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TSB Bank profits up 11%

TSB Bank profits up 11%

(3 June 2013 – New Zealand) TSB Bank lifted its annual profit by 11 percent as it lifted rural and commercial lending faster than its traditional sector in household mortgages.

TSB’s net profit rose to NZ$53.1 million (A$44.2 million) in the year ended 31 March, up from NZ$47.8 million a year earlier.

The Taranaki-based bank said in a statement that net interest income rose 3.8 percent to NZ$107 million, while charges on impaired assets fell to NZ$2.1 million from NZ$3.4 million a year earlier.

The annual profit 'is a result that we're proud of given the environmental and competitive challenges that continue to put pressure on the margin,' chief executive Kevin Murphy said.

'TSB Bank continues to foster a very loyal customer base, which is why we've seen steady growth in a relatively flat credit sector.'

The bank's residential loan book rose to NZ$2.49 billion as at 31 March from NZ$2.45 billion a year earlier, though it shrank as a proportion of total loans to 87 percent from 89 percent.

Total lending increased to NZ$2.86 billion from NZ$2.74 billion with a 38 percent gain in rural lending and a 24 percent lift in commercial lending, it said.

The bank's shareholder TSB Community Trust pulled out a dividend of NZ$11 million in the year, up from NZ$10 million in 2012.

TSB didn't provide a breakdown of its high loan-to-value ratio home loans in the annual result, though about 20 percent of its on balance sheet exposures had an LVR above 80 percent as at 31 December.

Deposits grew 4.9 percent to NZ$4.94 billion as at 31 March from a year earlier.

TSB acknowledged the 26 percent stake it acquired in Fisher Funds in April as part of the fund manager's NZ$79 million acquisition of Tower Investments, without disclosing how much it paid for the investment.

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