Company Updates
Here's what we've been up to lately:
- 15 July 2010 – Media release:
PSIS obtains "Positive" rating outlook
Co-operative banking provider PSIS today announced that Standard & Poor's had revised its credit rating outlook from "stable" to "positive". At the same time, Standard & Poor's affirmed the ratings on PSIS at BB+/B.
"The positive rating outlook reflects our expectations that the ratings could be raised to 'BBB-/A-3' if the company continues to successfully manage its low risk and sound credit profile through to 2011," Standard & Poor's credit analyst Peter Sikora said.
Standard & Poor's said that "The rating affirmation reflects PSIS's strong member support and its sound financial profile through the recent very difficult operating environment in New Zealand, particularly for nonbank deposit-takers. PSIS's ongoing commitment to maintaining a low credit risk profile by focusing lending activities on low-risk residential mortgage lending has underpinned its solid financial profile."
PSIS Chief Executive Dr Girol Karacaoglu said, "We are obviously delighted with this outcome and we attribute the result to our prudent management practices, our co-operative status and the fact that we've always remained true to our values."
Dr Karacaoglu added: "We are aspiring to increase our credit rating and this is a very positive move towards realizing that aspiration."
Standard & Poor's is an international company that specialises in financial market intelligence, including independent credit ratings, risk evaluations, investment research and data.
A Standard & Poor's rating is an opinion of the probability of default. Based on Standard & Poor's historical default studies, a BB+ rating indicates that over a 12 month period, there is a 99% probability that entities rated BB+, including PSIS, will meet all their obligations in full and on time.
For more information regarding PSIS's credit rating please click here.
- 16 June 2010 – CEO update:
PSIS reports a $16.6m record pre-tax profit
It's been a turbulent year for many financial institutions across the globe. PSIS has been fortunate enough to weather the storm well and our co-operative values have held us in good stead.
Our 2009/10 annual performance isn't only well above forecast but it also reflects a record profit for PSIS, with our pre-tax profit being $16.6 million.
This result is largely due to interest rate margins being favourable, but in part can also be attributed to our conservative lending policies and prudent management, which have resulted in our loan losses being much lower than those experienced by some other banks and financial institutions.
Our strong earnings have strengthened our already healthy capital position and provide a firm base for future growth.
As a co-operative our earnings from operations are only one metric on our organisational report card. We also aim to sustain high levels of member loyalty and employee engagement. I'm pleased to note that our commitment to remaining true to our co-operative values in our service offerings and the way we relate to our members has seen member satisfaction increase from 73 percent to 80 percent over the last year.
For the first time we can also report that in an international measurement of customer loyalty (the NetPromoter Score) PSIS received a positive score of 64, which is one of the highest scores in the Southern Hemisphere. Nothing is more important to the way we do business than remaining true to our co-operative values and looking after our members. As a co-operative, we're driven by a genuine desire to help our members get ahead financially.
Our focus in 2010/11
A key focus for the next year will be to explore ways in which we can give better effect to member ownership.
As the owners of PSIS, our members currently benefit through access to competitive interest rates, low fees, and accessible fee exemptions. The more business you, our members, do with us, the more value you gain from these benefits.
The opportunity for us, as we look ahead, is to find new and exciting ways to provide further tangible benefits to members, to better involve our members in the democratic process and decision-making at PSIS, and increase our understanding of your financial requirements so that we deliver products and services to better meet your needs.
The current retail Crown Deposit Guarantee Scheme (CDGS) is scheduled to expire in October 2010. We haven't yet decided whether we'll join the extended CDGS, but we're likely to follow the lead of the major banks. Regardless of which decision is made, PSIS is well positioned for the future.
Financial forecast
Going forward, it's predicted that interest margins will contract. However, while we anticipate the economic recovery will be slow, we're anticipating our loan losses will continue to reduce. We're expecting a more normalised, yet sound, profit for the 2010/11 financial year.
We'll continue to invest in our operations to ensure we enhance the experience we deliver to you as members, and to ensure we meet your needs in the best way possible. We feel confident that we'll continue operating from a position of strength so that we all prosper together.
