Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


TSB Bank profit slips 5.9% on Solid Energy writedown

TSB Bank full-year profit slips 5.9% on Solid Energy writedown

By Paul McBeth

May. 29 (BusinessDesk) - TSB Bank, one of the six lenders that agreed to a debt restructuring for Solid Energy, reported a 5.9 percent decline in annual profit after writing down the value of preference shares held in the state-owned coal miner.

Net profit fell to $50 million in the 12 months ended March 31 from $53.1 million a year earlier, including the full impairment of the Solid Energy redeemable preference shares valued at $13.8 million, the Taranaki-based lender said. Net interest income rose 2.5 percent to $109.7 million, and the bank reported income of $4.4 million from its quarter-stake in fund manager Fisher Funds.

"If you did strip out the Solid Energy charge, the financials would be a record result for the bank," chief executive Kevin Murphy told BusinessDesk. "The prudent thing to do was to take the provision upfront."

Solid Energy was forced to go to the government for a bailout after global coal prices tumbled, having taken on too much debt to fund an ambitious expansion. The government negotiated a debt restructure, which saw lenders including TSB write off $75 million of the $369.7 million they were owed in exchange for the preference shares.

TSB grew its loan book 7.7 percent to $3.1 billion in the year, of which residential mortgages rose to $2.59 billion from $2.49 billion. It stepped up its expansion into rural lending, focusing on dairy in and around Taranaki, with lending growth of 56 percent to $214.7 million. Commercial lending grew to $239.2 million from $189.4 million.

Since the introduction of restrictions on low-deposit home lending in October last year, competition for residential mortgages at a sub-80 percent loan-to-value ratio has become more intense, Murphy said. TSB is "very mindful" of the recent downgrade in the dairy forecast, but has the scope to diversify more into agricultural lending, he said.

The bank spent $32.8 million buying 26.4 percent of Fisher Funds last year, and Murphy said the benefits have been greater than originally anticipated. TSB is in the process of training staff so they can sell the fund manager's products.

Deposits rose 4.4 percent to $5.16 billion as at March 31 from a year earlier.

TSB's board declared a dividend of $10.2 million for its shareholder, TSB Community Trust, down from $11 million in 2013.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news