SBS Bank posts healthy operating surplus of $19.4m

SBS Bank posts healthy operating surplus of $19.4m

New Zealand’s only customer-owned Community Bank, SBS Bank has announced a solid profit result, greater liquidity and stronger capital ratios in its first full year of trading as a registered bank.

At a time when many within the banking, finance and savings sectors throughout the world have either failed, moved into receivership or moratorium or been forced to merge within their sector, SBS Bank has posted a solid operating surplus of $19.4 million, up from $18.5 million last year, and a net surplus after tax of $15 million, the highest since 2007.

SBS Bank chief executive Ross Smith said it was another solid and pleasing performance when the past two years had, without question, been amongst the most difficult economic periods in the 141-year-old history of SBS Bank.

“Success does not happen by accident and while SBS Bank has been impacted by the economic downturn this has been mitigated by the prudent and conservative way in which we manage the business and by having a blend of the right people, the right attitude and the right business model.

“The response from our customers and the wider market to our New Zealand-owned status and increased credibility as a young, customer-owned bank, coupled with our long history of providing a secure haven for investors, saw our depositors funds grow by $133 million, or six percent, to $2.26 billion.

“Transitioning to the more highly-regulated banking environment has proven to be one of the best decisions in our 140-year history. It is pleasing to see liquidity levels up $27 million, (6%), to $461 million, at a time when cash and capital seems to be the primary focus of our regulators.

“Other key highlights have included an increase in advances under management by $56 million to $2.46 billion and an increase in total assets of $87 million to $2.63 billion.”

Mr Smith said SBS Bank’s decision approximately 10 years ago to diversify its products and services had certainly stood the organisation in good stead during the difficult economic times of the past two years.

“The decision to establish our consumer finance company, Finance Now Ltd, a funds management company, Funds Administration NZ Ltd, and give some additional impetus to an existing life insurance company, Southsure Assurance Ltd has continued to prove successful with our subsidiaries all contributing positively to our operating surplus.

“The market is such that we expect there will be opportunities in the future for us to merge with like-minded, mutually owned organisations and we will continue to pursue those opportunities in an effort to give further momentum to our objective of creating a national Community Bank.

“Meanwhile, at SBS Bank we believe in keeping it straightforward. We will continue to stand by our cornerstone values of mutuality and commercial prudence to ensure the financial well being of our customers and that community support remains at the forefront of everything we do.”

SBS Bank will hold its Annual General Meeting at the Invercargill, Head Office, 51 Don Street on Monday 26 July, at 5.30pm.

ENDS

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