Cooperative Bank posts flat annual earnings as shrinking margins offset lending growth
The Cooperative Bank, which distributes rebates to its customer-shareholders, posted flat annual earnings as shrinking margins offset lending growth from an expanding customer base, and as impairment charges on bad debts rose.
Net profit was little changed at $10.3 million in the 12 months ended March 31, with an unchanged $2.1 million rebate, the Wellington-based bank said in a statement. The bank's mortgage lending grew 17 percent in the year, driving most of the gain in its loan book to $2.1 billion as at March 31. Customer deposits grew 14 percent to sit at $2.03 billion at the March 31 balance date. Impairment charges climbed to $2.2 million from $1.4 million a year earlier.
"Strong customer growth is a standout achievement in the past financial year, one of many transformational outcomes in what has been a year of firsts for the bank," chairman Steven Fyfe and chief executive David Cunningham said in the annual report. "The board and management continue to focus on growth, which means not only attracting new customers but, equally as important, growing our relationships with existing customers, increasingly via digital channels."
Cooperative Bank appointed Cunningham chief executive this month, replacing Bruce McLauchlan who left at the end of March to head fund manager Fisher Funds Management.
The bank added 15,000 customers in the year, taking its total to 156,000 customers who shared in the rebate. The lender was granted a banking licence in the latter half of 2011 and rebranded from its former incarnation as PSIS when it had 127,000 customer-owners.
The lender increased its total capital ratio to 16.9 percent from 15.8 percent a year earlier, more than twice the minimum 8 percent level required.
The lender issued $15 million of 10-year subordinated notes paying annual interest of 6 percent and listed them on the NZX's debt market in July. The notes last traded at $100.541 per $100 face value, representing a yield of 6 percent.