Lender holds 40% share of Australian reverse mortgage sector while posting stronger first‑half profit
Heartland Bank Australia has reinforced its lead in the reverse mortgage segment, retaining about 40% of the market while growing its book by 18.9% in the six months to December 2025.
Reverse mortgage receivables at Heartland Bank Australia increased by $188.2 million from $1.98 billion in June 2025 to $2.17 billion at the end of December, supported by new aggregator partnerships and continued demand from older borrowers seeking to unlock housing wealth.
Parent company Heartland Group Holdings, led by chief executive Andrew Dixson (pictured top), reported net profit after tax of $48.8 million for the first half of the 2026 financial year, with underlying profit – excluding one‑off items – at $46.1 million. The group is still aiming for underlying profit of at least $85 million and a return on equity of no less than 7% for the year to June 30, 2026.
Group‑wide, net interest margin increased to 3.92%, up 51 basis points on the prior corresponding period, and underlying return on equity rose to 7.3%. The underlying cost‑to‑income ratio improved to 54.6%, even as operating costs rose 4% due to technology spending and Australian expansion.
Asset quality also strengthened. The bank’s impairment expense ratio fell to 0.50%, assisted by provision releases in motor and non‑strategic asset portfolios, and its non‑performing loan ratio declined to 3.04%. In Australia, the impairment expense ratio remained at 0.10%, with reverse mortgage and livestock books both reported as well provisioned.
Heartland is also investing in new core platforms to improve scalability in its niche portfolios. For Australia, Heartland Bank is partnering with Constantinople to consolidate three origination and servicing systems into a single subscription‑based core, with full migration expected by the end of FY2028.
The group will brief investors on its longer‑term strategy, including its reverse mortgage ambitions in both the Australia and New Zealand markets, at an investor day scheduled for June 5, 2026.
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