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SBS Bank, the former Southland Building Society, has reported a 15 percent rise in bottom line profit it attributes in part to servicing Auckland mortgage clients from Invercargill.
The surplus of $15.64 million in the year to March 31, 2014, was up from $14.34 million the previous year and was achieved on interest income of $169.94 million, down from $176.93 million the previous year. Operating profit rose 5.4 percent to $22 million.
"Initially an Auckland regional manager was appointed to service mortgage brokers in the Auckland area, however, the success of this move prompted the establishment of a centralised lending unit based in Invercargill," chief excutive Ross Smith said. "The unit is a virtual SBS branch and now provides support to all mortgage brokers throughout New Zealand."
Smith is stepping down as chief executive at the end of July after 22 years at the helm.
He said in addition to an increased range of products and the move into the Auckland market, SBS had focused on training staff so they could provide better customer service in a changing banking market.
The bank had $161.74 million of residential mortgages with a loan-to-value ratio of greater than 90 percent but 92 percent of these were Welcome Home Loans, a product which is fully insured by Housing New Zealand Corp. The total residential loan book was worth $1.72 billion as at March 31.
Provisions for credit impairment of $10.53 million were down from $17.3 million the previous year.
SBS Bank will hold its annual general meeting in Invercargill on July 23.
It began business as Southland Building Society in 1869.