22 Aug 2011

Heartland not ruffled by Nomura move

7:09 am on 22 August 2011

The new $2.1 billion financial services company, Heartland, isn't worried by a Japanese investment bank's substantial acquisition of New Zealand loans.

Heartland New Zealand was established earlier this year through the merger of CBS Canterbury, Southern Cross Building Society and Marac Finance, and it's close to finishing the $100 million purchase of PGG Wrightson Finance (PWF).

It posted a maiden profit of $7.1 million in the year to the end of June, in line with previous forecasts of $6 - $8 million.

Heartland's managing director Jeff Greenslade says he is not worried by news the Japanese investment bank Nomura has bought the last of South Canterbury Finance's quality good-bank business - its consumer, business and rural loans. He says Nomura occupies a completely different sector of the market.

Heartland is forecasting an increased profit, of $20 - $24 million, in the current financial year as it puts merger costs behind it and targets the rural sector.

Mr Greenslade says the PWF acquisition will increase the company's earnings base.

He says Heartland still intends to make a formal application to the Reserve Bank for a banking license, but it first needs to complete the proposed $100 million acquisition of PGG Wrightson Finance.