Heartland Bank licence may take up to two years

MARAC Finance, Southern Cross Building Society and CBS Canterbury announced  a merger plan in September with the aim of creating an NZX-listed banking and financial services group, and applying for a banking licence for one of the units Combined Building Society. The proposed bank has been dubbed "Heartland Bank."

"Based on our discussions with the RBNZ and the observed timeframes required for recent applications for bank registration, we suggest that the process for Combined Building Society could realistically require anything between one to two years from the merger date," the report said.

The report noted that the Combined Building Society is capable of meeting the RBNZ's registration criteria but such a registration will only be possible if the merger is implemented successfully and key short-term targets for the new business are fully met.

In their information document, the merging entities cited the government guarantee as one of the key requisites for the merger. "The merger will not proceed unless the merged group's major operating subsidiary, Combined Building Society, has been granted a Crown Guarantee," they said.