SBS's Auckland move pays off

New Zealand's Invercargill-based SBS Bank has reported a 39 per cent increase in net profit and declared its launch into the hot Auckland market a success.

The former Southland Building Society reported a net profit of NZ$15.3 million for the nine months to December 31, up from NZ$11.0 million in the same period a year ago.

SBS, which is a mutual, said its net margin increased because of cheaper funding costs and the good performance of its consumer finance and insurance subsidiaries.

SBS grew lending by 2.6 per cent to NZ$2.3 billion in the first nine months, including NZ$66.3 million in the December quarter, due largely to SBS's increase in mortgage lending in Auckland.

"We have invested heavily in increasing our Auckland presence and our mobile and online capability," said SBS Group Chief Executive Wayne Evans.

"Our strong growth over the last quarter shows that these initiatives are bearing fruit," he said.