The Invercargill-based bank saw operating income rise from $67.7 million to $79 million, with after-tax profit up 38%, from $11 million a year ago to $15.2 million, for its nine months of trading to December.
SBS chief executive Wayne Evans said net interest profit margin gains were a key contributor to the profit increase, alongside continued strong performances by its subsidiary companies.
While the wholesale interest rate curve was benign at present, with interest rates between one to five years having little difference, Mr Evans said the mortgage market ''battle'' was being waged in the two-year terms.
''The wholesale interest rates have been in our favour, but that has buttoned off now.''
While having 230 staff based in Southland, SBS was expanding in Auckland with 70 staff in offices shared with its finance company, and including mobile mortgage managers.
SBS had invested heavily in its website, staff training and was beginning to use mortgage brokers.
The percentage growth rate in Auckland was greater than the South Island, Mr Evans noting that Auckland borrowers may have to spend three times the amount that Southlanders do on a house.
He said overall lending growth was another positive result, up 2.6% to $2.3 billion for the year to date, underpinned by $66.3 million in the December quarter.
''That was a result of the bank's increased presence in the North Island, particularly Auckland, competitive pricing and additional marketing activity,'' Mr Evans said.
SBS had invested heavily in increasing its Auckland presence and mobile and online capability, with those initiatives and strong quarterly growth now ''bearing fruit'', he said.
''The majority of our lending growth has been in the residential sector which is satisfying given the current hotly contested home loan market.''
Of the $2.35 billion on loans, $1.77 billion was to residential, $276.4 million to agricultural, $153.6 million to commercial and $150.6 million to consumers.
