Southland-based mutually-owned SBS Bank is planning to merge with Hawke's Bay-based HBS Building Society.
Pyne Gould Corporation, the Canterbury Building Society, and the Southern Cross Building Society are also holding talks to form a bank and list on the stock exchange.
SBS Bank chief executive Ross Smith says the merger extends its presence in the North Island, as SBS aims to become a national bank.
SBS has assets of $2.63 billion with 15 branches, and HBS has assets of $185 million and has two branches.
If approved in September by HBS, merging the two organisations will begin in October.