v2 Report - Additional Information Supplement
LBS Loan and Building Society (NS)
Press releases
| Loan and Building Society (NS) LBS
28 Aug, 2007, 08:44 LBS are pleased to be one of the 8 mortgage providers to Fundit |
|---|
| The general manager of Loan and
Building Society (LBS), John Moore, said Fundit offered a unique
opportunity for lenders and borrowers to clinch competitive
mortgage deals in a fast, efficient manner. "Why would you not use this method if you are a busy person wanting the best result?" he said. Mr Moore said Fundit would enable LBS to market its mortgage products to specific market segments and geographic areas, an important consideration for the Canterbury-based building society. "It also gives transparency and a level playing field for all parties to a transaction, without the doubt and uncertainty that can exist with intermediaries." LBS has nearly $140 million in the market on first mortgage lending, covering residential, farming and business sectors. For further information contact John Moore General Manager 027 2267769 |
Chairman's report
The Society has experienced a year of record earnings up by 19% to $1.2 million after tax, as well as outstanding asset growth of 22% to $180 million. Further financial details are given in the Accounts and highlights include:
Our Rangiora Branch, which opened in April 2006, has performed up to expectations.
The successful completion of our computer development projects with internet banking services widely used by our customers.
Talks on the proposed merger with CBS and the appointment of joint working committees and independent consultants. This will be subject to a detailed report at a later date.
Financial Results 2007 2006 Change
$million $million
Assets $ 180 $ 148 Up 21.8%
Advances $ 139 $ 132 Up 5.9%
Shareholders’ Funds $ 15.6 $ 14.9 Up 4.7%
Pre Tax Surplus $ 1.811 $ 1.550 Up 16.8%
After Tax Surplus $ 1.229 $ 1.032 Up 19.1%
Per ordinary share
Net tangible assets
Per Share $3.89 $3.71 Up 4.9%
Dividend 15.5 cents 15 cents Up 0.5 cents
Dividend
The Directors have declared a fully imputed final dividend of 8 cents per share, which will be paid on 29 June to coincide with the release of the Annual Report. This will give a fully imputed return to our shareholders for the year ended 2007 of 15.5 cents per share and represents an increase over the 2006 year of 0.5 cents (last year 15 cents fully imputed). We continue to adopt a conservative dividend policy, which remains in the vicinity of 50% of tax-paid earnings.
Deposits
The Society continues to attract investments from the public. Strong marketing initiatives undertaken during the year have resulted in continuing growth of our deposit base. We need to be extremely competitive to attract deposits and our new account types and commitment to high quality service in the past year has been extremely successful. It is also pleasing to note strong support for internet banking and eftpos cards and these have continued to attract further customers to our two branches. Our growth in deposit funds reflects customers’ recognition of a secure Society profile supporting their deposits.
Lending
The demand for lending slowed during the year. Our mortgage advances have grown from $132 million to $139 million for the year ended March 2007. The quality and nature of our mortgages is very high and in the present market new quality loans have been difficult to obtain at profitable margins.
Provision for Doubtful Debts
In accordance with our note last year the Directors have made no additional provision for doubtful debts in this year’s accounts. Under the new International Financial Reporting Standards we will be required to only include specifically identified doubtful debts rather than making a general provision. As a result of this in 2008 the provision for doubtful debts of $450,000 will be transferred to equity in the Society. At this time we have no loans that would need to be specifically provided for.6
Chairman’s Report
Outlook
The outlook in the New Zealand mortgage market continues to be challenging, with a high level of competition for quality mortgages. We continue to grow our business based on quality service and the provision of products that suit our customers, with a heavy concentration on Rangiora, Ashburton and Christchurch area for our mortgage book. We expect this to continue and are investigating the launch of additional products and services to provide an even better offering for new and existing customers.
The Board is committed to providing shareholders with strong long-term growth, together with competitive annual dividend returns. We see continued growth in the Rangiora area being a substantial contributor to future profits and we are continuing to evaluate otheropportunities as they arise. In this regard we have, over the past year, looked at several new opportunities to provide enhanced growth to shareholders and the proposed merger with CBS is our priority at this time.
On behalf of the Directors I wish to thank staff for their continued input into what is a very challenging market and without whom we would find it difficult to continue to attract customers. I also wish to thank my fellow Directors for their valuable input and contributions. In particular we extend our gratitude to our customers for their continuing and loyal support.
George Brown
Chairman of Directors
General Manager's Report
The opening of the Rangiora Branch on 1 April 2006 proved to be an historic day for the Society, with four new staff members employed to head up and run the branch. Both our Rangiora and Ashburton outlets offer the same services and products, so that customers enjoy the same friendly service no matter which branch they come into. This has enabled us to have a great year of growth resulting in a strong return for shareholders.
Brand
During the year we started our rebranding from “Loan Society” to the new and smarter logo, trading as LBS. This transition has been readily accepted by our customers. The decision to rebrand was prompted by confusion in the marketplace between “Loan Society”, “Loan and Building Society” and the New Zealand Stock Exchange listing “LBS”.
Following market research it was agreed that we would trade as LBS, Loan and Building Society, to address this confusion and ensure shareholders and customers become familiar with a distinctive brand. The logo was kept very similar to the old logo and updated slightly and our marketing material is being updated over time to the new logo.
Sponsorship
We continue to support the community and sports groups through sponsorships. Some of these are Zonta, Mayfield Lions Club, Rangiora Women’s Triathlon, Rangiora Golf Club, Rakaia Lions Club, Ashburton Golf Club, Southbrook Touch, and many others. The Society is happy to support these and other groups and we have received considerable support in return. In this context the Society cheerfully adopts the approach that “your support gets our support.”
It is great to see children and some parents using our yellow drink bottles and sports bags. The occasional branded golf ball appears in strange places around Canterbury golf courses as well.
Product Range
The finance industry is becoming more and more competitive, with new players entering. In this challenging environment we have striven to keep our product range up to date. We are continuing to upgrade our Internet Banking facilities, streamlining a number of our investment products and we are currently reviewing our lending product range. In the coming months we will launch a number of new lending products. We welcome feedback and ideas from customers and shareholders. If you think something can be improved, please let us know.
Staffing
The 2007 financial year was a big year for welcoming new staff to the team. In addition to our new Rangiora Branch team we also employed another staff member in Ashburton to support our IT. Since balance date we have employed a new lending consultant to cope with the growth in business. The Society now employs 20 staff.8
General Manager’s Report
Computer
Development of our computer system is a continuing process. We now have Eftpos, ATM Cards and Internet Banking available to our client base and we are continuing to explore further opportunities, using technology to make our banking applications as simple as possible for customers.
The Future
The 2008 financial year will have some big challenges ahead, with possible changes in the financial sector as foreshadowed by the Ministry of Economic Development (MED) Review of Financial Products and Providers. We all await the final outcome, as this report is expected to have a significant impact on the finance industry in New Zealand. With this in mind, the Society is continuing to make sure it holds a strong position financially and structurally, while avoiding putting undue pressure on interest rate margins and operating costs.
John Moore
General Manager
