In the March quarter, it rose a smidgeon to 1.306% from 1.304% at the end of December and 1.19% at the end of March last year, using Reserve Bank figures as a proxy for the market.
Although Bank of New Zealand was grabbing the headlines during the rate war, managing director Kevin Rimmington says for about a month over December/January TSB had the lowest mortgage rates in the mainstream market.
"We're all in the same market and we all have to compete. We're keen to grow the portfolio," he says.
But while margins are being squeezed, TSB managed a 16.6% return on shareholders' funds for the latest year and its return on average assets rose from 1.19% in the previous year to 1.27% this year compared with the international benchmark of 1%.
More than half TSB's home lending is now outside its home province and the bank is intending to open a Wellington service centre on the main shopping street, Lambton Quay. It has secured naming rights to the building it will be in which will become the TSB Bank Tower.
TSB already has a "home loan lounge" in Auckland and a franchised operation in Christchurch and provides telephone banking services nationally.
It doesn't deal with mortgage brokers much, and with none at all in Taranaki where it has its own branch network, because it wants to "own" its customers itself.
The bank's profit for the year ended March rose 20% to $27.97 million.