Our People
We've done well in 2009 by not only remaining true to our co-operative values, but also by working as a collaborative team in a challenging economic environment.
It's our employees, with their continued energy and dedication to you, our members, who make our successes happen.
- 16 June 2010 – Media release:PSIS reports a record end-of-year result
Despite a challenging economic environment across the globe, PSIS chair Sir David Gascoigne announced today that PSIS has had a record year with its 2009/2010 annual performance well above forecast, delivering a profit of $16.6 million before tax. Read more...
PSIS reports a record end-of-year result
Despite a challenging economic environment across the globe, PSIS chair Sir David Gascoigne announced today that PSIS has had a record year with its 2009/2010 annual performance well above forecast, delivering a profit of $16.6 million before tax.
Sir David said that the level of the profit does need to be put into a context as it is primarily due to a combination of favourable interest rate margins, and low loan losses.
"The low loan losses are due to prudent lending policies and effective credit risk management processes. These processes have helped us to proactively identify members at risk of going into arrears and we've worked with them to try and get them back on track. As a result our loan losses at $3.2 million (0.29% of total loans), are considerably lower than the wider industry."
"Over the last year we've strengthened our balance sheet, with our deposits up 5%, our reserves have grown to $117 million, and our capital adequacy ratio, at 17.1% is double the minimum regulatory capital requirement," he said.
"In addition to the functional areas of strong performance, much of our success can be attributed to our New Zealand ownership, co-operative structure and the values and purpose that are inherent in co-operatives like ours. It's interesting to note that the same seems to have held true for co-operatives and mutuals across the globe, which have weathered the economic crisis relatively well," Sir David said.
PSIS chief executive, Dr Girol Karacaoglu said the strong earnings have strengthened our already healthy capital position and provide us with a firm base for future growth.
"Going forward it's predicted that interest margins will contract. However, while we anticipate the economic recovery will be slow, we're expecting our loan losses will continue to reduce. Overall we expect to have a more normalised, yet sound, profit for the 2010/2011 financial year."
Dr Karacaoglu said, as a co-operative our earnings from operations are only one metric on our organisational report card.
"We also aim to sustain high levels of member loyalty and employee engagement. I'm pleased to note that as a result of our commitment to remaining true to our values, our service offering and the way we relate to our members, members' satisfaction has increased from 73 percent to 80 percent over the past year. Positive results from our employee satisfaction survey also show PSIS is a great place to work."
PSIS also notes that its awareness measures are going up sharply as more people realise that anyone can bank with PSIS, and how this is special.
"As a co-operative we're 100% owned by our members, we exist solely for their benefit, and their best interests are our number one priority. We're proud of our co-operative status, it's our key differentiator," Dr Karacaoglu said.
"Our members already benefit from lower home loan rates, higher deposit rates and great fee exemptions, but with this result we'll be focusing on giving greater effect to our members' ownership over the coming months. We'll explore new ways in which we can provide further tangible benefits to members and involve them more in the decision-making at PSIS." Dr Karacaoglu said.
Key end-of-year results for 31 March 2009 were:
Profit before Tax: $16.6 million Profit after Tax: $13.1 million Total assets: $1,395.5 million Retail Deposits: Up 5% to $1,117.5 million Loans: $1,122.3 million Total Reserves: $116.9 million Capital Adequacy Ratio (using the Reserve Bank formula): 17.1%, well above the 8% minimum required for registered banks. To view PSIS's 2010 Annual Report please click here.
- 7 September 2009 – Media release:
PSIS branches give back to local communities
PSIS chief executive, Dr Girol Karacaoglu, today announced a nationwide PSIS initiative, whereby each branch will be supporting a worthy cause in their local area. Each branch will be donating funds to their local cause. The amount of funds donated in each local area will reflect the business local customers do with the branch.
Dr Karacaoglu said the local communities initiative was very aligned with PSIS values.
