1 Jun 2010

New 'Heartland' bank proposed

6:56 pm on 1 June 2010

Some of the oldest money lenders in the country are considering merging to form a bank.

Canterbury Building Society, Southern Cross Building Society and Pyne Gould Corporation are looking to merge their banking-related activities.

The proposal, which is still in its early stages, would create a combined entity with 360 employees, about 70 branches nationwide and an initial asset base of $2.2 billion.

That would make it the ninth largest bank in the country, after SBS in Southland.

It would be based in the South Island and listed on the stock exchange, becoming the only New Zealand-owned listed bank.

Pending approval from shareholders, depositors, debenture holders and regulators, the three companies envisage applying for a banking licence in the middle of 2011.

Merger welcomed

The Manufacturers & Exporters Association says more banks will inevitably lead to keener competition.

Chief executive John Walley says any focus on business lending would be welcome right now, because companies are finding it difficult to get funding from the major banks.

And the Canterbury Employers' Chamber says it believes the bank would be very well received by Canterbury businesses.

The chamber says the bank will want to be seen as a local bank serving the needs of local businesses.