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PSIS reports a record end-of-year financial result

PSIS reports a record end-of-year financial result

Despite a challenging economic environment across the globe, PSIS chair Sir David Gascoigne announced today that PSIS has had a record year with its 2009/2010 annual performance well above forecast, delivering a profit of $16.6 million before tax.

Sir David said that the level of the profit does need to be put into a context as it is primarily due to a combination of favourable interest rate margins and low loan losses.

“The low loan losses are due to prudent lending policies and effective credit risk management processes. These processes have helped us to proactively identify members at risk of going into arrears and we’ve worked with them to try and get them back on track. As a result our loan losses at $3.2 million (0.29% of total loans), are considerably lower than the wider industry.”

“Over the last year we’ve strengthened our balance sheet. Our deposits have lifted by 5%, our reserves have grown to $117 million, and our capital adequacy ratio, at 17.1% is double the minimum regulatory capital requirement,” he said.

“In addition to the functional areas of strong performance, much of our success can be attributed to our New Zealand ownership, co-operative structure and the values and purpose that are inherent in co-operatives like ours. It’s interesting to note that the same seems to have held true for co-operatives and mutuals across the globe, which have weathered the economic crisis relatively well,” Sir David said.

PSIS chief executive Dr Girol Karacaoglu said the strong earnings have strengthened our already healthy capital position and provide us with a firm base for future growth.

“Going forward it’s predicted that interest margins will contract. However, while we anticipate the economic recovery will be slow, we’re expecting our loan losses will continue to reduce. Overall we expect to have a more normalised, yet sound, profit for the 2010/2011 financial year.”

Dr Karacaoglu said, as a co-operative our earnings from operations are only one metric on our organisational report card.

“We also aim to sustain high levels of member loyalty and employee engagement. I’m pleased to note that as a result of our commitment to remaining true to our values, our service offering and the way we relate to our members, members’ satisfaction has increased from 73 percent to 80 percent over the past year. Positive results from our employee satisfaction survey also show PSIS is a great place to work.”

PSIS also notes that its awareness measures are going up sharply as more people realise that anyone can bank with PSIS, and how this is special.

“As a co-operative we’re 100% owned by our members, we exist solely for their benefit, and their best interests are our number one priority. We’re proud of our co-operative status, it’s our key differentiator,” Dr Karacaoglu said.

“Our members already benefit from lower home loan rates, higher deposit rates and great fee exemptions, but with this result we’ll be focusing on giving greater effect to our members’ ownership over the coming months. We’ll explore new ways in which we can provide further tangible benefits to members and involve them more in the decision-making at PSIS.” Dr Karacaoglu said.

($m) 2008/09

Net Interest Income 49.6 35.9
Non-Interest Income 18.4 17.3
Treasury Asset Valuations -0.3 6.7
Total Income 67.7 59.9

Total Expenses 51.0 49.3

Pre-Tax Profit 16.6 10.7
Less Tax -3.5 -2.8
Post-Tax Profit 13.1 7.9

Total Assets 1,395.5 1,327.0
Deposits 1,117.5 1,067.1
Loans 1,122.3 1,062.9
Total Reserves 116.9 103.7
Capital Adequacy Ratio (Basle II) 17.1% 14.6%
Capital Adequacy Ratio (NBDT) 12.1% 10.8%

To view PSIS’s 2010 Annual Report please visit

About PSIS

PSIS has been around since 1928, which makes us one of the longest-serving financial institutions in New Zealand. We were set up to help New Zealanders get ahead and that’s what we’ve been doing for over eighty years.

We provide just what you’d expect from a bank – current accounts, savings accounts, term deposits, insurance, personal loans and home loans. We have branches all over the country, and services to make banking easier, such as EFTPOS cards, and internet, telephone and text banking.

The difference is that we're a co-operative - 100% owned by our members, not by corporate shareholders. This means our members’ best interests are always our number one priority.


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