"We consider ourselves a truly 'local' organisation. Our local branch connections, local branch empowerment and participation in the communities in which we operate, is a key reason why many of our customers say they bank with PSIS. This initiative is just another way that we'll be expressing our commitment to our local communities."
The initiative is running through to the end of November. Many branches will be doing extra activities, such as fundraising and working bees.
"Each branch has gone through a process of agreeing on a worthy cause in their region. For example, our Wellington region branches have all pulled together and are supporting the Wellington Free Ambulance.
This initiative will be the beginning of some great ongoing partnerships with places that really rely on community support. Our branches are really enthusiastic and keen to embrace this," said Dr Karacaoglu.
- 17 June 2009 – CEO update:
PSIS posts a $10.7m pre-tax profit
During the past financial year, financial markets globally have experienced a great deal of volatility. It's been a challenging year for most organisations and people worldwide.
PSIS, however, has weathered the turbulence well, and much of this I believe has been owing to our customer ownership, co-operative structure and the values and purpose that are inherent in co-operatives like ours.
We exist for the benefit of our customer/owners. We focus on the long-term, both in our relationships with our customer/owners and in the way we manage our business. We're profit-conscious, not profit driven.
All of this has held us in good stead. Our overall performance for the year 2008/09 has been stronger than anticipated with a $10.7m pre-tax profit being recorded, largely a result of the favourable performance of our treasury assets.
Our underlying profit was a little below expectations ($3.9m), because of the current market conditions impacting our lending volumes and associated insurances, and causing an increase in our loan losses.
Our loan losses, although rising a bit, are still low relative to the experience of major banks. We attribute this to our conservative lending policy and our increased focus on credit risk management. This latter emphasis has enabled us to be proactive in identifying customer/owners who are at risk of going into arrears. We've often worked with these customer/owners to help them get back on track financially.
The introduction of the Crown deposit guarantee scheme in October 2008 has had a positive influence on our deposit growth, with deposits up by 8% over the year. We continue to maintain a strong balance sheet with high levels of liquidity. At the end of March, our reserves were $104m.
We're particularly proud of the latest customer/owner satisfaction survey results, which show that over 91% of our customer/owners are likely to recommend us. Referrals are one of the greatest compliments we can receive and we're thrilled to know that so many of our customer/owners are happy to recommend us.
I believe, in these uncertain times, PSIS as a co-operative is more relevant than ever. One of our key goals for the year ahead is to continue to focus on what we do best – helping our customer/owners get ahead financially. With this goal in mind, as well as others, we're feeling very positive about the year ahead, whatever it may bring.
- 17 June 2009 – Media release:
PSIS reports a strong end-of-year financial result
PSIS deputy chair Colin Hicks said today that in spite of the local impacts of the international economic turmoil, PSIS has delivered a sound result. Our overall performance for the year 2008/09 is ahead of forecasts with a $10.7m pre-tax profit, largely a result of the favourable performance of our treasury assets.
Mr Hicks said: “During the past year, financial global markets have experienced a great deal of volatility, and it's been a challenging year for most organisations and people worldwide.”
“PSIS, however, has weathered the turbulence well, and much of this I believe has been down to our New Zealand ownership, co-operative structure and the values and purpose that are inherent in co-operatives like ours,” Mr Hicks said.
In 2008 PSIS marked 80 years of service to New Zealanders.
“We focus on the long-term both in terms of our relationship with our customer/members and in the way we manage our business. We are profit- conscious, not profit driven, because we exist for the benefit of our members. Members are both our customers and our owners. All of this has held us in good stead over the past year,” Mr Hicks said.
PSIS chief executive Dr Girol Karacaoglu said, “While our overall performance for the year was well ahead of forecast, our underlying profit was impacted by current market conditions specifically in the areas of our lending volumes and associated insurances, and a rise in our loan losses.”
Dr Karacaoglu commented that all key risk indicators (including loan losses and arrears) remained at reasonable levels and are favourable to industry benchmarks. Our capital adequacy at 14.6% is well above the 8% minimum required for registered banks.
