Troubled New Zealand financier, South Canterbury Finance, has finally got a new prospectus into the market so that it can raise funds from the public again, and last week was musing on the possibility of splitting its businesses into a 'good bank' and 'bad bank'. South Canterbury Finance recently had its New Zealand government guarantee extended to the end of 2011, but with its new prospectus now released it will be looking to raise unguaranteed funds. The 'good bank' business would include equipment financing and rural lending, those activities where South Canterbury sees itself having a competitive advantage relative to the banks. The 'bad bank' business would house its discontinued activities, such as large real estate loans, and South Canterbury's equity investments in South Island Farm Holdings and Dairy Holdings and associated loans.Naturally, both businesses will need to be separately capitalised and this is likely to require new capital to be raised in addition to the NZ$202 million raised since the start of this year.