Sharechat Logo

Heartland investment grade credit rating affirmed, shares gain

Thursday 18th October 2012

Text too small?

Heartland New Zealand, the lender formed from the merger of Pyne Gould's Marac Finance with the Canterbury and Southern Cross building societies, had its investment grade credit rating affirmed as it crosses its fingers to secure a banking licence.

Rating agency Standard & Poor's kept a BBB- rating for Heartland Building Society with a stable outlook, citing its strengths as very strong capital and earnings assessment, good geographic and business diversity, and sticking to its timeline for its post-merger plan.

S&P sees Heartland's weaknesses as susceptible asset quality in commercial property, reliance on retail deposit funding, and its relatively small size in the market.

The affirmation comes as Heartland waits for the Reserve Bank to decide on whether to approve its banking licence, which is expected to be announced next month.

Heartland's shares rose 1.5 percent to 70 cents in trading today, and have rallied 41 percent this year.

S&P held its stable outlook on the rating, saying it didn't expect an upgrade in the short-term., although one could be forthcoming if Heartland strengthens its position with a banking licence and shows it can compete with New Zealand's major lenders on factors other than price or underwriting standards.

In August, Heartland chief executive Jeff Greenslade said the lender won't be chasing the low margin residential mortgage market, and will focus on building its more valuable motor vehicle, rural and small and medium sized enterprise loan books.

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Heartland to buy ‘home equity release’ business for $87M, to raise $20M from shareholders
Heartland FY profit slides 71 percent to $6.9 mln on charges to take distressed assets in-house
Heartland heads off low-ball offers with plan to pick up brokerage on small share parcels
Heartland shares rise to 2-year high, debt rating affirmed after taking control of bad loans
Heartland cuts 2013 earnings guidance, taking distressed assets in-house, sees growth in 2014
Heartland NZ lifts 1H profit by 9.2 percent on improved retail, business and rural earnings
Heartland gets approval for bank licence
Heartland sees flat profit in 2013, announces special dividend
Heartland will focus on high-margin business
Heartland triples annual profit, meets earnings guidance