SBS declares $12m profit

New Zealand's newest registered bank SBS Bank yesterday announced a net profit of $12 million, down 16 per cent on last year because of an increase in provisions for bad debts and a loss on the revaluation of financial instruments.

The bank, known as Southland Building Society until its registration with the Reserve Bank in October last year, said an underlying operating surplus of $22 million was in line with last year's performance but the bottom line was squeezed by a $3.3 million increase in provisions and a $4.7 million increase in the loss on the revaluation of financial instruments related to the rapid fall of interest rates.

Chief executive Ross Smith, however, said the result was "particularly pleasing" and reflected the trust of its members and its conservatism "in the midst of an economic crisis that continued to challenge financial institutions and redefine banking".

Deposits as at March 30 were $251.47 million from $203.47 million a year earlier. Total assets rose 4.5 per cent to $2.54 billion and loans were up 3 per cent to $2.40 billion.