Hastings Building Society is set to become HBS Bank following a proposed merger with Southland-based SBS Bank.
HBS board chairman Frank Spencer said while there were still "more boxes to tick", a heads of agreement had been signed with SBS Bank to pursue a merger of the two New Zealand mutual
building societies.
He expected members' first reaction would be "one of nostalgia", yet the rationale behind the 125-year-old brand's merger was strong. "Times remain tough in the financial sector and the challenges of increasing regulation in a competitive environment are real for a small organisation such as HBS," he said.
Operating environments for financial institutions had changed dramatically as a consequence of the global financial crisis.
"HBS prefers to be a leader rather than a follower in this new operating environment; to be making the best decisions rather than having dictates imposed on us."
No job losses were expected at the Napier or Hastings branches.
The HBS brand was synonymous with local sponsorships in Hawke's Bay, and the potential merger would guarantee increased community distributions, he said.
On completion of the merger, HBS members will become members of SBS Bank and will have representation on the SBS board.
Society members would receive information in the mail in the next few days that sets out the changes.
