Farmers have welcomed the prospect of another bank chasing their business, but warn a new entrant may have to offer something new to break existing loyalties.
In announcing its intentions yesterday, the proposed South Island-based Heartland Bank said it would target a slice of the $47 billion rural debt market, something welcomed by Federated Farmers board member Philip York.
"We favour any banking competition and if it is home grown and financially sound, then it sounds like a good idea."
While a start to business was still some years off, Mr York said the Heartland Bank would have to offer something different for farmers to break their loyalty to their existing banks.
"It will take a bit to get people to change their bank," he said.
It would also have to prove it had sufficient equity and was soundly based to win farmer support, Mr York said.
