Profit up 8% to $17.4M

Press, 24 May 1988, Page 23

Profit up 8% to $17.4M

Trust Bank Canterbury lifted its net after-tax profit before extraordinary items 8.2 per cent to $17,431,000 in the year ended March 31, from $16,110,000 the previous year. Extraordinaries in the latest year totalled $5,912,000 (previous year, none), comprising $3,765,000 from the reduction in the taxation provision because of the fall in company tax; $589,000 on the sale of Trusteebank Computer shares, and $1,558,000 on the sale of land and buildings.

When these are included in the net, aftertax result, there was a lift of 44.8% on the previous year. ’ Net income before tax was up 5.4% at $33,306,000 (from $31,595,000) - with income from operations up 17.2% at $169,246,000 (previous: $144,393,000). Income from Government and local authorities investments fell 33% to $22,047,000, reflecting a 12% fall in these investments at balance date compared with a year earlier.

income from mortgage, personal, and term loans rose 29% to $11,668,000 ($86,541,000). Income from other investments (chiefly Trustee Bank Holdings and Trusteebank Computer) was up 53% at $26,275,000. Rents, commissions, and fees lifted 20% to $9,256,000. At balance date, loans and advances totalled $625,541,000, which is 13.7% up on the previous March 31, and fixed assets were 16.7% up at $47,512,000. Total assets rose 12% to $908,684,000. Depositors’ balances were 8.8% up at $876,130,000. Retained earnings were up 181% at $34,880,000, and the property revaluation reserve was up 31% at $21,355,000, boosted by $5,717,000 of revaluation during the year. In releasing the bank’s annual report at the annual general meeting yesterday, the general manager, Mr Frank Dickson, said the bank had a successful year at a time of major change in the banking industry. Grants to the community for the, year amount to a record $850,000, compared with $500,000 the previous year. The bank has granted more than $4 million in its 25 years. ’

In March and April, the bank approved housing loans totalled SI7M and SISM respectively. Fourteen per cent were applications made to refinance mortgages with other lenders.

The bank’s president, Mr Mark Holdsworth said the solid position of the bank was illustrated by a new standard, being considered by the Bank for International Settlements. The world standard would apply to banks undertaking international business.

“Many countries are expected to follow the proposal, which uses a risk-weighted formula for measuring the capital adequacy of individual banks.

“The ratio being sought under this measurement is 8 per cent. In anticipation of its use ihany large international banks are now searching for quality assets to strengthen their position,” said Mr Holdsworth. "At March 31, Trust Bank Canterbury’s measurement on this scale was already an excellent 9.9%.’’

Another measurement of importance, said Mr Holdsworth, was the bank’s reserves to assets ratio at the same date, of 5.8%. "This compares with the average of the four trading banks at less than 5.4%.’’ . ■