By Gareth Vaughan
The Co-operative Bank, the country's newest bank, saw profit fall by a third in the December quarter as income fell and expenses rose.
Formerly PSIS, the Co-operative Bank obtained bank registration from the Reserve Bank last October. Its most recent General Disclosure Statement (GDS) shows profit after tax attributable to its members down NZ$814,000, or 33%, in the three months to December 31 to NZ$1.659 million.
The profit drop came with net interest income down NZ$220,000, or 2%, to NZ$10.364 million and net operating income down NZ$265,000, also 2%, to NZ$15.440 million. In contrast operating expenses rose NZ$378,000, or 3%, to NZ$13.546 million.
The Co-operative Bank's long-term CEO, Girol Karacaoglu, was replaced from February 24 by acting CEO Gareth Fleming. Fleming has stepped up from the role of general manager for marketing and products and is a former ANZ executive. Karacaoglu is leaving to become a deputy secretary at the Treasury. The bank’s chairman David Gascoigne is also leaving on April 1 and director Steven Fyfe, the former deputy CEO of ANZ New Zealand, will be the new Co-operative Bank's new chairman.
Loans and advances rose NZ$10.353 million over the December quarter to NZ$1.2 billion with total assets up NZ$5.641 million to NZ$1.459 billion. Deposits increased NZ$26.118 million to NZ$1.215 billion with total liabilities up NZ$3.991 million to NZ$1.331 billion.
Impairment losses on loans fell NZ$284,000, or 88%, to NZ$40,000. The bank's gross impaired assets increased NZ$788,000 to NZ$4.162 million as 90 day past due assets fell NZ$940,000 to NZ$1.351 million.
Members' reserves rose NZ$1.65 million from September 30 to NZ$127.365 million at December 31. The Co-operative Bank's tier one capital ratio rose to 17% at December 31 from 16.9% at September 30, and its total capital ratio was unchanged at 17.5%. The Reserve Bank mandated minimums are 4% and 8%, respectively.
The Co-operative Bank has a BBB- credit rating with a positive outlook from Standard & Poor's. A BBB- rating is S&P's lowest investment grade credit rating.
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