SBS Bank reports higher surplus, says open to mergers

SBS Bank, the former Southland Building Society, reported an operating surplus of $19.4 million in the year to March 31, up from $18.5m last year and said it is open to mergers with like-minded organisations. The net surplus after tax of $15m is up from $12m last year and is the highest since 2007. SBS Bank chief executive Ross Smith said it was pleasing performance in one of the most difficult economic periods in the 141-year-old history of the organisation.

SBS Bank, the former Southland Building Society, reported an operating surplus of $19.4 million in the year to March 31, up from $18.5m last year and said it is open to mergers with like-minded organisations.

The net surplus after tax of $15m is up from $12m last year and is the highest since 2007.

SBS Bank chief executive Ross Smith said it was pleasing performance in one of the most difficult economic periods in the 141-year-old history of the organisation.

"The response from our customers and the wider market to our New Zealand-owned status and increased credibility as a young, customer-owned bank, coupled with our long history of providing a secure haven for investors, saw our depositors funds grow by $133m, or 6 percent, to $2.26 billion," he said.

Mr Smith said transitioning to the more highly-regulated banking environment had proven to be one of the best decisions in SBS Bank's history.

The bank's liquidity improved at a time when cash and capital was the primary focus of our regulators.

Total assets increased by $87m to $2.63b.

Mr Smith said SBS Bank's decision approximately 10 years ago to diversify had stood the organisation in good stead. The company's funds management and life insurance business had contributed positively to the operating surplus.

Last month Canterbury Building Society, Southern Cross Building Society and Pyne Gould Corp said they were considering merging to create a New Zealand-owned banking group.

SBS Bank said today that there may be opportunities for it in the future.

"The market is such that we expect there will be opportunities in the future for us to merge with like-minded, mutually owned organisations and we will continue to pursue those opportunities in an effort to give further momentum to our objective of creating a national community bank.

"Meanwhile, at SBS Bank we believe in keeping it straightforward. We will continue to stand by our cornerstone values of mutuality and commercial prudence to ensure the financial well being of our customers and that community support remains at the forefront of everything we do."

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