achieved in a tightening environment of high inflation and interest rates, and reflects
the strong market positions that the Group has in New Zealand and Australia, particularly in Motor
Finance, Asset Finance and Reverse Mortgages.
These core lending portfolios have shown resilience and have consistently performed well. In the
case of Reverse Mortgages, over the last five years, the compound annual growth rates for the New
Zealand and Australian portfolios have been 16.4% and 22.8% respectively.
4
Each country
experienced growth of more than 20%
5
in FY2023, which is expected to continue through
demographic driven demand as more people seek to remain in their home as they age.

1
Excludes the impact of changes in foreign currency exchange (FX) rates.
2
Receivables includes Reverse Mortgages.
3
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. Underlying results (which are non-GAAP financial information) exclude any
impacts of one-offs. This is intended to allow for easier comparability between periods, and is used internally
by management for this purpose. A detailed reconciliation between reported and underlying financial
information, including details about FY2023 one-offs, is set out in Heartland’s FY2023 full year results investor
presentation available at heartlandgroup.info. General information about the use of non-GAAP financial
measures is also available in that presentation.
4
Compound annual growth rates for the five-year period from 1 July 2018 to 30 June 2023.
5
Excluding the impact of changes in FX rates.

Heartland Group Holdings Limited | 0800 85 20 20 | PO Box 9919, Newmarket, Auckland 1149 | shareholders.heartland.co.nz
2
In Motor Finance, while New Zealand’s vehicle market experienced a 6.2% decrease in total new and
used car sales in FY2023
6
, Heartland Bank Limited’s (Heartland Bank) Motor Finance new business
volumes increased by 11.6% from the financial year ended 30 June 2022 (FY2022). Growth is
expected to continue in the financial year ending 30 June 2024 (FY2024) as dealer and white label
partnerships are strengthened and new partnerships are onboarded.
Asset Finance, which includes financing of trucks, freight transport and yellow goods, experienced
7.8% growth. The Online Home Loans portfolio performed well in FY2023, achieving 14.1% growth
despite a highly competitive market. This product is an example of the success of Heartland’s digital
strategy where, with an online-only finance platform, we can be competitive against the major
banks.
Despite growth across these portfolios, the net interest margin (NIM) contracted due to the mix of
new business favouring better credit profiles. Disproportionally higher growth rates in lower margin
Reverse Mortgages also had an impact on margin.
Alongside these operational achievements, FY2023 was one of significant strategic activity in two
areas in particular:
‒ in increasing efficiency through technology and Heartland Bank’s core systems upgrade; and
‒ the development of our strategy for Australia.
2. Technology: Frictionless Service at the Lowest Cost is at the heart of our
strategy
Heartland’s commitment to digitalisation is aimed at quick, hassle-free service. This in turn is
dependent upon efficiency. We measure efficiency through the cost to income (CTI) ratio which is a
key performance measure for management.
Our ambition is to achieve an underlying CTI ratio of less than 35% by the financial year ending 30
June 2028. This sets us apart.
In FY2023, Heartland’s underlying CTI ratio was 42.0%
7
, which means we spent $0.42 to generate $1
of earnings. That ratio is similar to that of the average CTI ratio of the major Australian banks.
Smaller New Zealand banks of our size have CTI ratios ranging from 60-80%.
8
This means that we
operate under the same operating leverage as banks that are more than 100 times our size. We have
done this through technology; using online or app-based channels to replicate scale, starting through
being an early adopter of digitalisation at the front end and reducing our physical distribution
networks.

6
Based on data from the Motor Industry Association of New Zealand on new and used vehicle sales from
motor vehicle dealers.
7
Underlying CTI ratio refers to the CTI ratio calculated using underlying results. When calculated using
reported results, the CTI ratio was 44.9%, up 126 bps compared with FY2022. See page 4 of Heartland’s FY2023
Investor Presentation available at www.heartlandgroup.info for more information about the use of ROE, a
supplementary, non-GAAP measure.
8
The average CTI ratio of New Zealand’s main domestic non-major banks excluding Heartland (The Co-
operative Bank, Kiwibank, SBS and TSB) was 69.2% for the 12 months to 30 June 2023 (data from the RBNZ
Financial Strength Dashboard, valid as at 27 September 2023). The average CTI ratio of Australia’s major banks
(ANZ, CBA, NAB and Westpac) was 45.2% for their most recent respective annual reporting periods.

