Building society merges to become bank

Hastings Building Society is becoming a bank. Yesterday its members voted 98 per cent in favour of a merger with Southland's SBS Bank at a special meeting held  at Havelock North Community Centre.
SBS Bank chairman Acton Smith was visibly moved by the clear mandate for the merger.
"This is an enormous day for SBS. We will deliver on all of our promises," he said.
Under the  agreement all staff and management will be retained and the 125-year-old Hastings Building Society (HBS) brand will continue. Community sponsorship in Hawke's Bay will increase to $100,000 a year.
Existing depositors will receive an initial interest rate premium for term deposits.
Upgrades of existing branches are planned, and a new branch  introduced in Havelock North this year.
Frank Spencer, chairman of HBS, said the fact that SBS was also a mutually owned organisation was what interested him in the merger. That
 meant all depositors and borrowers automatically became an owner with one voting right.
Decisions such as the merger required a 75 per cent majority.
Mr Smith said the mutual ownership structure was also important to SBS as were the similar values and economies of the regions.
"Hawke's Bay is  similar to Southland, except for the weather," he said.
Mr Spencer said the merger would help HBS achieve its long-term goals.
"Before the global financial crisis, scale was becoming an issue.  We are a small boutique organisation and we were playing with the big boys in a fairly ferocious market. We were succeeding, however, in the long term we were likely to be exposed."
The Government's response to the recent financial crisis imposed extra requirements on HBS which they found difficult.
"But the key thing was we needed to appeal to the future generations," he said.
Mr Smith told Hawke's Bay Today that HBS members would have all bank facilities, including internet banking, within months.
The six directors from SBS were questioned by the 178 members present for nearly an hour before ballots were cast. Other members had voted  by mail.
Upon completion of the merger, HBS members will become members of SBS Bank.
Mr Spencer would take a seat on the SBS Bank board created specifically as a result of the merger, pending his approval by the governor of the Reserve Bank.
SBS Bank had assets of $2.63 billion and HBS had assets of $185 million.
Invercargill based SBS Bank currently had 15 branches including four in Christchurch and two in the North Island.
Ted Duffel, Hastings Grey Power vice-president told Hawke's Bay Today  his members were encouraged to support the merger. "Not only was the merger a good idea, it was the only idea," he said.