Southland-based SBS Bank Group has reported an operating surplus of $55.2 million for the year ending March 2021.
The surplus comes amid a year of economic turbulence and restructuring that resulted in 23 job cuts throughout the business and a phased exit from agribusiness.
Group chief executive Shaun Drylie said businesses had braced for house price slumps, interest rate drops and rising unemployment due to Covid-19 only to be surprised when the reverse happened.
The group reported an operating surplus of $21.3 million for the 2020 financial year, which was down 47.7 per cent from a $40.8m operating surplus in the 2019 financial year.
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Last year’s operating surplus came in low, because SBS Group was holding money back in anticipation of losses, Drylie said.
The business was able to draw from this safety net in the past financial year, which resulted in this years growth, he said.
The business has increased its investment in digital banking with new software and was teaching its older members to use telephone and Internet banking as the bank prepared for a cheque-free future.
The march towards digital services raised the potential risk of cyberattacks, not only for SBS, but all organisations, Drylie said.
As we become more digital, we want to make sure we’re secure, he said.
SBS Group was well-placed for how it anticipated the house market to shift, Drylie said.
He believed house price inflation would reduce in the coming months, and that New Zealand was unlikely to replicate the house price jumps experienced in the past year.
Housing supply will continue to grow, literally, he said, adding that the majority of buyers would likely be first-home buyers, rather than investors.
We do a good share of first-home buyer loans for our size, Drylie said.
SBS processed about 50 per cent of Kinga Ora loans, he said.
Drylie named the launch of a new reverse equity mortgage product, along with Canstar Awards and charity initiatives as highlights for the past year.
SBS Bank Chairman John Ward said the groups long-term focus on quality growth, meant it was well-positioned to face the challenges brought on by the Covid-19 pandemic.
Our profitability highlights SBS is in good heart and can continue to grow, innovate and further strengthen our capital reserves to ensure we provide significant future benefits for our members, he said.
Members Equity grew $58 million in the past financial year, or 17.3 per cent, on the previous year to $389 million.
Ward used the groups financial result announcement as an opportunity to announce he would be stepping down from the board in July after holding the position of chair since 2012.
I am proud of all that we have achieved together, and I am confident that the organisation will continue to thrive under the stewardship of my successor, Joe OConnell who has been a Director on the SBS Board since 2017, he said.
Drylie thanked Ward for his commitment and vision.
John is a Southland boy, and he has a very big heart for Southland and SBS. It’s been great to work alongside him.