Heartland Bank was fairly priced when adjusted for its lower return on equity and credit quality than its peers, Craigs Investment Partners broker Greg Easton said yesterday. Shares last traded at 87c with a 12-month target price of 85c.
The company's strategy of selling non-core assets was progressing well.
Around 10% of the portfolio, or $107 million, was sold in the first two months. Heartland expected to sell more than $40 million in the next 10 months with the support of an improving property market, reducing the portfolio to about $60 million, he said.
The products identified for growth were: motor vehicle finance; livestock finance; invoice finance; working capital finance; rural seasonal capital; and business call.
Apart from vehicle finance, where Heartland was the third largest independent player, the other products had no dominant players and Heartland was coming from a low base.
''Heartland thinks it has the competitive edge,'' Mr Easton said.