“Our loan losses are still low relative to the experience of major banks, and we attribute this to our careful lending policy and our increased focus on credit risk management. This latter emphasis has enabled us to be proactive in identifying members who are at risk of going into arrears, and we often work with them to help them get back on track financially.
The introduction of the New Zealand Deposit Guarantee Scheme in October 2008 has had a positive influence on our deposit growth, with deposits up by 8% over the year. We continue to maintain a strong balance sheet with high levels of liquidity. At the end of March, our reserves were $104m.”
Dr Karacaoglu said, “The success of our efforts is not only measured by our balance sheet, but equally important are the results of our latest customer satisfaction survey which show that over 91% of our members are likely to recommend us. Referrals are one of the greatest compliments we can receive and we're grateful to know that so many of our customer/members are happy to recommend us.”
“We believe, in these uncertain times, PSIS as a co-operative is more relevant than ever. One of our key goals for the year ahead is to continue to focus on what we do best - helping our customer/owners get ahead financially. PSIS is well placed to weather the current economic climate, and we expect to continue to grow at a steady pace in the next year, and we go forward with a strong balance sheet and a strong sense of purpose,” Dr Karacaoglu said.
Key end-of-year results for 31 March 2009 were:
- Capital adequacy (using the Reserve Bank formula) of 14.6%, well above the 8% minimum required for registered banks
- Total assets up 6% to $1,327m
- Deposits up 8% to $1,067m
- Loans up 1% to $1,063m
- Pre-tax profit of $10.7m
- Underlying profit of $3.9m
- No single loan exceeds one-twelfth of one percent of total assets (or $1m)
- PSIS has no inter-related party lending outside of the PSIS Group
- 6 April 2009 – Media release:
Congratulations to...
Riccarton branch, who won Branch of the Year 2008/09, and Jacqui Molloy from Invercargill who was selected as Branch Manager of the Year.
Riccarton branch has excelled in various areas of the business and has maintained a consistent level of high performance.
Jacqui Molloy’s achievements over the year includes the development of great local marketing initiatives and consistently fulfilling our members’ needs. During this time she also built a strong team culture and is well respected by her team.
Congratulations also to:
- Joyce Gesta from Onehunga branch – this year’s winner of the Contribution of the Year award.
- Papanui branch – winner of the Relationship Branch of the Year award.
Congratulations to all our winners!
Joyce Gesta, Jacqui Molloy, Faye Foster & Mark Haycock
- 12 March 2009 - CEO update:
Our co-operative advantage in recessionary times
Although the global credit crunch has impacted a number of organisations worldwide, PSIS along with other New Zealand mutuals, such as building societies and credit unions, have been fortunate to have so far weathered the current crisis well.
So what is it about our co-operative structure and that of mutuals in general, that has helped insulate us from what’s happening globally?
I’ve come to conclude it’s the underlying values and purpose embedded in co-operatives like PSIS and other mutuals, that have held us in good stead. This is based on my own experience at PSIS over the past five years, and comparing this with my earlier experience with several investor-owned organisations, as well as observations and conversations with counterparts in other mutuals.
We exist for the benefit of our customers, who are also our owners.
Our primary focus is on serving the collective interests of our current and future customers, and their communities, and to help them get ahead financially. This is the main driver behind our focus on being prudent.
We focus on the long-term, both in our relationships with our customers and in the way we manage our business.
This is reflected in the way performance criteria are set for management by our Board. Unlike investor-owned companies, we’re not under ongoing pressure to produce exceptional profits, quarter after quarter – so we can take a longer-term view.
We are profit-conscious, not profit-driven.
To serve the long-term interests of our customers, we need to make sure that our business is sustainable, which means making a reasonable level of profits – for prudential reasons as well as to fund our investments. Since we’re under no pressure to chase excessive profits, we don’t take excessive risks.
I believe it’s probably these types of drivers that appear to permeate the wider co-operative and mutual sector that help explain why, in such difficult times, our types of organisations tend to do reasonably well.
It also explains why one of our common features is that we’ve been around, through thick and thin, for many decades – in PSIS’s case over 80 years.
