Heartland Bank wants to raise up to $30 million through a placement and share purchase plan to maintain its capital ratio after strong lending growth, as well as support its digital strategy.
The placement will be conducted today through a bookbuild for institutional and other select investors in New Zealand and Australia, run by First NZ Capital, the bank said in a statement. Heartland will raise up to $20m through the placement.
The share purchase plan, which will raise as much as $10m, will offer New Zealand-resident shareholders up to $15,000 worth of shares. Heartland said the final terms will be announced early next year, after its first-half earnings are published in February, but noted that the shares will be offered at a discount. Following this, the bank may issue Tier 2 capital "with a view towards optimising its capital position", it said.
"Heartland expects receivables growth to continue for the rest of FY17 - in particular, during our traditionally high-volume month of December," it said in a statement. "In order to further invest in our digital strategy, and to ensure Heartland continues to have sufficient capital to support that growth, Heartland intends to raise up to $30 million of new capital."
Heartland said it had been investing in data analysis to "more precisely" target its customers, and has put resources into supporting digital origination. Net finance receivables rose to $3.25 billion as of September 30, from $3.11b in June 2016 and $2.86b the previous June.
