Sharechat Logo

Heartland takes 10% stake in HarMoney, offers funding line through platform

Monday 8th September 2014

Text too small?

Heartland New Zealand has taken a 10 percent stake in peer-to-peer lender HarMoney for an undisclosed sum and will provide funding through New Zealand's only licensed platform as it continues to diversify its finance options.

Auckland-based HarMoney launched its online platform earlier this month, where it matches individual borrowers with lenders looking to invest, and determines the interest rate on the loan based on the credit risk of the borrower. Christchurch-based Heartland said it would provide a "funding line" for borrowers on the platform, without putting a dollar figure on how much this might be.

"The funding line will help provide initial momentum, complementing the investments made by retail investors," the bank said in a statement. "HarMoney and Heartland also intend to build on this relationship and are confident that scope exists to create high value products."

HarMoney was the first platform operator to receive a peer-to-peer licence under the new Financial Markets Conduct Act, which came into effect on April 1, providing legislation for a regime to match lenders with borrowers, with a $2 million cap on the amount allowed to be borrowed. The platform is looking to lure both investors and borrowers, offering loans of up to $35,000 with interest rates lower than credit cards for borrowers, and the possibility of a 12 percent risk adjusted return for lenders.

Heartland, formed from the merger of Canterbury and Southern Cross building societies and Marac Finance, has been chasing acquisitions outside of traditional banking options to help grow earnings, and in February announce the acquisition of a reverse mortgage business from Seniors Money International for $87 million. In July, Motor Trade Finances turned down an offer from Heartland which would have added a loan book of some $438 million.

"The shareholding in HarMoney complements Heartland's strategy and provides a potentially valuable channel to attract customers in the household sector that current distribution networks may not reach," the bank said.

Shares of Heartland were unchanged at 96 cents and have gained some 13 percent since the start of the year.

HarMoney and Heartland weren't immediately available for comment.

 

 

 

 

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:

Regional house price inflation accelerates in October
Sanford FY earnings flat on reduced volumes
NZ dollar extends gains, aided by US-China trade doubts
12th November 2019 Morning Report
MARKET CLOSE: NZ shares gain, retirement villages buoyed by Auckland housing market bounce
NZ dollar rises, shrugging off US-China trade war woes
Long-serving ACC investment chief calls it a day
Institutional investors continue to shun Fonterra
Card spending stalls; dearer petrol crowds out other goods
Abano directors cave to takeover by scheme of arrangement

IRG See IRG research reports