PSIS has posted a NZ$5.2 million, or 66%, jump in annual net profit, boosted by a near NZ$14 million rise in net interest income and a low level of loan losses.
The co-operative said today its profit after tax rose to NZ$13.1 million from NZ$7.9 million last year.
Net interest income jumped 38% to NZ$49.6 million, which chairman David Gascoigne attributed to favourable interest rate margins. Non-interest income rose NZ$1.1 million to NZ$18.4 million. Expenses rose 3.4% to NZ$51 million.
Gascoigne also attributed the big profit rise to a low level of loan losses which he said was due to prudent lending policies and effective credit risk management processes. Loan losses were NZ$3.2 million, or 0.29% or total loans. Total loans rose to NZ$1.12 billion from NZ$1.06 billion.
"Over the last year we've strengthened our balance sheet. Our deposits have lifted by 5%, our reserves have grown to NZ$117 million (from NZ$104 million), and our capital adequacy ratio, at 17.1%, is double the minimum regulatory capital requirement," said Gascoigne.
Chief executive Girol Karacaoglu said interest margins were expected to contract, although loan losses would continue to reduce.
"Overall we expect to have more normalised, yet sound, profit for the 2010/11 financial year," said Karacaoglu.