Heartland's banking aspirations knocked
"The outlook revision reflects the slower-than-anticipated stabilisation and improvement in HBS's key asset quality indicators and earnings profile," S&P says.
"Headwinds in the commercial property market and the general operating environment have contributed to our view that it will now take longer for HBS to restore its asset quality and earnings profiles to levels supportive of the rating and comparable to other, similarly rated, peers," it says.
The downgrade is a blow to Heartland's aspirations to become a bank, although while it retains the "BBB-" rating, the lowest investment grade rating, it can still progress its application.
The company says the areas of S&P's concerns are where management is currently focused.
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