Heartland faces obstacles to achieve bank status
"It is too early to determine the likely success of (the Heartland group) stated intention to seek a banking licence," KPMG says in its latest annual survey of financial institutions.
"The new entity faces many barriers to entry and must first integrate its businesses, establish a track record and then meet credit agency and Reserve Bank of New Zealand requirements, whatever the latter might be at the time of registration," KPMG says.
Heartland was formed early this year from the$2.2 billion merger of Marac, Canterbury Building Society and Southern Cross Building Society, currently named Building Society Holdings.
KPMG says the regulatory hurdles to becoming a bank are increasing with the Reserve Bank pre-empting international moves to tighten funding and lending requirements. This has resulted in funding costs for both registered banks and non-bank lending institutions increasing over the last 15 months, it says.
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