Pyne Gould Corporation (PGC), a New Zealand
investment and finance firm, has unveiled plans to merge with two
savings institutions to form a retail bank.

PGC’s finance subsidiary MARAC has signed a
memorandum of understanding with Canterbury Building Society (CBS)
and Southern Cross Building Society (SBCS) to launch a retail bank,
with the aim of doubling a combined NZ$2.2bn asset base within five
years.  

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The new retail bank will also have around 70
customer outlets, but the move is subject to the approval of a
banking licence application, expected to be submitted by
mid-2011.   

The merged entity said it plans to offer an
alternative to the “incumbent banks” in the target market and build
“valuable market share”, with a branding strategy based on the
“Heartland” vision of the three companies involved, or a strategy
based on the core needs of Kiwi families, small businesses and
agriculture. 

In a joint statement, the firms said: “The
banking licence brings advantages such as credibility and a lower
cost of funds – levelling the playing field with other banks here,
which are mainly Australian-owned and driven.” 

“We see a significant opportunity in entering
the banking market as it is clear to us that New Zealanders and New
Zealand businesses are seeking an alternative to the incumbent
banks in the markets we intend targeting.”  

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The largest four banks in New Zealand by assets are all
Australian-owned.  ANZ is the biggest by assets and owned by
Commonwealth Bank, followed by BNZ (owned by NAB), ASB and
Westpac.