Heartland expects banking licence decision in November
The goal is to win a banking licence as lenders enter a new regime that imposes stricter controls on finance companies.
BUSINESSDESK: Heartland New Zealand, the lender formed from the merger of Pyne Gould's Marac Finance with the Canterbury and Southern Cross building societies, expects to get the decision on whether it can have a banking licence in November.
The Reserve Bank is making its formal determination on whether to issue a banking licence after the Christchurch-based lender made a written application and provided certain independent reports, Heartland says.
The timeframe for the determination process is uncertain, though the central bank has advised the process can take several months.
"The fact that engagement with the RBNZ continues and the formal determination process is under way does not indicate that HBS (Heartland Building Society) satisfies any of the criteria for registered bank status, or that the outcome of the process will be positive," the lender says.
"Heartland expects that a decision will be available by a date in November of this year."
The goal of the merger is for the new entity to win a banking licence as lenders enter a new regime that imposes stricter controls on finance companies, though Heartland has been at pains to avoid commenting on its application.
The tougher rules came during the collapse of the finance sector through the latter half of the last decade, which destroyed several billion dollars of investor wealth.
Heartland stresses the timing of the process is uncertain and the outcome unknown.
The shares rose 1.5% to 55 cents in trading yesterday, and have gained 10% this year.
The stock is rated an average "outperform" based on two analysts' recommendations compiled by Reuters, with a median target price of 60 cents.
Paul McBeth
Fri, 10 Aug 2012
Fri, 10 Aug 2012
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Heartland expects banking licence decision in November
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