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

 

ETS Review: Modelling Documents Released

Three technical documents are being released to help New Zealanders engage with the Emissions Trading Scheme (ETS) review, Climate Change Minister Paula Bennett says. More>>

ALSO:

Northland: Govt Plan Targets Transport, Web, Maori Assets

The government has released a 10-year plan to attract investors and lift economic growth in Northland, a region that perennially underperforms the rest of the country even while being endowed with natural beauty, productive land, minerals, a potential workforce, scope for manufacturing, forestry and aquaculture, and proximity to Auckland. More>>

ALSO:

Statistics: Unemployment Rate Falls To 5.3 Percent

The unemployment rate fell to 5.3 percent in the December 2015 quarter (from 6.0 percent), Statistics New Zealand said today. This is the lowest unemployment rate since March 2009. There were 16,000 fewer people unemployed than in the September ... More>>

ALSO:

Employment: Labour Urges Talley’s To End AFFCO Lockout

Labour has urged Talley’s to resolve the ongoing industrial dispute with AFFCO workers which is having a severe effect on the employees, their families and their communities, Labour’s Workplace Relations spokesperson Iain Lees-Galloway says. More>>

ALSO:

Three Kings: Govt To Oppose Appeal Blocking $1.2B Auckland Housing Plan

Environment Minister Nick Smith and Housing New Zealand have joined legal proceedings in support of Auckland Council and Fletcher Building opposing a bid by community groups to only allow low-rise housing in a $1.2 billion housing redevelopment on the disused site of the Three Kings quarry. More>>

ALSO:

Transport: Jetstar Expands Regional Network With Three New Routes

More New Zealanders than ever before will have access to Jetstar’s affordable flights when new services take off today from Auckland to New Plymouth and Palmerston North, and Nelson to Wellington. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news