CBS Canterbury, the former Canterbury Building Society, has reported a $1.91 million profit in the year to March 31 and is proposing a 1:40 bonus share issue in lieu of a final dividend.This month CBS, Southern Cross Building Society and Pyne Gould Corpor
CBS Canterbury, the former Canterbury Building Society, has reported a $1.91 million profit in the year to March 31 and is proposing a 1:40 bonus share issue in lieu of a final dividend.
This month CBS, Southern Cross Building Society and Pyne Gould Corporation said they had signed a memorandum of understanding to merge their banking-related activities to create a New Zealand-owned banking group.
CBS said that in light of those discussions it proposed a bonus share issue instead of a final dividend. The bonus issue was equivalent to 7.5c per share at a share price of $3.
"This will preserve shareholder net value overall and give those shareholders who choose to do so, the chance to liquidate some of their shares for cash," chairman Gary Leech said.
He said the after-tax profit of $1.91 million, while below desired levels long term, was still very positive given market conditions. Impairment losses were $590,000, down from $3.36 million last year.
Total lending rose 6.7% to $445.2 million, with growth predominantly in the residential lending area, especially new lending to first home buyers.
"The continued slow residential market and uncertainty with both residential and commercial investment properties have restricted potential lending growth. These two factors are also impacting on margins. We fully appreciate the need to move to diversify our revenue base," Mr Leech said.
CBS was comfortable with this level of liquidity due to a deposit rollover percentage of 89% and the extended Crown Retail Deposit Guarantee doing through to December 2011.
CBS was in the process of establishing a wholesale warehouse facility with its bankers as signalled earlier. This would provide a valuable diversification to funding sources.
Total assets reduced by 1.6% to $540.8 million.
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