Newstalk ZB
The owner of TSB has agreed to sell the bank to Heartland Group Holdings for $620 million to create a “larger New Zealand challenger bank” with a regional focus. Toi Foundation will sell all its shares on issue to Heartland to create ‘TSB Heartland Bank Limited’. Heartland chief executive Andrew Dixson said scale would enhance the bank’s ability to compete and increase its financial resilience. “By combining Heartland Bank’s specialist product expertise with TSB’s cost-effective funding and everyday banking services, we’ll be able to offer more New Zealanders a better‑value banking alternative,” he said. “As a larger bank, TSB Heartland Bank will be in a stronger position to keep investing in products and technology, while supporting the delivery of improved financial returns for our shareholders.” TSB and Heartland are New Zealand’s seventh and nineth largest banks respectively, by assets. Once merged, they will be the seventh largest bank, behind the big four Australian-owned banks, Kiwibank and Rabobank. TSB’s assets are worth $9.5 billion. Heartland’s are worth $5.6b. To put these numbers in context, Kiwibank’s assets are worth $43.1b. TSB, or the Taranaki Savings Bank, has been owed by Toi Foundation - a perpetual philanthropic community trust, which also owns 66% of Fisher Funds - since 1988. Heartland is listed on the NZX and ASX and provides specialist banking products to New Zealanders and Australians. Dixson explained the merger would enable Heartland to deploy capital more effectively across the its group, and “have the scale needed to deliver a stronger cost-to-income ratio through greater operating leverage”. “Our commitment to specialist products remains unchanged – this will simply be enhanced by full-service capabilities in New Zealand.” The proposed deal is expected to be completed in December, provided it receives the appropriate regulatory approvals. Taranaki residents will also be consulted. More to come ...
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