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Reserve Bank gives thumbs up to Heartland licence

The Reserve Bank has approved Heartland New Zealand's application to be a licensed bank, ending a long wait for the lender.

The central bank says Heartland has become New Zealand's 22nd registered bank.

Securing a banking licence has been a key plank of Heartland's strategy in a shift away from a new regulatory regime that imposed stricter conditions on non-bank financial institutions.

"Heartland, as a bank, needs to retain the advantages of being small: local and accessible, at all times seeking to be innovative," Heartland chief executive Jeff Greenslade says in a statement.

Shares in Heartland rose 3c following this morning's announcement and are trading at 70c on the NZX.

Last month Heartland had its investment grade BBB- credit rating affirmed with a stable outlook by Standard & Poor's, which cited the lender's strength as very strong capital and earnings assessment, good geographic and business diversity, and sticking to its timeline for its post-merger plan.

Heartland had been hoping to update shareholders on its strategy as a fully-fledged bank at the annual meeting on November 30, and give them "greater comfort that the outcome on bank registration can be meaningfully addressed at the meeting."

Its expectation of a November decision was based on the customary pace for New Zealand incorporated applicants.

(BusinessDesk)

Comments and questions

Let me be the first them to say well done to the team at Heartland.

Funny that the comments are so few when it's positive news......... I guess some just enjoy being glass half empty sort of people.

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