By Gareth Vaughan
SBS Bank's September quarter profit tumbled 47% as the bank's provision for credit impairment more than doubled.
SBS's latest General Disclosure Statement shows its net surplus for the three months to September 30 fell NZ$2.532 million, or 47%, to NZ$2.829 million from NZ$5.361 million in the same period of last year. The bank, which is also a building society, recorded a NZ$2.807 million rise in its provision for credit impairment to NZ$4.997 million from NZ$2.190 million.
SBS took a NZ$3.55 million provision for credit impairment stemming from the devastating February 22 Christchurch earthquake in the March quarter with CEO Ross Smith saying this was likely to be more than enough. However, Tim Loan, SBS's general manager for finance, said the earthquake's impact on September provisioning was minimal, although the quake's aftermath was impacting lending growth significantly.
SBS's gross loans contracted by NZ$27.264 million to NZ$2.547 billion in the quarter.
Meanwhile, net interest income rose NZ$1.875 million, or 12%, to NZ$16.949 million. Total operating income rose NZ$1.519 million, or 8%, to NZ$21.290 million, outstripping a NZ$26,000, or just .2%, rise in operating expenses to NZ$12.694 million.
Total assets rose NZ$12.078 million to NZ$2.849 billion and total liabilities rose NZ$9.611 million to NZ$2.640 billion.
Net impaired assets fell to NZ$23.942 million at September 30 from NZ$25.662 million at March 31, but assets more than 90 days past due rose to NZ$8.920 million from NZ$7.906 million at June 30.
The bank's tier one capital ratio rose to 11.93% at September 30 from 11.51% at June 30 and its total capital ratio rose to 14.25% from 13.89%. The Reserve Bank mandated minimums are 4% and 8%, respectively.
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