SBS says small banks have had a lending opportunity
Big banks hesitating on home loans have given smaller operators a chance to pick up business.
SBS has posted a $27.4 million profit in the 2017 financial year, up 37 per cent from the previous year.
Residential home loan lending was up 21 per cent.
SBS has been competing heavily on price. It has a one-year home loan special of 4.59 per cent on offer and is promoting 4.85 per cent out to two years, compared to a median in the market of 5.14 per cent.
The amount of lending going through SBS from NZFSG mortgage brokers, a group with about 1000 advisers, has doubled year-on-year.
SBS chief executive Shaun Drylie said the bank had re-engaged the broker channel since he took on his role, and it was now responsible for about a third of new business.
SBS had been able to make the most of opportunities presented by the big banks, he said. "A few months ago we could see the large Australian banks had funding ratios to realign and there are opportunities to continue to grow in that area."
He said New Zealanders were keen to put their business with local operators, provided the rates and products were the same, because they could see the profits remaining in the country. "That theme seems to be growing in the market."
He said SBS was focused on making it easier for customers to do their banking.
"We are investing in new technology, staff development and branch upgrades, to ensure we continue to evolve to meet the changing needs of our members. Our new mobile banking app and internet banking platform allows members to bank wherever and whenever they want, and our new 'virtual branch' gives members who do not live near a branch, access to banking services."
Chairman Jonathan Ward acknowledged concerns about a slowdown in economic growth or housing market vulnerabilities in the future.
"Whilst 2017 produced a very acceptable result we are now very focused on the future. The 2018 financial year will involve challenges but opportunities too. SBS Bank is robustly capitalised which allows the executive and board to focus on a strategic framework that will continue to protect members' interests and enhance outcomes for them."