TSB Bank reports a pleasing 10% growth in operating profit

MEDIA RELEASE

FRIDAY 1 JUNE 2012

TSB Bank reports a pleasing 10% growth in operating profit

TSB Bank today reported its results for the 12-month period ended 31 March 2012.

Key Highlights

• 10.29% increase in net profit before tax to $66.5 million, which was achieved while retaining the Bank’s low/no fee philosophy.

• Depositor funds increased by $273 million, or 6.15% to a record $4.7 billion.

• Loan portfolio increased by $114 million or 4.34% to $2.7 billion – a commendable result during a period where many customers are focused on deleveraging.

• The trend to floating rate loans continued this year with 52.71% of the portfolio on floating up from 44.59% in March 2011.

• The Bank’s Capital Adequacy Ratio, an industry measure of financial strength, remains the highest of all New Zealand retail banks at 15.42%.

TSB Bank CEO Kevin Murphy says, “Despite the challenging economic environment and a highly competitive market it is pleasing to be able to report that the Bank has again been able to deliver positive results for the year.

“Our net operating profit for the year of $66.5 million represents a 10.29% increase from the previous year. This positive financial result is a reflection of the prudent financial management regime that exists within TSB Bank, and was achieved without changing our low to no fee philosophy.”

A further indication of the Bank’s strength and performance was Standard and Poor’s maintaining TSB Bank’s current credit rating at a time when a number of financial institutions around the world continue to see their credit ratings under pressure.

Kevin Murphy says that with the changing regulatory landscape TSB Bank continues to focus on compliance and that the Bank is on track to meet the requirements of the Reserve Bank’s proposed changes to the Basel III regulations, and the implementation of the new Open Bank Resolution rules.

TSB Bank is proudly independent and 100% New Zealand-owned with all profits retained in New Zealand. Customer Deposits grew during the year by $273 million to a record $4.7 billion, reflecting the continued support for a New Zealand owned community bank.

This support, and the Bank’s dedication to the customer experience, was also reflected in recent Nielsen Company Consumer Finance Monitor research which found that over 60% of TSB Bank customers would recommend the bank to family and friends, and further reinforced by the Bank’s receipt of the Sunday Star-Times – Cannex Banking Awards, People’s Choice Award for Best Bank – judged on service, value and product.

Kevin Murphy says the Bank continued to see an upward trend for floating rate loans over the past year with over half the portfolio now on floating loans.

“We continue to see growth in our loan book, which is commendable during a period when many customers are focused on debt repayment, making customer lending difficult.”

The year also saw TSB Bank invest human and capital resource in the development of a new mobile-based banking service. From May 2011, a small but committed group within the bank began work on delivering [my]bank – an interactive and customisable banking experience which successfully launched in April this year.

Kevin Murphy says that with banking becoming more technology driven TSB Bank wanted to ensure it was at the leading edge of mobile banking applications.

“The business of banking is becoming more technology-centred with the likes of internet and mobile phone banking options and we remain committed to deliver a customer experience like no other.

“The way customers choose to interact with their bank is rapidly changing. With [my]bank and a presence on Facebook and Twitter, the bank is responding to customers who are increasingly looking for immediacy and convenience to satisfy their banking needs.

“A sincere thank you to our customers for the enduring support and loyalty they show us, and to our staff for being committed and engaged to provide the best customer experience.”

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