Heartland Group Holdings Limited | 0800 85 20 20 | PO Box 9919, Newmarket, Auckland 1149 | shareholders.heartland.co.nz
3
This is an ongoing challenge and requires the application beyond the front end and automating all
parts of the service platform.
Our aim is not to achieve parity with the major banks in terms of CTI ratio, but to create a distance
between us.
Key to achieving a lower underlying CTI ratio will be further increasing customer self-service
functionality, and improving efficiency through streamlining and digitalising our internal ways of
working. Critical to success is providing speedy and intuitive customer access.
Several digitalisation initiatives are underway, including:
‒ reducing customer inbound calls by digitalising the most common reasons for customers to call,
and thereby enabling increased self-service through Heartland’s Mobile App
‒ offering Motor Finance customers increased flexibility to self-manage loan repayments via the
Heartland Mobile App with our One-Click Deferral initiative
‒ increasing efficiency by automating manual back-end processes
‒ the continued rollout of digital capabilities for Motor Finance white label brands and dealer
partners.
The upgrade of Heartland Bank’s core banking system is an important enabler of this activity. This
upgrade is expected to position Heartland for increased scalability in the future and provide a
platform from which to deliver increased levels of automation and digitalisation.
The upgrade of the core banking system continued through FY2023, and I am pleased to confirm the
upgrade has now been successfully completed. This project involved considerable effort over three
years, during which COVID-19 lockdowns and the availability of people dogged resourcing and
stretched capacity.
I wish to note and thank Heartland Bank CEO Leanne Lazarus for her leadership and tireless efforts in
bringing this important project to a successful conclusion.
3. Expansion in Australia
Alongside this, a major focus has been on fulfilling the objective of becoming a bank in Australia - the
acquisition of Challenger Bank Limited (Challenger Bank) being the key stepping-stone.
Chris Flood, Heartland Deputy CEO, has been engaged heavily in preparations for the Challenger
Bank acquisition, paving the way for the transfer of our existing Australian businesses into an
operationally integrated Heartland Bank Australia once regulatory approvals are obtained, and
completion has occurred.
The regulatory process has proven to be complex. What we are doing, a New Zealand bank buying
an Australian bank and integrating existing businesses, is a novel process on both sides of the
Tasman. There have been a range of technical issues to resolve across two jurisdictions.
The applications are with the relevant regulators in New Zealand and Australia.
These applications are made on the basis of Heartland Bank becoming the owner of Challenger Bank,
under which Heartland’s existing Australian businesses will be held.

Heartland Group Holdings Limited | 0800 85 20 20 | PO Box 9919, Newmarket, Auckland 1149 | shareholders.heartland.co.nz
4
We are now subject to regulatory timetables, but we are hopeful of receiving in principle approvals
prior to Christmas or if not, early in 2024, to be followed by completion as soon as practicable.
The opportunity for Heartland in Australia is significant. It will make Heartland the only bank
provider of specialist Reverse Mortgages and Livestock Finance in Australia. There is also the
opportunity to expand current offerings into Motor Finance and Asset Finance. Motor Finance in
particular has the potential for high growth with a differentiated position of being the only specialist
bank in the sector, utilising distribution through existing relationships with manufacturers. We
estimate the size of the Australian motor finance market to be $35 billion.
9

As signalled when the FY2023 results were announced, the guidance range for FY2024 did not
include the impact of Challenger Bank becoming part of Heartland. Guidance will be updated to
address this as we near completion, and we are hopeful of being able to make some announcements
soon.
4. Outlook
We expect FY2024 to be a more challenging year due to high interest rates impacting borrower
demand and credit quality. We are also seeing greater competition for deposits due to major banks
refinancing the COVID-19 funding for lending programme. Initiatives to address this are underway,
including Heartland Bank’s new Digital Saver on-call deposit product, targeting lower cost and less
competitive parts of the yield curve.
The first quarter is typically slower, and this was exacerbated by election uncertainty, which
impacted Motor Finance in particular, but there are signs of a bounce back post-election and
pipelines are strong. Meanwhile, Reverse Mortgages and Asset Finance growth has continued. A
strong commitment to ensuring good customer outcomes, alongside proactive portfolio pricing and
margin management will remain a focus, especially in this challenging environment.
5. Conclusion
Finally, I would like to thank the people of Heartland for their exceptional efforts, in what I’m sure
you will all agree has been another extraordinary year.

