Christchurch provisions hit SBS Bank's March Qtr profit
The bank's annual report shows net profit for the three months ended March fell to $2.7 million from $4.9 million in the March quarter last year, taking annual net profit to $14.2 million, down 5.2% on the previous year.
SBS' charges against profit for bad loans jumped to $8.1 million from $5 million in the year-earlier quarter. "Though we have the comfort of knowing our lending is secured by first mortgage security, with replacement insurance a mandatory requirement, we have taken a precautionary $3.55 million provision against potential, but unknown, losses from the earthquake," the report says.
SBS's mortgage book eased $13.3 million to $1.81 billion in the three months and compared with $1.72 billion at March 31 last year. The bank says its total lending for the year grew $125 million but went backwards slightly after taking into account the $144 million in loans it acquired with the takeover of the Hastings Building Society.
The bank's loan-to-valuation (LVR) table shows 3.5% of its mortgages had LVRs between 80% and 90% and 17.3% had LVRs between 90% and 100% of which 80% were government-backed Welcome Home Loans.
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