SBS growth strategy contributes to record results
SBS Media Release
SBS growth strategy contributes to record results for 2002/03
The growth strategy being pursued by the Southland Building Society (SBS), coupled with a buoyant housing and agribusiness property market, have contributed to record growth by SBS in the last year, Chief Executive Ross Smith says.
“In the 2002/03 year total assets grew 18%, to $1.34 billion. This record growth demonstrates that SBS is not only delivering the right products and services, but we are providing them in a way that appeals to customers,” he says.
Members’ equity has increased a record 14.7%, to $83.4 million and the pre-tax operating surplus is up 60% to a record $16.2 million.
Commenting on the results, Mr Smith says the strong New Zealand economy and the consequent demand for project finance have fuelled the greatest housing and property boom ever experienced. “Our extraordinary growth results not just from the strong economy, but also reflects the ready acceptance of our new products and services by members.”
Our products and services now include the new funds management subsidiary, Funds Administration of New Zealand Limited, the life insurance company Southsure Assurance Limited, and the personal loans business Finance Now Limited, as well as the continued success of new chequebook, EFTPOS and telebanking facilities.
During 2002, Funds Administration of New Zealand launched a new range of unit trusts, ‘Life Stages’, which made strong progress in a difficult investment climate and is performing up to expectations, according to Mr Smith. It addition, Fund Source (a funds management research company) announced that the SBS Capital Stable Fund had won the top award for the Defensive Portfolio Sector in Fund Sources 2002 Fund Manager of the Year Awards. By year end SBS had sold $32 million worth of mortgages into the Lifestages Mortgage Trust while still retaining management of these loans.
In the coming year Southsure Assurance will be offering enhanced insurance services designed specifically to meet the needs of SBS customers, with an increased range of life insurance-related services.
Finance Now, which has been operating for just over two and a half years, had a very successful year with the loan book doubling to over $40 million, and a profit contribution which exceeded budget.
The past year had seen a continuing focus on the development of electronic systems as the basis for SBS business. Products and services that demand access 24 hours, seven days of the week, from anywhere in the world, are supported by sound systems, Mr Smith says.
“Our focus on system security has increased dramatically and becomes even more important as we move toward introducing Internet banking.
“We are still making strides towards becoming a major player on the retail banking scene. During the year we also opened a new branch in Riccarton, Christchurch, and satellite offices in Central Otago and Tauranga.
“We are convinced there is an excellent future for a New Zealand-owned mutual in the banking sector focused on establishing long term relationships with members based around superior service at a competitive price,” Mr Smith says.
While SBS is aware that the buoyant conditions of the past year may not continue, the organisation anticipates steady progress due to the growth momentum established and the quality of its products and services.
Please note: Annual General Meeting of the Southland Building Society will be held on Wednesday 6 August, 5:30pm, on the 4th Floor, 51 Don St, Invercargill.
YEAR ENDED 31 MAR 2003
$000 YEAR ENDED 31 MAR 2002
OPERATING SURPLUS 16,226 10,140
PROPERTY REVALUATIONS 223 822
OPERATING SURPLUS BEFORE TAX 16,449 10,962
TAXATION 5,392 3,077
NET SURPLUS 11,057 7,885
MINORITY INTEREST (358) (71)
NET AFTER TAX SURPLUS 10,699 7,814
TOTAL ADVANCES 1,277,209 1,071,827
TOTAL ASSETS 1,343,670 1,138,241
MEMBERS RESERVES(EQUITY) 83,415 72,716
*NOTE: TOTAL ADVANCES EXCLUDES LOANS SECURITISED TO LIFESTAGES MORTGAGE PORTFOLIO ($32M)