Heartland Group says it has signed a deal to acquire TSB Bank for $620 million and create "a New Zealand challenger bank of scale with a regional focus".
Under the proposed deal, Heartland Group Holdings will acquire all TSB shares from the Toi Foundation and then merge to create TSB Heartland Bank Limited.
TSB Heartland Bank would become New Zealand's seventh largest bank, with around $15 billion in total New Zealand assets.
Heartland chief executive Andrew Dixson said the sale would enhance the bank’s ability to compete and increase financial resilience.
"By combining Heartland Bank’s specialist product expertise with TSB’s cost-effective funding platform and transactional banking capabilities, TSB Heartland Bank will be a full-service capable bank differentiated by its specialist product offerings, with a lower risk-weighted product portfolio," he said.
"As a larger bank, TSB Heartland Bank will be in a stronger position to keep investing in products and technology, while supporting the delivery of improved financial returns for our shareholders," Dixson said.
The deal was expected to be completed in December, pending appropriate regulatory approvals, including community consultation with Taranaki residents which runs from June 3-30.
Toi Foundation said it believed the proposal would help increase sustainable long-term cash returns, diversify investment risk, ensure longevity for TSB and maintain a connection for TSB with the Taranaki region.
TSB, or the Taranaki Savings Bank, has been owned by Toi Foundation - a perpetual philanthropic community trust, which also owns 66% of Fisher Funds - since 1988.
Heartland is an Australasian financial services group providing specialist banking products to New Zealanders and Australians.
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