He manawa whenua, he manawa tangata, Ko Heartland tēnei.
This is our Heartland.
Thank you also to our shareholders.
Tēnā koutou katoa.
Thank you all.


9
Annual lending includes consumer and commercial lending segments (see ABS 5601.0 Table 7 LTM to June
2020, and ABS 5671.0 Table 9 LTM to November 2018 (ABS discontinued ABS 5671.0 in November 2018)).

---

Virtual Annual
General Meeting
Online Guide
Part of Link Group | Corporate Markets

2 • Link Market Services Virtual Annual General Meeting Online Guide
Step 1
Open your web browser and
go to virtualmeeting.co.nz and
select the relevant meeting.
Virtual Annual General Meeting
Online Guide
Before you begin
Ensure your browser is compatible.
You can easily check your current
browser by going to the website:
whatismybrowser.com
Supported browsers are:
• Chrome – Version 44 & 45
• Firefox – 40.0.2 and after
• Safari – OS X v10.9 “Mavericks”
& OS X v10.10 “Yosemite”
• Internet Explorer 9 and up (please note
Internet Explorer 8 is not supported)
The virtual meeting is viewable from desktops
and laptops. To attend and vote at the virtual
annual general meeting you must have:
• NZX registered holders: Shareholder
number  and authorisation code (FIN)
• ASX registered holders: Shareholder
number and postcode
If you are an appointed proxy you will need
your proxy number which will be provided
by Link Market Services prior to the
meeting. Please make sure you have this
information before proceeding.
Step 2
Login to the portal using your full name, email
address, and company name (if applicable).
Please read and accept the terms and conditions
before clicking on the blue ‘Register and Watch
Annual General Meeting’ button. Once you have
logged in you will see:
• On the left – a live video webcast of the Annual
General Meeting
• On the right – the presentation slides that will be
addressed during the Annual General Meeting.
Note: After you have logged in we recommend that
you keep your browser open for the duration of the
meeting. If you close your browser, your session will
expire. If you attempt to log in again, you will be sent a
recovery link via email for security purposes.

Link Market Services Virtual Annual General Meeting Online Guide • 3
Navigating
At the bottom of the webpage
under the webcast and
presentation there are three
boxes. Refer to each section
below for operating instructions.
1
Get a voting card
2
Ask a Question
3
Downloads
1. Get a voting card
To register to vote - click on the ‘Get a voting
card’ box at the top of the webpage or below
the videos.

This will bring up a box which looks like this.
If you are an individual or joint Shareholder you will
need to register and provide validation by entering your
details in the top section:
• NZX registered holders: Shareholder number and
authorization code (FIN)
• ASX registered holders: Shareholder number and
postcode
If you are an appointed Proxy, please enter the Proxy
Number issued to you by Link Market Services in the
PROXY DETAILS section. Once you have entered your
appropriate details click the blue ‘SUBMIT DETAILS
AND VOTE’ button.
Once you have registered, your voting card will
appear with all of the resolutions to be voted on by
Shareholders at the Annual General Meeting (as set
out in the Notice of Meeting). You may need to use the
scroll bar on the right hand side of the voting card to
scroll up or down to view all resolutions.
Shareholders and proxies can either submit a Full Vote
or a Partial Vote. You can move between the two tabs
by clicking on ‘Full Vote’ or ‘Partial Vote’ at the top of
the voting card.

