SBS Bank profits, mortgage book grows

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SBS Bank's June quarter net profit jumped 53.1%, partly reflecting higher non-interest income such as a big jump in loan fees, and its mortgage book grew strongly.

Thursday, September 3rd 2009, 4:23PM

by Jenny Ruth

SBS' net profit jumped to $3.6 million for the three months compared with $2.4 million in the same quarter last year. The increase was despite a $3 million charge against profit for bad loans, up from a $1.4 million charge in the June quarter last year.

Net interest income grew only 3.5% to $15 million but non-interest income jumped 59.7% to $4.7 million.

SBS, which became a registered bank on October 7 last year, grew its mortgage book by $39.4 million in the quarter to $1.68 billion after growing it by only $12.9 million in the March quarter.

Using Reserve Bank figures as a proxy for the market, SBS accounted for 2.2% of all new mortgage lending by registered banks in the June quarter but its market share at June 30 was just 1.05%, up from 1.04% at March 31.

SBS's loan-to-value ratio (LVR) details show the proportion of mortgages with LVRs above 80% jumped to 23% of its total book from 16.6% at March 31 but the 100% government backed Welcome Home Loans account for 81% of loans with LVRs above 80%.

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