The owner of TSB has agreed to sell the bank to Heartland Group Holdings for $620 million in a deal aimed at creating a stronger, more commercially disciplined New Zealand challenger bank with a sharper regional focus.
Under the proposed transaction, the Toi Foundation will sell all of its issued shares in TSB to Heartland Group, paving the way for the formation of “TSB Heartland Bank Limited.”
Following completion, the Toi Foundation will reinvest in the combined entity, taking a 17.5% shareholding in Heartland Group. The arrangement allows the foundation to remain invested in the bank’s future performance while also releasing capital to support its broader philanthropic priorities in Taranaki.
A nominee from the Toi Foundation will also be appointed to the Heartland Group board, while two current TSB directors will join the board of the merged banking entity.
Toi Foundation chairman Chris Ussher said the structure would enable the foundation to remain engaged in the strategic direction of the bank, while also improving capital flexibility and supporting its wider community investment goals.
Meanwhile, Heartland chief executive Andrew Dixson described the merger as a step that strengthens the group’s ability to compete more effectively in a concentrated banking sector, noting the benefits of scale and specialisation.
“By combining Heartland Bank’s specialist product expertise with TSB’s cost-effective funding and everyday banking services, we’ll be able to offer more New Zealanders a better‑value banking alternative,” he said.
“As a larger bank, TSB Heartland Bank will be in a stronger position to keep investing in products and technology while supporting the delivery of improved financial returns for our shareholders.”
Dixson said the merger would allow Heartland to deploy capital more effectively across the group and provide the scale needed to achieve a stronger cost-to-income ratio through greater operating leverage.
The proposed deal is expected to be completed in December, subject to the necessary regulatory and shareholder approvals, with consultation also planned for Taranaki residents.