4 • Link Market Services Virtual Annual General Meeting Online Guide
Full Votes
To submit a full vote on a resolution ensure you are in
the ‘Full Vote’ tab. Place your vote by clicking on the
‘For’, ‘Against’, or ‘Abstain’ voting buttons.
Partial Votes
To submit a partial vote on a resolution ensure you are
in the ‘Partial Vote’ tab. You can enter the number of
votes you would like to vote (for any or all) resolution/s.
The total amount of votes that you are entitled to vote
for will be listed under each resolution. When you enter
the number of votes in a certain box it will automatically
tally how many votes you have left.
Note: If you are submitting a partial vote and do not use all of
your entitled votes, the un-voted portion will be submitted as No
Instruction and therefore will not be counted.
Once you have finished voting on the resolutions scroll
down to the bottom of the box and click the blue ‘Cast
Vote’ or ‘Cast Partial Vote’ button.
Note: You are able to close your voting card during
the meeting without submitting your vote at any time
while voting remains open. Any votes you have already
made will be saved for the next time you open up the
voting card. The voting card will appear on the bottom
left corner of the webpage. The message ‘Not yet
submitted’ will appear at the bottom of the page.
You can edit your voting card at any point while voting
is open by clicking on ‘Edit Card’. This will reopen the
voting card with any previous votes made.
If at any point you have submitted your voting card
and wish to make a change while voting is still open
you can do so by clicking the ‘Edit Card’ button
and making the required change. Once you have
completed your card select the blue ‘Cast Vote’ or
‘Cast Partial Vote’ button.
The voting card remains editable until the voting
is closed at the conclusion of the Annual General
Meeting. Once voting has been closed all voting cards,
submitted and un-submitted, will automatically be
submitted and cannot be changed.
At the conclusion of the Annual General Meeting a red
bar with a countdown timer will appear at the top of
the Webcast and Slide windows advising the remaining
voting time available to shareholders. Please make any
changes required to your voting cards at this point and
submit your voting cards.
If an additional resolution is proposed during the
meeting, there will be a short delay while the resolution
is added to the voting card. Once the resolution has
been added you will be notified by the Chairman during
the meeting. In order to vote on the extra resolution
you will need to reopen your voting card to cast your
vote by clicking the ‘Edit Card’ button.
Note: Registration for the Annual General Meeting and voting opens
one hour before the meeting begins.
Virtual Annual General Meeting
Online Guide continued

Link Market Services Virtual Annual General Meeting Online Guide • 5
2. How to ask a question
Note: Only shareholders are eligible to ask questions.
You will only be able to ask a question after
you have registered to vote. If you would
like to ask a question, click on the ‘Ask a
Question’ box either at the top or bottom
of the webpage.
The ‘Ask a Question’ box will then pop up with two
sections for completion.
In the ‘Regarding’ section click on the drop down
arrow and select one of the following categories:
• General Business
• Resolution 1
• Resolution 2
• Resolution 3
• Resolution 4
• Resolution 5
• Resolution 6
After you have selected your question category, click in
the ‘Question’ section and type your question.
When you are ready to submit your question - click
the blue ‘Submit Question’ button. This will send the
question to the Management/Board.
Note that not all questions are guaranteed to be
answered during the Annual General Meeting, but we
will do our best to address your concerns.
Once you have asked a question a ‘View Questions’
box will appear.
At any point you can click on ‘View Questions’ and
see all the questions you have submitted. Only you can
see the questions you have asked.
Note: You can submit your questions by this method
one hour before the meeting begins, if you have
registered to vote. You can continue to submit
questions up until the close of voting.
If your question has been answered and you would
like to exercise your right of reply, you can do so by
submitting another question.

3. Downloads
If you would like to see the Notice of Annual
General Meeting or the Annual Report you
can do so here.
A
B
• To download the Notice of Meeting – click A
• To download the Annual Report – click B
When you click on these links the file will open in
another tab in your browser.
Voting closing
Voting will close 5 minutes after the close of
the Annual General Meeting.
At the conclusion of the Annual General Meeting a red
bar with a countdown timer will appear at the top of
the Webcast and Slide screens advising the remaining
voting time. If you have not yet submitted your vote at
this point, you will be required to do so now.
At the close of the meeting any votes you have placed
will automatically be submitted.
Virtual Annual General Meeting
Online Guide continued
1261.0 07/16 ISS1
Contact us
Australia
T +61 2 8280 7100
E info@linkmarketservices.com.au
New Zealand
T +64 9 375 5998
E enquiries@linkmarketservices.co.nz
United Arab Emirates
T +27 72 6299034
E paular@linkmarketservices.co.za