TSB's net profit drops 33.7 per cent to $41.5m, as Covid-19 pandemic bites

Thursday, 30 July 2020

Covid-19 has had an impact on TSB’s bottom line, cutting its net profit by almost 34 per cent on last year.

TSB's net profit is down $21.1 million on the previous financial year, a result the bank's chief executive says is largely due to the coronavirus pandemic.

TSB's annual report, which was released on Thursday, shows the bank had a net profit of $41.5m for the year ending March 31, 2020, down from $62.6m for the 2019 financial year – a drop of 33.7 per cent.

In a statement, chief executive Donna Cooper said the result reflected the significant impact Covid-19 was having on New Zealanders.

After a strong first half of the financial year, TSB was tracking for an annual result in line with 2019, Cooper said.

But when Covid-19 hit and the country went into lockdown on March 25 the bank put aside $19.1m for potential future losses on lending, which had impacted the full year result.

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“Our operating environment has changed rapidly and significantly and has had a clear impact on the bank’s financial performance. Having said that, TSB’s funding and liquidity positions remain strong and our capital levels are well above those required of us by our regulator.

“This confirms that TSB is in a strong position to continue playing an important role in helping New Zealand through its recovery from the Covid-19 crisis.’’

Cooper said the bank had worked hard to support customers through the challenging time.

“As a result of Covid-19 we were forced to adapt quickly, and so were our customers. Now we’re determined to take what worked well for us through that time and use it to evolve, so we continue meeting our customers changing needs and expectations in this new operating environment.