Heartland gets approval for bank licence

Monday 17th December 2012

The Reserve Bank has approved Heartland New Zealand's application to be a licensed bank, ending a long wait for the lender.

The central bank said Heartland has become New Zealand's 22nd registered bank in a brief statement.

Securing a banking licence has been a key plank of Heartland's strategy in a shift away from a new regulatory regime that imposed stricter conditions on non-bank financial institutions.

"Heartland, as a bank, needs to retain the advantages of being small: local and accessible, at all times seeking to be innovative," chief executive Jeff Greenslade said in a statement.

Last month Heartland had its investment grade BBB- credit rating affirmed with a stable outlook by Standard & Poor's, which cited the lender's strength as very strong capital and earnings assessment, good geographic and business diversity, and sticking to its timeline for its post-merger plan.

Heartland had been hoping to update shareholders on its strategy as a fully-fledged bank at the annual meeting on Nov. 30, and give them "greater comfort that the outcome on bank registration can be meaningfully addressed at the meeting."

Its expectation of a November decision was based on the customary pace for New Zealand incorporated applicants.

The shares fell 1.5 percent to 67 cents on Friday, and have rallied 37 percent this year.

BusinessDesk.co.nz

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