Heartland New Zealand retail depositors continued to
demonstrate strong loyalty, group treasurer Craig Stephen
Heartland, which is applying to the Reserve Bank for a
banking licence, issued a capital raising, liquidity and
Mr Stephen said in an interview that Heartland was "very
pleased" with the results of the fundraising.
The Heartland retail deposit reinvestment rate during August
was 74%, with stable new fund flows.
An overwhelming majority of Heartland retail deposits - new
or reinvested - were now being made on a non-guaranteed
Only 5% of new retail deposits and about 22% of reinvestments
during August required the sole benefit of the Crown
There was acceptance by depositors of what Heartland was
trying to achieve, Mr Stephen said.
"Depositors know we are New Zealand- owned and New Zealand-
"They know that if we are raising money locally, we are
looking to invest locally. There is an affinity with that and
it is reflected in the loyalty of depositors."
Depositors were confident management could deliver on what it
said it could do, he said.
Mr Stephen planned to provide monthly updates to depositors.
Forsyth Barr broker Peter Young said Heartland would be very
happy with a re-investment rate of 74%.
"This demonstrates that investors view the company to be very
sound and are quite happy reinvesting their funds with them.
"Given they haven't yet got a banking licence, it proves
[chief executive] Jeff Greenslade and his management team are
doing a good job."
With the government guarantee expiring soon, investors needed
to start looking for secure places to invest their funds.
Heartland was providing a secure place for investors if it
met their investment criteria.
"Sooner or later the financial markets were going to have to
live without the security of the guarantee in place," Mr
Mr Stephen said Heartland had tried to increase the amount of
information made available to the market.
Banking was a relationship business with depositors and
Heartland made sure it kept in direct contact with investors
as well as advising the market.
The structural pillars were in place, Heartland had a strong
balance sheet and surplus equity.
"We are well positioned and depositors recognise that."
Mr Greenslade said the Heartland share purchase plan had
closed, raising $12.4 million with 1090 shareholders
The result was ahead of expectations and pleasing in light of
the recent volatility in global financial markets.
Ahead of the planned placements to Pyne Gould Corporation and
PGG Wrightson, the share purchase plan was designed to ensure
fairness and equity to all shareholders. The total capital
committed to the share purchase plan and placements was $58
million at an average issue price of 65c.
Shares were trading yesterday at 56c.
The completion of the acquisition of PGG Wrightson Finance
was expected to proceed today, Mr Greenslade said.
Impact Capital, Pyne Gould Corp and ACC would become the
three largest institutional shareholders in Heartland.
Impact was a long-term value investor and shared Heartland's
desire to promote and develop a New Zealand-controlled
financial services business dedicated to the provision of
financial services to the productive sector and to families
within New Zealand, he said.
PGG Wrightson would also become a significant shareholder in