Heartland Bank is all but bowing out of mortgage lending in its own right after forming an exclusive alliance with government-owned Kiwibank.
Heartland chief executive Jeff Greenslade says his bank will still provide mortgages as part of its suite of products offered to small business customers.
"But for the mainstream, housing-related, stand-alone residential mortage products we're now going to be offering a Kiwibank product."
Mr Greenslade says the arrangement with Kiwibank allows Heartland to derive income without the risk.
He says that recent concerns expressed by the international ratings agency, Standard & Poor's, have served to reinforce the soundness of Heartland's strategy.
