Superbank reviewing its New Zealand business

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St Georges Bank says its earnings momentum is on track and that the bank is in good shape in Australia, but is reviwing its New Zealand operations - Superbank.

Wednesday, December 21st 2005, 3:08AM

Earlier this week when it announced a A$300 million share buyback, the bank also commented that its only soft spot is its New Zealand business, which it may exit, The Australian reports.

St Georges chief executive Gail Kelly said the New Zealand business was under review, prompted by its expectation that its "break-even point" would extend past 2006.

One of the issues dragging on the outlook is that the economic environmnet is "quite tough" and that there is "significant compression" on margins, particularly in home lending.

"Clearly, as a result of this economic environment, that break-even point extends a little and, as a consequence, you undertake a review," she said.

Kelly said the review would look at what "the best next step is for the venture", including an exit.

Superbank is a joint venture between St Georges and Foodstuffs. Its two main products are home loans and its SuperSaver online savings account.

Superbank lost $5 million in the last financial year and was tipped to break even in 2006.

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