SBS Bank highlights capital expenditure and simplification programmes as it posts record annual net surplus

SBS Bank is embarking on a capital expenditure programme to refresh its brand, technology and branch network.

The bank and building society is saying this as it posts a record annual net surplus of $19.4 million for the year to March 31, up 24.3% year-on-year. Total annual operating income rose 17.4% to $106.6 million, and annual operating expenses rose 17.3% to $68.3 million.

CEO Wayne Evans, who succeeded SBS' CEO of 22 years Ross Smith last August,  says a "member bank vision" will see SBS guided by the themes of simplicity, benefit and synergy.

"We will create a more responsive, nimble bank through the simplification of our products, services and processes. We will generate greater benefit, value, to our members with genuine and tangible reasons for banking with SBS," says Evans (pictured).

"We are embarking on a journey to transform SBS to enhance the value we generate for members. We are investing in a capital expenditure programme focussed on increasing and strengthening our capability through a brand, technology and branch network upgrade and refresh," Evans says.

SBS says lending grew 5% in the March year to $2.39 billion, and total assets increased 2.7% to $2.86 billion. In the March quarter SBS grew its home loan book by a net $30.9 million, or 1.75%, to $1.798 billion. The percentage growth was higher than the 1.63% March quarter growth recorded in the Reserve Bank's sector credit figures for housing loans.

Evans says the bank's "journey" aims to boost value for current members and attract and retain the next generation of members.

"To achieve this we have initiated a number of important streams of work. We will enhance the capability and engagement of our people, expand our range of channels, products and services, embrace mobile and digital capability and reinvigorate our brand," Evans says.

SBS doesn't disclose how many owner-members it has.

SBS has also stepped up the promotion of its full group of companies being SBS itself, Funds Administration New Zealand (FANZ), Finance Now and Southsure. 

"With subsidiaries in the consumer finance, wealth management and insurance sectors, there are significant opportunities to leverage synergies across the group. A strategic alliance between FANZ and Staples Rodway announced in early March 2015 to work together in the wealth management sector, leveraging each other's strengths, illustrates SBS Group's commitment to growth in all areas of the business," Evans says.

SBS says it paid $1 million in rebates to members during its March year, and highlights increased value provided to members through the likes of its 4.99% five-year home loan offer earlier this year, plus discounts and preferential pricing on personal loans, investments and insurance.

As of March 31 SBS had a Common Equity Tier 1 capital ratio of 13.73%, up from 13.26% a year earlier, and comfortably above the Reserve Bank mandated minimum of 7%.

Here's SBS' press release, and here's its annual report.  And there's a video interview with Evans from March here.