PFG merger plans disrupted

CBS has announced that it is in merger discussions with Canterbury's Loan & Building Society, (LBS) also listed on the NZAX.

LBS approached CBS after Propertyfinance Group announced its desire last month to collaborate with CBS. Propertyfinance surprised the stockmarket and the lending industry by taking a stand in the stock market to buy up to 19.9% of CBS's shares. Propertyfinance has built a stake of just over 11% since then.

PFG said when it announced its move on CBS that consolidation in the industry was inevitable because of Government plans to regulate non bank lenders. CBS said that LBS had approached it because of its concerns about the implications of a deal between CBS and Propertyfinance.

A merger between CBS and LBS would create an organisation with assets of about $520 million.