Funding and liquidity key issues for Heartland
Without Wrightson Finance, Heartland has nearly $350 million of deposits maturing within a month; adding Wrightson Finance increases that to almost $450 million, according to a presentation Heartland filed with NZX last week.
The prospectus dated April 29 relating to the distribution of Pyne Gould Corporation's holding in Heartland to its shareholders shows a shortfall between its available cash and loan maturities well exceeded by its maturing liabilities through to more than 12 months.
For example, on-demand deposits and other borrowings of $214.8 million were nearly twice available cash. Deposits and other borrowings maturing within six months of $884.5 million were $180 million more than cash and loan maturities. Its deposits and other borrowings maturing in between six and 12 months of $591 million are covered by just $320.3 million in maturing loans and other financial assets.
This situation largely reflects Heartland's origins in the merger earlier this year between Marac Finance, CBS Canterbury and Southern Cross Building Society. Traditionally, building societies rely heavily on their short-term deposits.
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