TSB lifts profit 11 percent, lifting rural, commercial lending

Net profit rises to $53.1m in the 12 months ended March 31, from $47.8m a year earlier.

TSB Bank, which took a quarter stake in fund manager Fisher Funds earlier this year, lifted annual profit 11 percent as it lifted rural and commercial lending faster than its traditional sector in household mortgages.

Net profit rose to $53.1 million in the 12 months ended March 31, from $47.8 million a year earlier, the Taranaki-based bank says in a statement. Net interest income rose 3.8 percent to $107 million, while charges on impaired assets fell to $2.1 million from $3.4 million a year earlier.

The annual profit "is a result that we're proud of given the environmental and competitive challenges that continue to put pressure on the margin", chief executive Kevin Murphy says. "TSB Bank continues to foster a very loyal customer base, which is why we've seen steady growth in a relatively flat credit sector."

The bank's residential loan book rose to $2.49 billion as at March 31 from $2.45 billion a year earlier, though it shrank as a proportion of total loans to 87 percent from 89 percent.

Total lending increased to $2.86 billion from $2.74 billion with a 38 percent gain in rural lending and a 24 percent lift in commercial lending, it says.

The bank's shareholder TSB Community Trust pulled out a dividend of $11 million in the year, up from $10 million in 2012.

TSB did not provide a breakdown of its high loan-to-value ratio home loans in the annual result, though about 20 percent of its on balance sheet exposures had an LVR above 80 percent as at December 31.

Deposits grew 4.9 percent to $4.94 billion as at March 31 from a year earlier.

TSB acknowledged the 26 percent stake it acquired in Fisher Funds in April as part of the fund manager's $79 million acquisition of Tower Investments, without disclosing how much it paid for the investment.


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