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Heartland Bank

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Heartland Bank Limited
Company typePublicly listed company
NZX: HGH
IndustryFinancial Services
Founded5 January 2011 (2011-01-05)
Headquarters
Auckland
,
New Zealand
Area served
New Zealand & Australia
Key people
Chris Flood, CEO
ProductsSavings & deposits, reverse mortgages, small business finance, motor vehicle finance, livestock finance
Total assets$4.0 billion
Number of employees
more than 350 (2018)
Websitewww.heartland.co.nz

Heartland Bank is a New Zealand owned bank that was created in 2011 through the merging of four financial organisations to gain. Heartland was granted its bank registration by the Reserve Bank of New Zealand in 2012. [1][2][3][4] It specialises in motor vehicle loans, reverse mortgages, small business finance, livestock finance, savings, investments and deposits.

Heartland became a registered bank on in 2012 but its predecessors have had a long history in New Zealand with roots stretching back to 1875.

History

Predecessors

In 1875, the Ashburton Permanent Building & Investment Society was established, which subsequently merged with SMC Building Society and Loan & Building Society.[5] Together they became CBS Canterbury.

Separately Southern Cross Building Society opened in Auckland in 1923, it offered a similar range of financial services to its customers throughout the North Island.

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.

Leading stock and station businesses, Williams & Kettle, Wrightson, Pyne Gould Guinness, and Reid Farmers which became PGG Wrightson established PGG Wrightson Finance (PWF) in the 1940s. PWF provided financial services to its farming and rural clients.

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 and 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.[6] The rationale for the merger was to create financial institution that had national coverage and enough assets and resources to get a full banking licence.

On 12 December 2012, the Reserve Bank of New Zealand 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[7] placed Heartland Bank, together with seven other small New Zealand financial institutions on a credit rating 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. [8] 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".[9] 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".[10]

Acquisitions and Partnerships

In February 2014, Heartland moved into the Reverse Mortgage (or Home Equity Release) market through the purchase of Sentinel in New Zealand and Australian Seniors Finance in Australia.[11]

In September 2014, Heartland purchased a 10% shareholding in peer-to-peer lender Harmoney Limited.[12]

In January 2017, Heartland partnered with Spotcap Australia, and online lender to small and medium-sized businesses.[13]

Open for Business - Unsecured Small Business Loans

In April 2016, Heartland launched an online platform, Open for Business, offering unsecured loans for small businesses.[14] An application through Open for Business can be completed in two to three minutes and the applicant receives an immediate decision.[14][15]

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.[16]

In June 2018, Heartland launched a mobile app for its deposit customers to give them better control over their investments.[17][18]

In July 2018, Heartland was named Canstar Bank of the Year – Savings.[19] Canstar researched, analysed and compared 31 accounts from 11 providers for the annual ratings.[19]

References

  1. ^ "Reserve Bank confirms banking registration for building society Heartland NZ". interest.co.nz. 17 December 2012.
  2. ^ "Court approves 'heartland bank' merger". stuff.co.nz. 16 December 2010.
  3. ^ "Heartland yet to consider finance arm". 24 September 2012.
  4. ^ "Heartland NZ sees funding cost premium halve". interest.co.nz. 29 August 2012.
  5. ^ "Canterbury Building Society to merge with Loan and Building". The New Zealand Herald. 11 October 2007.
  6. ^ "Heartland bank gets final thumbs up from depositors". scoop. 10 December 2010.
  7. ^ "Small banks put on notice". Otago Daily Times. 17 May 2013.
  8. ^ "Heartland's stronger asset quality, earnings earn Fitch upgrade". NZ Herald. 29 October 2014.
  9. ^ "Fitch Affirms Credit Rating for Heartland Bank" (PDF) (Press release). Heartland Bank. 16 October 2015. Archived from the original (PDF) on 23 January 2016. Retrieved 31 December 2015.
  10. ^ "Fitch Press Release" (PDF).
  11. ^ Meadows, Richard. "Heartland buys reverse mortgage firm". Fairfax Media.
  12. ^ Adams, Christopher (9 September 2014). "Heartland buys into HarMoney". NZ Herald.
  13. ^ "Online lender Spotcap partners with Heartland Bank". Stuff. Retrieved 6 October 2018.
  14. ^ a b "Heartland Bank boasts the fastest loan in New Zealand". Stuff. Retrieved 6 October 2018.
  15. ^ tamsyn.parker@nzherald.co.nz, Tamsyn Parker Money Editor, NZ Herald (16 May 2017). "Heartland's big focus on small loans". NZ Herald. ISSN 1170-0777. Retrieved 6 October 2018. {{cite news}}: |first= has generic name (help)CS1 maint: multiple names: authors list (link)
  16. ^ "Five-star savings and transaction accounts 2018 - Canstar". Canstar. 29 May 2018. Retrieved 6 October 2018.
  17. ^ "Heartland Mobile App". App Store. Retrieved 6 October 2018.
  18. ^ "Heartland releases Mobile App for deposit customers | Scoop News". www.scoop.co.nz. Retrieved 6 October 2018.
  19. ^ a b "Canstar Bank of the Year – Savings 2018: Heartland". Canstar. 2 July 2018. Retrieved 6 October 2018.
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