Cooperative Bank lifts annual profit 24% on expanding loans

Cooperative Bank lifts annual profit 24% on expanding loan book, fatter margins

By Paul McBeth

May 29 (BusinessDesk) - The Cooperative Bank, formerly known as PSIS, lifted annual profit 24 percent for a second year as it continued to expand its loan book, reduce bad debts, and fatten margins.

Net profit rose to $8.9 million in the 12 months ended March 31 from $7.1 million a year earlier, the Wellington-based lender said in a statement. Net interest income climbed 14 percent to $48.8 million, with net interest margins widening to 2.88 percent as at March 31 from 2.76 percent a year earlier, fatter than those of the major Australian banks which reported first-half earnings earlier this month.

The Cooperative Bank trimmed impairment charges on bad loans by 32 percent to $1 million, while expanding its loan book 11 percent to $1.56 billion, and its customer deposits by 12 percent to $1.57 billion.

The lending and deposit growth "reflects our consistent approach to pricing, setting the bank apart from its competitors who have tended to drift in and out of the market with aggressive pricing as it has suited them," chief executive Bruce McLauchlan said.

New Zealand's major lenders have been fighting for market share in the residential market, with Auckland's housing shortage and increased demand fuelling demand for mortgages. To try and rein in some of that exuberance, the Reserve Bank recently announced plans to impose high-leverage lending to property investors in the country's biggest city, which has been driving about a third of new loans.

The Cooperative Bank today said it added another 12,000 customers in the past year, and will pay $1.8 million in rebates to its customers for the 2014/15 financial year, up from $1.3 million a year earlier. The old cooperative structure the bank operates under means it shares its profits with customers, something it touts as a competitive advantage in attracting long-term customers.

(BusinessDesk)

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