Building society tightens lending policy

LBS, which joined the New Zealand Exchange's alternative market in November, said it had become concerned during the past year at some clients' willingness to commit themselves to high levels of debt.

"With the prospect of higher volatility in housing values we have adopted a conservative policy and unlike some of our competitors we have not been prepared to sacrifice our lending policies to obtain loans," chairman George Brown said.

LBS was continuing to increase its loan book with low risk loans to farming families but commercial loans were more difficult to analyse and LBS required land or buildings as security in addition to good income levels.

The building society is forecasting bigger profits in the 2005 financial year after one-off costs impacted on last year's bottom line.

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