'Heartland' bank launched from Sth Island merger

A new 'Heartland' style bank is being formed in the South Island. The listed bank will have assets of $2.2 billion. Photo / Wikimedia Commons

Marac's parent Pyne Gould Corporation, Southern Cross Building Society and the Canterbury Building Society say they want to merge their banking related activities to create a sharemarket listed bank with assets of NZ$2.2 billion.

The three said the merged entity would have the critical mass to secure an investment grade credit rating and obtain a banking licence from the Reserve Bank, the scale to capitalise on growth opportunities and drive shareholder value.

Headquartered in the South Island, the group would start with assets of NZ$2.2 billion, 360 staff and about 70 national customer outlets, providing a platform for growth.

"While transaction details are yet to be finalised and are subject to further agreement, it is envisaged that the merger would be facilitated by amalgamating CBS and SCBS and then by the acquisition of applicable PGC businesses, primarily its wholly owned subsidiary MARAC," the three said.

"The resulting merged entity would be headquartered in the South Island, have a national operational network with a mandate to significantly grow the size of the business and have the capability of driving greater shareholder returns than would be available separately. The aim is to more than double the NZ$2.2 billion asset base in five years."

The three said the project was in the early stages of development with due diligence yet to be completed before a formal proposal could be put to the three's respective owners. This was expected in the latter part of the year.

"The branding strategy for the merged entity is currently under development and will incorporate the "Heartland" vision of the three parties- a New Zealand owned bank specialising in and understanding the core needs of Individual New Zealanders and their families, Small Businesses and Agriculture," they said.

Although the respective ownership proportions and board structure of the merged business are yet to be agreed, PGC was likely to be the biggest shareholder.


Interest.co.nz