24 June 2015
SBS Group has reported a record net surplus of $19.4 million for 2014-15 and is signalling a rebrand reinforcing its history and service as a key point of differentiation from other banks.
The Invercargill-based group’s net surplus represented a 24.3 per cent jump, while its record operating surplus of $26.1 million, was an 18.3 per cent increase on the previous year.
SBS Group chief executive Wayne Evans said during the year SBS had begun to provide members with tangible benefits including exclusive offers and preferential pricing.
Competitive interest rates and member exclusive promotions helped drive increased residential lending - including a push into Auckland. This was reflected in total lending advances of $2.39 billion, an increase of 5 per cent on the previous year, he said.
Growth had been widespread in terms of across the group and across the country, Evans said.
“It’s not just an Auckland story.”
This reinforced the success and return on investment SBS was making in its people and in marketing and technology. This in turn increased member confidence as the group added new services, he said.
While remaining tight-lipped on the rebrand, he said it would reinforce SBS’ history as a building society and its vision to be “New Zealand’s member bank” doing business “the friendly Southland style”.
These would be key points of differentiation from other banks in New Zealand, Evans said.
SBS would be looking at its mix of branches and other banking options in relation to its distribution of customers, he said.
The capital expenditure and other reinvestment planned during the next year could have an influence on the 2015-16 forecast result, Evans said.
“We expect the profit outlook to be more conservative.”
Evans said SBS had developed several responses to help rural customers through the dairy downturn. “We think it’ll last about two years.”
SBS was looking to increase commercial lending and was anticipating residential lending to continue to be firm in the next 12 months, Evans said.
Members’ equity was $239 million 4.2 per cent on 2014. Retail deposits were $2.52 billion, while capital adequacy was at 15.61 per cent up from 13.69 per cent in 2014, and well above the regulatory minimum of 8 per cent.
SBS Bank Chairman John Ward said the record results reflected strong performance across the SBS Group – including Funds Administration New Zealand (FANZ), Finance Now, Southsure, and SBS Bank – in what had been an extremely competitive market, especially in the residential lending sector.
SBS Group’s total assets now stood at $2.86 billion, up 2.7 per cent on 2014, reflecting expansion across the group.