Challenges for Heartland bank down track

Certainly, the independent report by Northington Partners and Cameron Partners says the merits of the merger "appear compelling."

Longer-term, a key issue for the merged group, currently called Building Society Holdings (BSH) and colloquially referred to as the proposed "heartland bank," will be ongoing funding.

All three have traditionally been heavily dependent on retail funding and investor confidence has been severely dented following the collapse of about 50 non bank deposit takers (NBDTs).

Since the three are covered by the extended government guarantee scheme through to December 31, 2011, it isn't an immediate issue.