The SBS Story

As a New Zealand owned mutual building society, SBS is owned by its members - and intends to stay that way.

Because we have no shareholders, our members are central to everything that we do. Our members are represented by a Board of Directors who govern our operation. And because we don't have to pay dividends, our primary obligation is to share the results of our success with our members.

It is sometimes thought that mutuality is an old fashioned, outdated concept. Yet SBS has enjoyed record growth in recent years as more and more people recognise that it pays to belong.

It's an easy thing to say but how can we illustrate this?

One way of demonstrating this is to look at the net interest margin. This is a useful measure showing how much net interest SBS is earning from its interest earning assets (i.e. mortgages). Some banks have higher net interest rate margins than others. In practical terms a low interest margin generally means that the bank is able to operate lower mortgages interest rates compared to higher interest rates on its term investments. For SBS, this means charging members less for their mortgages and giving members more return for their term investments.

So is SBS lower than the rest?

The average net interest margin for SBS was 1.97% (2006/2007). The average net interest rate for registered banks was 2.35 (2005/2006)*. The difference between SBS and the main trading banks therefore is 0.38%.

*Source KPMG Financial Institutions Performance Survey 2006.

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