SBS Bank records $6.54m after-tax profit

Sticking "to its knitting" and focusing on "mum-and-dad lending" has helped SBS Bank to a six-monthly after-tax profit of $6.54 million.

The result, for the six months ended September 30, is above the $5.36m recorded for the same period last year.

The Invercargill-based bank's operating surplus for the first six months was $9.65m, in line with the $9.93m reported for the same period last year.

SBS Bank general manager finance Tim Loan said the result was pleasing considering the economic environment of the past year. "We're all experiencing the impacts of the downturn, so we've had to make extra provisions but in spite of that we've been able to keep our profitability."

Customer deposits had grown by more than 15 per cent – almost $300m – in the 12 months since the bank was registered a year ago, with savings levels now $2.23 billion.

Total assets increased $71.9m to $2.61b while total lending was up $58m to $2.46b, Mr Loan said.

The bank had not been as exposed to non-residential lending as other banks, with mum-and-dad lending its core business, and it was not in the Auckland market, which had helped its balance sheet, he said.

SBS Bank's other subsidiary businesses had done well – funds management, insurance, and retailer finance companies.

The outlook for the next 12 months was encouraging but they would continue to stick to their knitting, Mr Loan said.

"We're very enthusiastic about the outlook. Generally, the mood in Southland has been very good through this period. There are opportunities out there and we're very keen to look at them as they come but we're certainly not going to be doing anything stupid."

SBS Bank's total regulatory capital increased $20.4m, with its capital ratio 13.4 per cent – one of the highest ratios for registered banks in New Zealand, he said.

- © Fairfax NZ News

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