• Average net interest margin (NIM) expanded further, with some compression expected in the fourth quarter
• Heartland's cost-to-income (CTI) ratio saw an overall reduction
• Heartland Bank's asset quality continued to improve, with higher impairment expense from non-strategic asset (NSA) provisioning and write-offs in Motor Finance

Heartland Group Holdings Limited (Heartland) (NZX/ASX: HGH) today provides a trading update for the three-month period ended 31 March 2026 (3Q2026). Heartland remains on track to deliver an underlying return on equity (ROE) of at least 7% and underlying net profit after tax (NPAT) of at least $85 million for the financial year ending 30 June 2026 (FY2026). The company's average net interest margin (NIM) expanded further, with some compression expected in the fourth quarter of FY2026 (4Q2026). Heartland's cost-to-income (CTI) ratio saw an overall reduction, driven by improvement in Heartland Bank Australia Limited's (Heartland Bank Australia) CTI ratio. Heartland Bank Limited's (Heartland Bank) asset quality continued to improve, with higher impairment expense from non-strategic asset (NSA) provisioning and write-offs in Motor Finance as Heartland Bank continues to clear Motor Finance non-performing loans (NPLs) between 180 and 364 days past due (on track to clear by 30 June 2026). Strong performance continued in Reverse Mortgages for both Heartland Bank and Heartland Bank Australia, and in Heartland Bank's Rural portfolio. Heartland Bank saw a return to growth in Motor Finance and Asset Finance in 3Q2026. Notwithstanding this positive 3Q2026 result, given the ongoing uncertainty in the Gulf region, Heartland remains cautious and is closely monitoring potential impacts on customer demand and credit quality in New Zealand and Australia.

Heartland remains on track to deliver an underlying return on equity (ROE) of at least 7% and underlying net profit after tax (NPAT) of at least $85 million for the financial year ending 30 June 2026.