Heartland Switches Acquisition Focus from Avenue to Challenger
(19 October 2022 – Australia) Heartland Finance is set to acquire Challenger Bank for A$36 million while also announcing it will no longer seek to acquire neobank Avenue.
The acquisition includes Challenger Bank’s A$17 million corporate lending book, A$89 million retail lending book plus A$228 million of deposits. The acquisition is designed to help achieve Heartland’s strategic objective for expansion in Australia, which includes becoming a bank. By becoming an authorised deposit-taking institution (ADI), it would be able to access to a deep and efficient pool of funding to support ongoing growth and potentially improve margin.
Heartland Finance is part of Heartland Group, a financial services group with operations in Australia and New Zealand having become New Zealand’s 22nd bank in 2012. The group specialises in reverse mortgages in Australia, offered small business loans since 2015 and plans to transfer its existing reverse mortgage and livestock businesses in Australia to sit either in or under the Challenger Bank brand once the deal is closed.
“We have conducted extensive analysis and considered the future strategic value of the Bank and its ability to contribute to Challenger’s purpose of providing our customers with financial security for a better retirement. The sale will allow us to focus on our Life and Funds Management businesses and leverage the scale we can achieve through strategic partnerships. The bank will now be positioned for long term success under Heartland’s ownership and will benefit both the bank’s employees and its customers” commented Challenger CEO, Nick Hamilton.
Subscribe