‘Customer first’ dedication delivers strong TSB Bank result

MEDIA RELEASE

‘Customer first’ dedication delivers strong TSB Bank result Highlights:

·         10.6% increase in net profit before tax to $73.5 million, which was achieved while retaining the Bank’s low/no fee philosophy.

·         Depositor funds increased by $224 million, or 4.8% to $4.9 billion.

·         Loan portfolio increased by $124 million or 4.5% to $2.9 billion – supported by 38% growth in the rural portfolio and 24% growth in the commercial portfolio.

·         At 14.56% the Bank’s Capital Adequacy Ratio, an industry measure of financial strength, remains significantly above the Reserve Bank’s 8% benchmark.

·         TSB Bank continues to lead the sector in Customer Satisfaction ratings, most recently being awarded the Canstar Blue Most Satisfied Customers Award – Banks for 2013.

In releasing its 2013 annual result today, TSB Bank says it continues to see positive growth in customer numbers as it capitalises on intense competition in the residential mortgage market to draw dissatisfied customers away from competitors.

TSB Bank’s net profit before tax increased by 10.6% to $73.5 million enabling it to return a dividend of $11 million to its sole shareholder, the TSB Community Trust.

“A 10.6% increase in net profit before tax is a result that we’re proud of given the environmental and competitive challenges that continue to put pressure on the margin,” says TSB Bank CEO, Kevin Murphy.

“TSB Bank continues to foster a very loyal customer base, which is why we’ve seen steady growth in a relatively flat credit sector.

“Now that swapping banks has become easier than ever, banks have to work harder to retain their customer base. By putting our customers first, we continue to carve out a unique and rewarding place in the market,” says Mr Murphy

For over 10 years TSB Bank has been at the forefront of Customer Satisfaction ratings. According to the latest Canstar Blue survey of 2,240 New Zealand consumers, TSB Bank continues to out-rank the big banks on ‘overall satisfaction’ receiving maximum ‘five-star’ ratings for call centre service, range of financial products, problem solving, efficiency in dealing with inquiries and friendliness.

The Canstar Blue Award was backed up by recent Roy Morgan Research where TSB Bank achieved a market leading Customer Satisfaction rating of 93.4%, well ahead of the big banks average of 78.3%.

“Customers and independent research tells us that when it comes to putting customers’ first, we’re doing it better than the big banks,” says Mr Murphy.

TSB Bank, which is wholly New Zealand owned, said today that customer deposits rose 4.8% to $4.9 billion during the 2013 financial year. The bank’s loan book, which stood at $2.9 billion at the end of March, is also up 4.5%.

“As well as helping New Zealand families into home ownership, we’ve also seen positive growth in our rural and commercial portfolios without making any changes to the banks prudent credit criteria,” says Mr Murphy.

The majority of TSB Bank’s loan book comes from its core market of residential mortgage lending, but the bank has also seen success from its diversification into the rural and commercial sectors.

Over the last twelve months, TSB Bank has managed to increase its rural portfolio by 38% and commercial portfolio by 24%. Loan arrears over three months remain at 0.4% of the portfolio, a percentage significantly lower than those reported by the other New Zealand banks.

“As we broaden the bank’s channel mix, geographic spread and product offerings the number of new customers joining the bank continues to grow.

“Our ‘putting you first’ brand promise means we must continue to meet people’s banking needs and preferences into the future. We will continue to invest in the technology and capability needed to ensure we do just that.

“At the heart of this will be service delivery - and on this we’re committed to delivering the very best customer experience across multiple platforms and channels,” says Mr Murphy.

ENDS

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