Bank gives money back
The Co-operative Bank's major rebranding exercise has paid off, with a $1 million rebate distributed to its customers for the first time.
The customer-owned bank has been doing business for 85 years under the name PSIS, but was granted official bank status only 18 months ago.
In its first year as a registered bank it posted a much improved profit and a net inflow of more than 3600 customers.
"We believe it demonstrates that the decision to pursue a banking licence and rename was the right one," chief executive Bruce McLachlan said.
Almost all of the bank's customers will receive a rebate this weekend, ranging from $5 to $200.
"The board's going into it very much with the intention that not only are we going to do this long-term, but we're going to increase those rebates," McLachlan said.
The bank made an after-tax profit of $5.76m in the year to March 31, up 1.7 per cent.
Unlike a dividend payment, a rebate is taken out of official profit figures before they are reported. After adjusting for that difference, the bank's profit rose almost 19 per cent.
The bank will remain well cashed-up after the distributions with a capital adequacy ratio of 16.9 per cent, one of the strongest in the industry.
Retail deposits, which the bank wholly relies on to fund lending, grew 7.3 per cent to $1.3 billion.
Chairman Steven Fyfe would not disclose the exact formula used to determine how the $1m payout was shared.
However, he said the factors taken into account included tenure, and the breadth and scale of business that customers brought to the bank.
Fyfe said the co-operative would would stick to its knitting in the retail banking space.
"We're never going to be the largest bank in New Zealand, but we think there is definitely potential for this bank to grow."
The Co-operative Bank offers standard personal banking products including loans, term deposits, insurance and internet banking, and will launch a credit card this year.
Fyfe said it had a real point of difference as a 100 per cent customer-owned bank, and would aim to boost numbers from 128,000 to 200,000.
The bank had bled a couple of thousand customers each year under the old branding, Fyfe said.
"The PSIS name was confusing - a heritage of the Public Service Investment Society."
Without the backing of a parent company, strong governance will be particularly crucial to the bank's success.
Anyone can be nominated to be a director, and customers are entitled to vote at the annual meeting on July 25.
Fyfe said there was a filtering process in place to make sure only "high-calibre, appropriate members" were endorsed.