EV lending surge drives motor finance rebound at Heartland

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, the NZX-listed lender says motor finance receivables rose $40.6 million, or 9.9%, to $1.69 billion.

The growth reflects a shift toward higher-quality lending, alongside a strong increase 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 during the quarter, with the group’s non-performing loan ratio falling to 2.81%, while arrears in motor finance continued to trend down as older problem loans are cleared.

The bank also reported a return to growth in asset finance, while overall business finance remained flat over the period.

Despite the improvement, Heartland says some pressure remains in parts of the asset finance sector, with rising fuel costs affecting certain 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 ongoing uncertainty linked to geopolitical tensions and potential impacts on customer demand and credit quality in both New Zealand and Australia.