Recently registered New Zealand rural bank Heartland Bank has reported a 71 per cent fall in net profit, delivering in line with its warning in June that bad debts inherited from its earlier incarnations would be written down.Heartland warned in June that it would write off NZ$24.3 million from the value of property assets associated with its former 'bad bank' Real Estate Credit Ltd, which it announced it would reintegrate and clean up as it cut ties with former key shareholder George Kerr.Heartland reported a net profit of $6.9 million for the year to June 30 and an underlying net profit of $24.4 million, which was at the upper end of its guidance in June. It repeated its guidance for an increase in underlying profit in the current 2013/14 financial year, to $34 million to $37 million."The NPAT [net profit after tax] expectation for the next financial year reflects on-going reductions in cost of funds, lower impairments [and a] continued focus on cost reductions, and asset growth in core assets in line with credit growth expectations," it said. Heartland has pulled out of the hyper-competitive residential lending market and is re-focusing on business, rural and personal lending, in rural and provincial areas. It was formed from the remnants of Marac Finance, PGG Wrightson Finance and the CBS Canterbury and Southern Cross building societies.  It was granted a banking licence in December last year.