Heartland New Zealand has confirmed previous guidance that annual net profit in the current year will rise at least 39%.
The company, which gained its banking licence in December, says profit for the year ending June 2014 will be between $34 million and $37 million.
Managing director Jeff Greenslade says three factors will contribute to the strong profit increase.
"The key drivers will be cost of funds continuing to come down, because that effectively washes through, so the reductions we put in place a while ago are still yet to come through," he says.
"The second thing that we'll see coming through is improving the product mix in terms of our loans, so more of those higher-value, lower-contestibility products coming through in the balance sheet that impacts positively on margin."
"Finally ... we will see our impairments normalise because of what we've done with our property books."
Heartland reported a 71% drop in annual net profit to nearly $7 million, in line with its guidance and reflecting its decision to book an upfront cost in order to put the legacy of its unwanted and troubled property portfolio behind it.
