TSB Bank has delivered a strong financial performance, reporting a net profit before tax of $63.3 million for the year ended 31 March 2026 – a 10% increase on the previous year.
The bank declared an $11.5 million dividend to its sole shareholder, Toi Foundation Holdings Limited, which serves as the commercial arm of the philanthropic Toi Foundation.
These results were reported on Friday 26 June during Toi Foundation’s public consultation for the proposed TSB & Heartland Bank merger, which is due to close on Tuesday 30 June at 5pm.
According to the reports, improved performance across the 12-month period was driven by steady growth in net interest income, disciplined cost management and ongoing structural simplification.
A shifting interest rate environment lifted the bank's net interest margin by 20 basis points to 2.26%, while its return on equity rose to 5.7%.
Operational shifts saw 98% of all customer transactions move to digital channels over the year.
TSB also directed significant funding toward security infrastructure, successfully recovering more than $2 million for customers targeted by fraudulent activity and scams.
TSB Chair Mark Darrow stated that the financial results highlight a clear emphasis on establishing a resilient foundation for future operations. "We've delivered a resilient financial performance in what remains a challenging and uncertain environment," Darrow said.
He noted that the bank continues to progress toward its goal of combining digital efficiency with personal service.
Chief Executive Officer Kerry Boielle attributed the successful year to the dedication of the bank's personnel and a commitment to regional commercial growth.
Boielle said the year was defined by disciplined execution, specifically pointing to expanded support for small and medium-sized businesses across New Zealand.
The bank also maintained its prominent local sponsorships, including funding for Stadium Taranaki and the annual TSB Festival of Lights in New Plymouth.
The proposed $620 million merger with Heartland Group Holdings is structured at a clear discount to the full value of the bank, representing 76% of TSB's book value.
Under the conditional agreement, Toi Foundation will receive a $50 million pre-completion cash dividend from TSB.
The remainder of the transaction comprises $250 million in ordinary Heartland equity, granting the foundation a 17.5% shareholding in Heartland Group, alongside $56 million in subordinated debt and a $264 million vendor loan provided by Toi Foundation to Heartland.
Mark Darrow noted that the TSB Board supports the Heartland merger proposal because it helps overcome the systemic hurdles smaller regional banks face.
He explained that operating independently makes it difficult to compete at scale, invest in modern technology and respond to increasing regulatory requirements.
In December 2025, the Reserve Bank of New Zealand overhauled its regulatory framework by easing capital requirements and adjusting risk weights.
Designed to help smaller lenders like TSB compete against dominant Australian-owned trading banks, the phased rollout begins in October 2026.
Whatever the final decision of the community consultation, Kerry Boielle stated that the bank remains focused on day-to-day delivery.
She emphasised that TSB has a proud 175-year history of serving its customers and communities, and the immediate focus remains on doing the right thing for clients and supporting bank staff.
