TSB's profit surges, mortgage book grows

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TSB Bank's December quarter net profit surged and its mortgage book continued to grow strongly.

Tuesday, March 2nd 2010, 9:23AM

by Jenny Ruth

TSB's December quarter general disclosure statement shows net profit in the three months rose 33.2% to $12.3 million, taking its nine-month profit to $41.6 million, up 23.6% on the same nine months a year earlier.

The quarterly increase was despite charges against profit for bad loans jumping to $1.26 million for the three months compared with just $110,000 in the previous December quarter, taking charges for the nine months to $2.55 million.

Net interest income grew 22.7% in the quarter and 19.7% in the three months.

TSB's mortgage book grew by $77.3 million to $2.12 billion in the quarter. Using the Reserve Bank's figures as a proxy for the mortgage market, TSB accounted for nearly 5% of new lending by registered banks in the quarter compared with its market share of just 1.31% at December 31.

About 15.7% of TSB's mortgage book, or $333.6 million, had loan-to-valuation ratios (LVRs) above 80% at December 31, up from 135% at September 30. Of those $158.1 million were government-backed Welcome Home Loans.

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