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Heartland Bank's credit rating has been upgraded by international rating agency Standard & Poor's, based on its growing lending into niche markets.
S&P raised its long term rating from BBB- to BBB with a negative outlook, the latter because of economic risk and imbalances in the New Zealand banking system in general.
S&P credit analyst Nico DeLange said the upgrade reflected the fact Heartland's business position had strengthened during the past three years as it moved towards its core niche markets and out of non-core assets.
Heartland's expanding niche markets include vehicle finance, invoice financing, livestock and reverse mortgage loans, while it is exiting its non-core property portfolio and booking a gradual decline in residential mortgage lending.
S&P also raised Heartland subsidiary Marac Insurance's rating, from BB+ to BBB-, with a negative outlook, because it remained ''strategically important'' to the bank.