Girol Karacaoglu
Chief Executive Officer
- 10 November 2008 – Media release:
PSIS approved for Deposit Guarantee Scheme
PSIS today announced it has received approval from the Treasury to opt-in to the Government’s new $150 billion Deposits Guarantee Scheme, which guarantees retail deposits in New Zealand for the next two years.
“PSIS is pleased to be approved for the scheme as it’s important that we continue to reassure customers about the security of their deposits during these times of financial uncertainty,” said PSIS chief executive Girol Karacaoglu.
“PSIS has a strong governance structure, conservative risk management practices, a low level of non-performing loans, and strong capital adequacy at 13% (under Basel II), which is well above the 8% minimum requirement of a registered bank,” he said.
Dr Michael Cullen, the Minister of Finance, announced the scheme on 12 October and at that time reiterated that there was no evidence of any New Zealand institutions being at risk but the introduction brought our policies in line with other countries, including Australia.
“Savings Institutions such as PSIS are even further protected from the international turmoil than most because we source our funding largely from domestic retail deposits and our lending is primarily first mortgage property lending over property in New Zealand. We are New Zealand owned and New Zealand funded,” Dr Karacaoglu said.
For further information on the Deposit Guarantee Scheme, visit the Question and Answer section on the Treasury’s website.
- 10 November 2008 – Company update:
CEO update
PSIS is a co-operative – and we’re proud of this fact.
As a co-operative financial services company, we have distinct values – our co-operative values – which is what makes us unique and differentiates us from the ‘big banks’ and other financial institutions.
We’re owned by our customers and we exist for their benefit - to help them get ahead financially. We try to give our customers fair value in all our products and services, aim to offer basic “no frills” banking and, through our 33 branches around the country, try to make a difference locally, for them and their families, in our customers’ own environments.
The NZ economy, as is the world economy, is going through difficult times – and quite a few of our customers are feeling it too. People are worried about the levels of food and petrol prices, high interest rates, their debt levels, and their employment and income prospects.
Our co-operative values place us in the perfect position to give people what they need right now - some breathing space. This is our time to shine - this is our time to make a real difference.
When people are facing tougher financial times, some will feel anxious and in need of some helpful suggestions. Others may feel OK but in need of reassurance that they’re doing the right thing with their money. Either way, they’ll want to feel more in control of their situation.
We want our customers to come to us when they have such concerns and we believe they will - because of the way we treat people. The way we treat people is a direct result of our co-operative values. Our values say we’ll never judge people, no matter who they are, or how much money they have. And that we always put our customers’ best interests first.
The way we treat customers, and the way we strive to help improve their financial situations, reflects our co-operative history and values.
We want to give customers some breathing space - because we think that’s exactly what people need right now. They need time, a willing ear, and some simple, practical suggestions to reduce the financial pressures they may be under.
They need what PSIS has always offered our customers – for over 80 years. And we are proud, prepared and willing to be there for our customers.
Girol Karacaoglu
Chief Executive Officer
- 20 August 2008 – Media release:
PSIS joins New Zealand Savings Institutions Association
PSIS has joined the New Zealand Savings Institutions Association, which was officially launched by the Minister of Finance, Hon Dr Michael Cullen on Tuesday August 19, 2008.
PSIS chief executive, Dr Girol Karacaoglu said PSIS is thrilled to belong to the New Zealand Savings Institutions Association.
"Financial institutions like PSIS play an important part in the lives of a number of everyday New Zealanders. I believe we have huge role to play in the near future".
The new association includes three of the largest building societies in the country and PSIS - all established to provide services to their membership. Together they have total assets of around $5 billion and represent 300,000 New Zealanders and their families.
Association members include: CBS Canterbury; Heretaunga Building Society; Nelson Building Society; PSIS; Southern Cross Building Society; and Southland Building Society.
Ross Smith, chair of the association, said “ the New Zealand Savings Institution Association will provide a hallmark of quality that reflects the long history of service each of its members has in heartland New Zealand. It will also be a vehicle for celebrating our shared history and collective values, disseminating messages, relationship-building and provide us with a stronger voice in the market.”
