Reserve Bank deputy governor Grant Spencer continued to warn in a speech that lifting loan-value-ratios (LVRs) was the most likely way to cool an overheated market. The most accepted ratio was requiring home buyers to have at least a 20% deposit.
Mr Smith said in an interview the Invercargill-based bank tended to have a maximum lending level of 80% of value, meaning the 20% deposit was already a minimum, in most cases.
''The Reserve Bank has been predicting these measures for some time. It is not surprising it is still talking about lending restrictions.''
Canterbury Earthquake Recovery Minister Gerry Brownlee yesterday announced that home repairs in the greater Christchurch area had reached half-way, 40,000 homes having been repaired. That left EQC with around 40,000 houses to go.
Mr Smith said Christchurch was still a hard market in which to operate as a lender and the housing rebuilding programme continued to be hamstrung by insurance issues.
''Until they get that resolved, we won't see a clear path ahead,'' he said.
Christchurch continued to be a dominant theme for SBS and the bank would continue to support the region.
''The Canterbury market is becoming highly competitive and we have reaffirmed our commitment to helping the city and its people rebuild.''
SBS had handed out more than $150,000 to community groups and appointed Alec Neill as a Christchurch-based director, Mr Smith said.
Mr Brownlee said around 1800 full home repairs were being completed each month. The programme was in ''full swing'', with 1300 contracting firms accredited, employing around 5000 tradesmen.
A major risk for Christchurch was that confidence in the region's housing stock would fall in the wake of earthquakes.
''Instead, we've instilled confidence [and] housing values have been maintained.''
Solid return for SBS in tough year
SBS Bank had survived a tough year to report a solid operating profit of $20.9 million for the year ended March, chief executive Ross Smith said yesterday.
The 2013 profit was 18% higher than the previous corresponding period and the highest profit since at least 2009. Total operating income for the period was up at $91.5 million and the profit after tax was $14.34 million.
Total assets at balance date were $2.83 billion from $2.84 billion last year. Net operating cash flow in the period was $191,395.
Despite the tough year, the increase in operating profit, growth in capital and liquidity and winning the Financial Institution of the Year award had all been highlights, he said.
''An ongoing focus on the needs of our members has allowed SBS to again report a solid profit against a difficult global and domestic economic background.''
Mr Smith warned that uncertainty within the global economy was not yet over and some financial upheaval was still likely.
Negative news out of China would not help the overall market in New Zealand and lending would remain a challenge.
Demand for lending outside of the Auckland region had been subdued in the past year. In coming months, SBS planned a controlled expansion into the Auckland housing market to take advantage of those growth opportunities in New Zealand's largest market.
''It is the easiest reaction to run to where the market is but we realise we have to be extra careful. We don't have a history in Auckland and we will be more vulnerable than most. We will be careful,'' Mr Smith said.
The year ahead was likely to provide conditions similar to the past financial year for SBS, he said.
