Mortgage products also successful
Despite the impacts of the COVID-19 pandemic and lockdowns across New Zealand, SBS Group (SBS or SBS Bank) found its half-year results for the 2021-22 financial year (FY2021-22) pleasing, including the way it helped Kiwis enter the property market through its mortgage products.
SBS – which includes subsidiaries trading as Finance Now, FANZ, and SBS Insurance – reported a half-year operating profit of $32.5 million for FY2021-22, up 35.4% or $8.5 million on the same period last year. Additionally, its lending advances were up $93 million over the six months to $4.13 billion, and the total capital ratio was at 16.3% compared with 14.9% this time last year and 15.7% at the end of the 2020-21 financial year.
The bank's mortgage products were also successful during the first half of FY2021-22. Launched in August 2021, SBS's FirstHome Combo package has met red-hot demand in all regions despite the most recent loan-to-value ratio (LVR) restrictions. As a result, SBS plans to reinvest $7 million a year into the product to support first-home buyers (FHBs).
Commenting on the FirstHome Combo's success, SBS GM Member Experience Mark McLean said: “We've been delighted with the success of our FirstHome Combo in the market, and we can see that this complete SBS Group offering is really resonating with first-home buyers.
“We've been helping Kiwis get into their first home for over 152 years, so we really understand the challenges. We've seen the growth through a combination of both Kāinga Ora assisted loans, which require only a 5% deposit, as well as applications from new home buyers who don't meet the Kāinga Ora criteria and need a higher deposit. ”
Another successful mortgage product during the first half of the latest financial year was SBS's Reverse Equity Mortgage, which enables older Kiwis to release the equity in their home to generate additional funds that they may need for their retirement.
“Our SBS Unwind Reverse Equity Mortgage has been a real game-changer for many of our older members who aren't ready to leave the property they've worked so hard for but don't have the cash they need to enjoy their retirement. Our Reverse Equity Mortgage allows them to stay in the property and borrow against its value, so the property is really working for them,” McLean said.
SBS has been resilient since the previous financial year despite the pandemic and the lockdowns. For the 2020-21 financial year (FY2020-21), the bank reported a $55.2 million operating surplus for the year ended March 2021, up from $21.3 million for the year ended March 31, 2020. Its total capital ratio also increased from 13.8% to 15.7%.
During the same financial year, the SBS Bank won the Canstar Award for Most Satisfied Customers 2020, achieved a Canstar 5-star rating for “Outstanding Value” in the rewards $12k annual spend category for the SBS Visa Credit Card for the second consecutive year, and launched the SBS Pink Ribbon Visa charity credit card and a new reverse equity mortgage product.