Motor finance has returned to growth at Heartland Group Holdings, with a sharp lift in electric vehicle lending helping drive a rebound in the third quarter.
In a trading update for the three months to March 31, NZX-listed Heartland says motor finance receivables rose $40.6 million, or 9.9%, to $1.69 billion.
The growth was supported by a strategic shift toward higher-quality lending and a strong surge in EV finance.
Heartland says EV lending volumes in March were three times higher than the monthly average year-to-date.
The recovery comes as the bank continues to work through legacy issues in its motor finance book, with non-performing loans between 180 and 364 days past due on track to be cleared by June 30.
Asset quality improved overall during the quarter, with the group’s non-performing loan ratio falling to 2.81%.
Heartland says arrears in motor finance continue to trend down as it clears older problem loans.
The bank also reported a return to growth in asset finance, while overall business finance remained flat for the quarter.
Despite the improvement, Heartland notes ongoing pressure in parts of the asset finance sector, with rising fuel costs impacting some borrowers.
Across the wider business, the group says it remains on track to deliver an underlying return on equity of at least 7% and net profit after tax of at least $85 million for the 2026 financial year.
However, it flagged continued uncertainty linked to geopolitical tensions and potential impacts on customer demand and credit quality in both New Zealand and Australia.