“Our members each have strong governance, ethical standards, liquidity, reserves and asset base, we source our funding largely from retail deposits, on terms generally ranging from call deposits to three-year term deposits, and our lending is primarily first mortgage property lending over property in New Zealand.
Personal (unsecured) lending is very limited. The members all have a diverse range of other funding options in place including: retail funding; committed and uncommitted bank lines and some have securitisation facilities.”
- 12 June 2008 - Media release:
2007/08 Operating Performance and Balance Sheet
PSIS chairman David Gascoigne announced an operating profit of $7.1 million today, in line with forecast. Mr Gascoigne said that PSIS has reserves exceeding $95 million and that the co-operative has maintained a strong balance sheet, as reflected by all key risk indicators - including loan losses and arrears – being well within PSIS' own prudent targets, and favourable to industry benchmarks. The capital adequacy ratio is at 14.8% and continues to be very strong, with the minimum required for bank registration being 8%.
PSIS chief executive Dr Girol Karacaoglu said, "In the 2007/08 financial year we have achieved an operating profit and operating cash flow in line with our financial plans, maintained a strong balance sheet, and enhanced liquidity through diversification of funding sources.
"We have a strong governance structure, conservative risk management practices, continuous reporting and monitoring programmes; and strong relationships with our customers, all of which position us for continued growth."
Global Market Volatility and PSIS' Treasury Assets
"Owing to the current volatility of, and lack of liquidity in, global markets some of our capital guaranteed investments ($38.5 million) have decreased in value. These investments make up only 3.1% of our total assets. The Board has made a decision that it was appropriate to value these investments as at 31 March 2008 at $24.1 million (i.e. the value of the capital guarantee in today's dollars). This assumes that we will receive no income until they mature in six years' time. As a consequence of this, we have reported an overall post-tax loss of $3.6 million for the year.
International Investments are Capital Guaranteed
"The greatest proportion of these investments, which mature in stages by 2014, are capital guaranteed on maturity by ABN AMRO (a AA- rated bank), which is owned by the Royal Bank of Scotland (a AA+ rated bank). The remaining portion is capital guaranteed by Barclay's Bank (also a AA+ rated bank). PSIS will receive its full investment of $38.5 million back when these investments mature. Meanwhile, we will be able to reflect in our profits, in each of the next six years, approximately one-sixth of the gap between the current book value of the investment ($24.1m) and the value guaranteed by ABN AMRO and Barclay's Bank in six years' time ($38.5m), being approximately $2.3m p.a."
Credit Rating from Standard & Poor's
A significant event in the past year was the co-operative's move to acquire a credit rating from Standard & Poor's.
"Until recently, only banks were required to have a credit rating as a precondition of bank registration. Recently, the Government indicated that by the year 2010 every financial institution will be required to have a credit rating," Dr Karacaoglu said.
"PSIS' Board thought this was a wise provision and we moved quickly to obtain our own credit rating. In December last year we were assigned a BB+ credit rating."
Standard & Poor's said the rating "reflects the company's very good asset quality, supported by a relatively low-risk lending profile in the New Zealand non-bank loans market, strong customer focus underpinned by a loyal customer base, and good capital adequacy on a risk-weighted basis."*
This rating was reaffirmed as recently as April this year.
A Standard & Poor's BB+ rating is an indication that over a 12-month period, there is a 99% probability that PSIS will meet all its obligations in full and on time. Standard & Poor's also assigned PSIS a rating outlook of "stable".
Key end-of-year results for 31 March, 2008 were:
- Capital adequacy (using the Reserve Bank formula) of 14.8%, well above the 8% minimum required for registered banks
- Total assets up 15.9% to $1,246m
- Deposits up 8.3% to $988m
- Loans up 14.1% to $1,056m
- No single loan exceeds one-twelfth of one percent of total assets (or $1m) and PSIS has no inter-related party lending outside of the PSIS Group.
PSIS Annual Results Summary 2007/08
Good operating profit and strong balance sheet- Our operating profit for the year was $7.1 million, in line with our financial plan.
