17 Sep 2010

'Heartland bank' could be listed by February

2:16 pm on 17 September 2010

Pyne Gould Corporation says a public listing of the so-called "heartland bank" is achievable by early February, now that the boards of three finance lenders have agreed to merge.

Marac, the Canterbury Building Society and the Southern Cross Building Society want to create a $2.3 billion lending operation, with the aim of eventually becoming a bank.

Under the merger, Marac's owner, Pyne Gould Corporation, will hold 71% of the proposed firm, with the building societies equally holding the remainder.

Pyne Gould's chief executive, Jeff Greenslade, says the merger allows it to seek a triple B-minus credit rating, which it needs to be a bank, as well as opportunities to expand its presence in the rural and small business lending market nationwide.

Mr Greenslade says investors will vote in November, with the merger planned to take effect at the start of next year and a public listing expected by early February.

He says the merged entity will comfortably exceed the 9% capital reserve rate for finance firms: it has about $300 million in cash and other liquid assets, he says.