TSB Bank posts record profit

TSB Bank posts record profit in challenging market conditions

TSB Bank today announced a pre-tax profit of $74.3 million for the 12-month period ended 31 March 2010, an increase of $13.1 million on the same period last year and a 23rd successive year of profit growth.

Key Highlights

• Pre-tax Profit was $74.3 million, up 21% or $13.1 million on prior year, as a result of strong consumer confidence in the Bank which saw depositors’ funds for the year increase by $549 million to a milestone $4 billion.

• Loan portfolio increased by a record $279 million to $2.4 billion.

• At 15.90% the Bank’s Capital Adequacy Ratio remains the highest of all New Zealand retail banks, and is achieved through the Bank’s policy to build capital by retaining earnings and invest in only high quality low risk assets.

“While the majority of financial institutions in New Zealand continue to experience fallout from the global financial crisis, an increased national demand for our services saw most of our growth projections, including market share, depositors’ funds and home loan growth, exceeded over the past 12 months,” says TSB Bank CEO, Kevin Murphy.

“Delivering our 23rd year of record profit at this time is a reflection of the Bank’s ownership, funding and investment strategy, which has largely shielded us from the effects experienced by internationally owned banks.”

TSB Bank is 100 percent New Zealand-owned and all profits are retained in New Zealand. Funding is obtained solely through the deposit support of New Zealand customers, and the Bank continues to experience exceptional funds growth with depositors’ funds increasing by $549 million to a milestone $4 billion.

This growth, a 30 percent increase in 18-months, was achieved during a period of uncertainty in the international financial markets and collapse of the finance company sector in New Zealand, which led to increased consumer confidence in TSB Bank.

“The growth of TSB Bank’s national customer base is fundamental to the Bank’s continued success, and we are focused on providing our customers with more choice through the expansion and enhancement of our service delivery options,” says Mr Murphy.

Over the past 12 months TSB Bank has introduced an upgraded internet banking service and a new web-based banking service with further add-ons and improvements scheduled for roll-out over the coming months.

During the year the Bank also opened a new Service Centre in Christchurch. Since 2005, TSB Bank has added nine new offices to its national network. Further Service Centres will open throughout New Zealand over the next few years as part of the Bank’s expansion and growth strategy.

Along with its New Zealand ownership and national expansion, TSB Bank’s increase in market share can be attributed to its dedication to the customer experience. In 2010 TSB Bank retained its ‘best bank’ customer service rating in the Roy Morgan Consumer Banking Customer Satisfaction Report for a record tenth year.

“TSB Bank has been around for almost 160 years, and even though we’re now a national bank with branches and customers nationwide, we’re still committed to providing the same, high level of customer service that we’ve always been known for. That’s why up to 50 percent of our customers come to us on the recommendation of friends or family,” says Mr Murphy.
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