- Our reserves exceeded $95 million.
- Our capital adequacy is at 14.8% (well above the minimum of 8% required for a bank).
- Our Total Assets were up 15.9% to $1,246 million.
- Deposits were up 8.3% to $988 million.
- Loans were up 14.1% to $1,056 million.
International investments capital guaranteed- This year we made a special provision for a one-off unrealised loss on some term. investments we have, consequently reporting an after-tax loss of $3.6 million.
- These capital guaranteed term investments ($38.5 million) represent just 3.1% of our total assets.
- Since they are capital guaranteed investments, we will get back our full investment of $38.5 million when the investments mature.
- A majority of the investments ($37.5 million of the $38.5 million) are guaranteed by a AA- rated bank (ABN AMRO).
- Until their maturity PSIS has to record the current market value of these investments.
- These values will move up and down with the changing market circumstances – increasing our overall profit when markets are strong and having a negative effect on profits when markets are weak (as they have been over the past twelve months).
- These investments may provide some return over the coming years, but as prudent managers, we have decided to assume that we will earn no income from them, and allowed in this financial year for a one-off unrealised loss for all the income until they mature.
Sound credit rating- In December 2007 PSIS was given a BB+ credit rating and a rating outlook of stable. This was reaffirmed in April 2008.
- Standard & Poor's says the rating "reflects the company's very good asset quality, supported by a relatively low-risk lending profile in the New Zealand non-bank loans market, strong customer focus underpinned by a loyal customer base, and good capital adequacy on a risk-weighted basis".*
- A Standard & Poor's rating is an opinion of the probability of default. Based on Standard & Poor's historical default studies, a BB+ rating indicates that over a 12-month period there is approximately a 99% probability that entities rated BB+ will meet all their obligations in full and on time.
PSIS is well placed in the current uncertain economic climate, with our strong governance structure, conservative risk management practices and strong customer relationships, for continued growth.
Girol KaracaogluChief Executive* This statement is an excerpt from the Standard & Poor's Ratings Report on PSIS. For a complete understanding of PSIS' rating, the full rating should be read.
Ratings are subject to change. For the latest ratings information please visit www.standardandpoors.co.nz Credit ratings issued by Ratings Services are solely statements of opinion and not statements of fact or recommendations to purchase, hold, or sell or make any other investment decisions.
- 20 March 2008 - Media release:
PSIS obtains Credit Rating.
Until recently, only banks were required to have a credit rating as a precondition of bank registration. Recently, the Government indicated that by the year 2010 every financial institution will be required to have a credit rating. We think this is a wise provision and PSIS has quickly moved to obtain a credit rating.
We have chosen Standard & Poor's as the agency to complete our credit rating. Standard & Poor's is an international company that specialises in financial market intelligence, including independent credit ratings, risk evaluations, investment research and data.
The company has assigned PSIS a BB+ credit rating.
Standard & Poor's said the rating "reflects the company's very good asset quality, supported by a relatively low-risk lending profile in the New Zealand non-bank loans market, strong customer focus underpinned by a loyal customer base, and good capital adequacy on a risk-weighted basis."
In the context of the New Zealand non-bank deposit taking sector, a BB+ is a sound rating.
A Standard & Poor's rating is an opinion of the probability of default. Based on Standard & Poor's historical default studies, a BB+ rating indicates that over a 12 month period, there is a 99% probability that entities rated BB+, including PSIS, will meet all their obligations in full and on time.
Standard & Poor's also assigned a rating outlook. This assesses the potential direction of a long-term credit rating over the medium term (typically six months to two years). In determining a rating outlook, consideration is given to any changes in the economic and/or fundamental business conditions.
PSIS has been assigned a "stable" outlook.
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PSIS is not a registered bank, but a very co-operative co-operative.
Interest rates are subject to change. All deposits are secured by First Ranking Stock and rank equally with all existing deposits with PSIS Limited. An Investment Statement and a current registered Prospectus are available from any PSIS branch or can be downloaded here. For all lending products, PSIS Limited lending and insurance criteria, and fees apply.
