Heartland becomes a bank

Heartland Building Society has achieved its goal and become a registered bank.

Monday, December 17th 2012, 12:20PM

by Niko Kloeten

Heartland, the wholly owned subsidiary of Heartland New Zealand (HNZ), has now achieved its goal of becoming the only New Zealand operated, controlled and managed banking group, with a parent company listed on the NZX Main Board.

The company has intended to be a bank ever since it was formed in a merger between Marac, CBS Canterbury and Southern Cross Building Society. It has also recently bought PGG Wrightson Finance.

Heartland Chairman Bruce Irvine said Heartland looked forward to “delivering on the promise of being a successful NZ listed Bank that will support the productive sectors of the New Zealand economy over the long term.”

Chief executive Jeff Greenslade said Heartland will continue to be New Zealand focussed and is part of a “new breed of banks offering a fresh approach”.

He said Heartland has a “balanced engagement” across the business, rural and household sectors, with an emphasis on supporting and funding the productive sector.

“We recognise that at the same time Heartland, as a bank, needs to retain the advantages of being small: local and accessible, at all times seeking to be innovative”.

Heartland recorded a net profit after tax of $24.2m for the year ended June 30, up $16.5m from $7.7m for the previous year.

It has been shifting its focus away from its shrinking non-core property portfolio and towards higher-value motor vehicle loans.

An analyst has predicted Heartland’s cost of funding will drop by as much as 50 basis points as a result of bank registration.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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