SBS Bank lifts annual profit

SBS Bank lifts annual profit as residential and consumer lending increases

By Sophie Boot

June 23 (BusinessDesk) - SBS Bank, New Zealand's biggest building society, lifted annual profit 2.8 percent in 2016 as it worked to improve its presence in Auckland.

Net profit rose to $20 million in the year ended March 31, from $19.4 million a year earlier, the Invercargill-based company said in a statement.

Net interest income climbed 3.5 percent to $83.9 million, with its loan book expanding to $2.87 billion as at March 31 from $2.39 billion a year earlier. Of that, residential lending growth advanced 15 percent to $1.68 billion, while residential investment loans jumped 57 percent to $534 million.

“In a somewhat difficult financial year we have achieved significant growth – especially in wealth management, consumer finance, insurance and residential lending sectors which is meritorious given the extremely competitive market," chairman John Ward said.

Consumer lending rose 57 percent to $256.7 million in 2015. The bank held $699 million in funds under management as at March 31, up from $536.7 million a year earlier, and income from management fees advanced to $7.2 million from $5.6 million.

SBS has been trying to raise its profile since November 2015 when it launched a 3.99 percent one-year fixed mortgage rate, the lowest in decades.

The lender has focused increasingly on Auckland, with a national advertising campaign and mobile mortgage managers to increase awareness in New Zealand's biggest city. SBS doesn't break down its exposure to Auckland, but of its $3.4 billion in lending, $1.5 billion, or 44 percent, was in the North Island, up from 2015 when 38 percent of its $2.83 billion in loans was in the North Island.

Ward said the lender has also upgraded its systems and software to make it easier to do business with, and will continue to invest in IT, particularly the digital channel and further staff development in the year ahead.

Shaun Drylie will take over as chief executive in August, and interim chief executive Mark McLean will return to his role as chief risk and innovation officer.

(BusinessDesk)

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