TSB and SBS banks show divergent trends
Invercargill-based community-owned SBS Bank's mortgage book shrank $10 million to $1.8 billion in the three months ended June while Taranaki-based TSB Bank's book grew $28.4 million to $2.39 million.
SBS finance general manager Tim Loan says the major reason for his bank's mortgage book shrinking was the fact about 25% of its business is in Christchurch and its customers in that city are paying down their mortgages as they receive their payouts from the Earthquake Commission.
In another contrast, SBS's net interest income grew 13.4% to $16.3 million during the quarter while TSB's rose just 1% to $24.1 million.
TSB says most of its funding comes from retail deposits from its loyal customer base, rather than from the cheaper wholesale market, and competition in the deposits market is holding down margins.
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