Heartland granted banking licence
Heartland, the successor to Marac Finance, has been granted banking registration by the Reserve Bank.
Heartland, formed in January 2011 from the merging of Marac Finance with two building societies, CBS Canterbury and Southern Cross Building Society, is the 22nd bank in New Zealand. It had $2.35 billion of assets at June 30 this year and booked a profit after tax of $23.6 million.
The gaining of a banking licence is a milestone in a strategy launched three years ago to save Marac Finance, which like other New Zealand finance companies found itself in mid 2009 with a weight of bad loans, in Marac's case $180m and most of those property loans.
The parent company Pyne Gould Corporation (PGC) launched a $272m capital raising in late 2009, a good chunk of which was injected in Marac Finance and the following year, PGC, CBS and Southern Cross started talking about a merger.
In mid 2011 PGC distributed its 72 per cent stake in Heartland to its shareholders but a couple of months later bought shares again in Heartland in a capital raising the helped Heartland purchase the finance arm of PGG Wrightson in late August 2011.
PGC sold out of Heartland this year separating the two companies though a portion of the two companies shareholders remain the same. The strategy has resulted in the break-up of the old PGC group.
Heartland said this morning it was pleased to announce that wholly-owned subsidiary Heartland Building Society's application for bank registration had been successful. Heartland said it had 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.
Chairman Bruce Irvine said "it has been my pleasure to be part of this Heartland journey, and we can be extremely proud of all that has been accomplished.
" I would like to thank our loyal HNZ Shareholders and Heartland depositors. We look forward to delivering on the promise of being a successful New Zealand listed bank that will support the productive sectors of the New Zealand economy over the long term."
At is annual meeting last month Heartland announced its first 1.5 cents dividend to its patient shareholders.
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 in two ways. A balanced engagement across the three sectors that drive prosperity in New Zealand communities – business, rural and households. Secondly, an emphasis on supporting and funding the productive sector - meeting the sustainable needs of hard-working New Zealanders and New Zealand.
"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".