Legal threat slows $620m TSB–Heartland merger plan

Author: Jenée Tibshraeny,
Publish Date: Thu, 9 Jul 2026, 1:11pm

Heartland-TSB merger continues to be due for completion in December.

A legal threat by a group headed up by a former TSB chairwoman has successfully slowed progress on the proposed merger of TSB and Heartland Bank.

TSB’s owner, Toi Foundation, has announced it will give Taranaki residents more time to provide feedback on the proposed merger.

Toi, a Taranaki-centred philanthropic community trust, conceded that the time it gave residents to provide their views on the deal was a day short of the 28 days required under its trust deed.

This was one of many points opponents of the merger raised in legal letters sent to Toi yesterday and last week.

Toi will now re-engage with Taranaki residents for at least a month. On Tuesday it will confirm when the consultation period will end.

Heartland told the NZX and ASX it expected to hear back from Toi sometime in August.

It said its meeting with shareholders to vote on the proposal would be rescheduled due to the hold-up with Toi.

However, it still aimed to complete the transaction in December, subject to shareholder, Toi trustee and regulatory approval, as well as all the conditions of its agreement with Toi being met.

The proposition, unveiled on June 2, is for Toi to sell TSB to Heartland for $620 million to create “TSB Heartland Bank Limited”, and for Toi to reinvest in the new bank and secure a 17.5% shareholding in Heartland.

A Toi nominee and two existing TSB directors will have representation at board level.

In June, Toi chairman Chris Ussher said the structure would enable Toi to support the merged bank’s strategic direction, while also freeing up capital for it to invest in other projects and diversify its portfolio (Toi also owns 66% of Fisher Funds).

The pitch was that merging the banks would also create scale and efficiency.

While both banks have regional focuses, their differing product offerings would also be complementary.

This rationale doesn’t sit well with Elaine Gill – a long-serving former TSB director and chairwoman.

She teamed up with chartered accountant Kevin Landrigan and Pacific Winds International chief executive Aorangi Bobbie Matsuda to create an incorporated society that is throwing the book at Toi.

In its lengthy legal letters to Toi, the Taranaki Community Accountability Society Incorporated noted a petition opposing the merger had about 6927 signatories.

It raised several points, including about TSB’s profitability and Heartland’s reverse mortgage offering, which it described as “repugnant” and not in line with Toi’s trust deed.

The society also asked Toi several questions, including what the impact of the sale would be on jobs and bank branches in Taranaki.

TSB, which was founded in 1850 as the New Plymouth Savings Bank, has a large footprint in the region, which accounts for 31% of its lending and 49% of its funding.

In June, Heartland chief executive Andrew Dixson said the idea was for Taranaki to remain a “key operational hub for customer-based banking services – including maintaining a local branch network and customer-facing roles in Taranaki”.

TSB and Heartland are New Zealand’s seventh- and ninth-largest banks respectively, by assets. Once merged, the new entity would be the seventh-largest bank, behind the big four Australian-owned banks, Kiwibank and Rabobank.

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.