The proposed "heartland" bank will be applying for its banking licence in the second half of 2011, shortly after present 72% majority shareholder Pyne Gould Corporation distributes its stake to shareholders, sometime between April and June.
At present, 28% of the shares in newly listed Building Society Holdings, parent of the heartland bank proposal, are trading on the New Zealand Stock Exchange and the remaining 72% are held by Pyne Gould Corp, whose subsidiary Marac Finance merged with the Southern Cross Building Society and CBS Canterbury on January 7.
There are a total of 300 million shares.
It appears likely that when all shares go on the open market, Building Society Holdings will easily enter the NZX top-50 index.
When listed on February, at 88c, the share value offered a market capitalisation of $264 million.
They have since declined more than 15% in value, to 73c yesterday, reflecting a market capitalisation of $220 million, but that reduced capitalisation remains larger than top-50 companies such as Abano Healthcare, Steel & Tube, NZX, Cavalier and Rakon.
Analysts are awaiting an indication of Building Society's business plan, speculating the new entrant to New Zealand banking could take two to three years to gain a foothold in a highly competitive market, with tight borrowing and lending margins.
Building Society Holdings has not released any financial guidance statements yet, but in a update released this week said funding at January 31 stood at $1.22 billion in retail deposits, $104 million listed bonds, $275 million in a securitised programme and $200 million in undrawn bank facilities.
Craigs Investment Partners broker Chris Timms said while Building Society could enter the top-50 based on market capitalisation, for liquidity requirement Pyne Gould Corp would first have to release the remaining 72% of shares to its shareholders.
Pyne Gould, which was to have sold its Building Society shares to institutions to raise cash for a loan elsewhere, will instead distribute the shares to its shareholders, if Agria's partial takeover of PGG Wrightson goes ahead.
Pyne Gould Corp is a majority shareholder in the latter.
