The Southland-based SBS Bank has lifted its full year profit, as its margins increased from rising interest rates and increased lending.
SBS Bank's full year net profit rose 9 percent. Photo: Supplied / SBS Bank
Its net profit for the year ended March rose 9 percent to $44.9 million, lending was up 9 percent to $4.4 billion and its operating surplus was up 10 percent to $61.3m.
SBS Bank chief executive Mark McLean said first home lending made up more than a third of its total new home lending, and many were earmarked for Kāinga Ora related lending.
The bank is one of eight lenders participating in Kāinga Ora's First Home Loan scheme.
McLean said mortgage enquiries had not slowed even as the housing market cooled, but they were making sure borrowers could afford rising rates.
"Our test rate is just below 7 percent and we had been at those levels even when we were in a low interest rate environment. We have strong buffers built in to our interest rates to ensure that when we do lend money, our borrowers have the ability to repay that and continue to manage their day-to-day living expenses."
Going forward, SBS Bank expected softening property values, which meant first home buyers had more choice, McLean said.
He said the bank had been heavily focused on development and innovation through the year.
"We were excited to launch our SBS FirstHome Combo package in August 2021, combining product offerings from the whole SBS Group including a highly competitive first home buyer's home loan which is currently 3.49 percent," McLean said.
SBS Bank also announced a new 12 month term deposit rate of 4 percent, which the company said was the first time since 2015 that a term deposit rate hit 4 percent.
"Our strong result ensures we are able to pass on additional financial benefits to our members through market-leading interest rates and product innovation, which includes assisting our members through digital inclusion programmes to ensure all members feel more confident with accessing both our network of physical branches as well as our digital channels," McLean said.