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TSB's mortgage book grows but profitability flat

TSB Bank grew its mortgage book in the March quarter although its underlying net profit was virtually flat in what the bank describes as a “challenging” environment.

Tuesday, May 31st 2011, 5:00AM

TSB's March quarter disclosure statement and annual report shows its mortgage book grew $46.3 million to $2.36 billion in the quarter and by $180.2 million in the year ended March.

Its net profit for the quarter grew by 6% to $10.2 million, although that mostly reflected a lower tax charge due to the corporate tax rate falling to 28% and the removal of depreciation on buildings. Profit for the year was down 22.1% to $39.8 million, mostly because of a sharp drop in derivative financial interest income.

Excluding the latter, net interest income rose 1.2% to $21.6 million in the quarter and was down 3% to $86.2 million for the year.

Charges against profit for bad loans jumped in the quarter to $1.5 million from $0.9 million although they dropped to $3.3 million for the year from $4.5 million the previous year.

The annual report says the bank's deposits grew by $418 million in the year with $45 million of that coming from domestic wholesale funding.

"As a prudent measure and as a means of diversification, the bank has entered the wholesale market for the first time in a number of years," it says.

Total loan approvals fell 15% to $600 million, mainly due to less demand for credit, and net interest margin, excluding derivatives, fell to a record low of 1.88% which the bank attributes to "aggressive competition for funds."

TSB is one of the few banks whose different notes on its mortgages are all identical. However, it still hasn't adopted new reporting rules which require banks to include both on and off-balance sheet exposures in its loan-to-valuation table and only its on-balance sheet mortgage exposure is available.

Banks have until the September quarter this year to adopt the changes but TSB managing director Kevin Murphy says his bank will probably adopt the new rules in its June quarter statement.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 ▲3.15 ▲3.55 ▼3.75
ANZ Blueprint to Build 1.68 - - -
ANZ Special - ▲2.55 ▲2.95 ▼3.15
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.29 2.69 2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 ▲2.89 ▲3.29 ▲3.49
SBS Bank Special - ▲2.39 ▲2.79 ▲2.99
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.78 2.99 3.29

Last updated: 5 August 2021 9:02am

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