Heartland Bank is a New Zealand owned

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

that was created in 2011 through the merging of four financial organisations. Heartland was granted its bank registration by the Reserve Bank of New Zealand in 2012. It specialises in motor vehicle loans, reverse mortgages, small business finance, livestock finance, savings, investments and deposits.

History

Predecessors

In 1875, the 'Ashburton Permanent Building & Investment Society' was established, which subsequently merged with 'SMC Building Society and Loan & Building Society', becoming 'CBS Canterbury'. Separately, the 'Southern Cross Building Society' opened in Auckland in 1923, offering a similar range of financial services to its customers throughout the North Island. Four leading stock and station businesses; Williams & Kettle, Wrightson, Pyne Gould Guinness, and Reid Farmers merged to become PGG Wrightson Finance (PWF) in the 1940s. PWF provided financial services to its farming and rural clients. In 1952, 'MARAC Finance' was established lending money to business to purchase commercial vehicles as the 'North Shore Rental Van Company'. Over the next 55 years it grew to provide financing, lending and insurance services to businesses and individuals. In late 2010 a plan was hatched to bring together these four separate financial institutions to create a financial company with national coverage across New Zealand that had enough assets to become a bank. On 5 January 2011, CBS Canterbury, Southern Cross Building Society and MARAC Finance Limited combined to become one organisation. On 31 August 2011, the Group acquired PGG Wrightson Finance.

Becoming a bank

Heartland was created from the merger of CBS Canterbury (Canterbury Building Society), Southern Cross, MARAC and PGG Wrightson Finance. The rationale for the merger was to create a financial institution that had both widespread national coverage and enough assets and resources to get a full banking licence. On 12 December 2012, the

Reserve Bank of New Zealand The Reserve Bank of New Zealand (RBNZ, mi, Te Pūtea Matua) is the central bank of New Zealand. It was established in 1934 and is constituted under the Reserve Bank of New Zealand Act 1989. The governor of the Reserve Bank is responsible for N ...

announced that Heartland Building Society has been registered as a bank and the organisation changed its name to Heartland Bank.

Credit Rating

In May 2013 ratings agency, Standard & Poor's placed Heartland Bank, together with seven other small New Zealand financial institutions on a

credit rating A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government), predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting. ...

downgrade watch, citing potential risks from overexposure to New Zealand's highly inflated housing market. In October 2014, Heartland's rating was raised to BBB (outlook stable) in October 2014. In October 2015, Fitch, another credit ratings agency confirmed Heartland with a rating of BBB (Outlook stable), noting "core asset quality to remain sound, benefiting from continued improvement in underwriting standards and good economic conditions". In September 2018, Fitch affirmed Heartland's credit rating of BBB (outlook Stable) noting Heartland "has achieved a leading niche franchise and some price-setting power, which resulted in a strong net interest margin".

Acquisitions and Partnerships

In February 2014, Heartland moved into the

Reverse Mortgage A reverse mortgage is a mortgage loan, usually secured by a residential property, that enables the borrower to access the unencumbered value of the property. The loans are typically promoted to older homeowners and typically do not require monthl ...

(or Home Equity Release) market through the purchase of Sentinel in New Zealand and Australian Seniors Finance in Australia. In September 2014, Heartland purchased a 10% shareholding in peer-to-peer lender Harmoney Limited. In January 2017, Heartland partnered with Spotcap Australia, and online lender to small and medium-sized businesses.

Open for Business – Unsecured Small Business Loans

In April 2016, Heartland launched an online platform, Open for Business, offering unsecured loans for small businesses. An application through Open for Business can be completed in two to three minutes and the applicant receives an immediate decision.

Savings & Investments

In May 2018, Heartland's Direct Call Account received a 5-star rating from CANSTAR in its Flexible Saver and Regular Saver categories. In June 2018, Heartland launched a mobile app for its deposit customers to give them better control over their investments. In July 2018, Heartland was named Canstar Bank of the Year – Savings. Canstar researched, analysed and compared 31 accounts from 11 providers for the annual ratings.

References

External links

* {{NZ Banks , state=expanded Building societies of New Zealand Banks established in 2011 Banks of New Zealand Ashburton, New Zealand