New Zealand-based SBS Bank, formerly the Southland Building Society, has reported Wednesday an operating surplus of $NZ19.4 million or $A15.67 million in the year leading to March 31, coming from the $NZ18.5 million or $A14.94 million surplus it posted last year.

The bank also revealed that its net surplus after tax reached $NZ15 million or $12.12 million in the same period, which is its best performance since 2007 as it announced that SBS Bank is hot on trail for possible merger with like-minded organisations.

Chief executive Ross Smith said that the good performance came amidst one of the most difficult economic periods of the organisation's 141 year-old history, adding that the bank's deposit grew by $NZ133 million or six percent, en route to $NZ2.26 billion, as a direct result of its good showing.

He attributed the increase to "the response from our customers and the wider market to our New Zealand-owned status and increased credibility as a young, customer-owned bank, coupled with our long history of providing a secure haven for investors."

Mr Smith said that the organisation's transition to the highly-regulated banking environment led to further benefits for SBS Bank as its liquidity considerably improved and its total assets shot up by $NZ87 million or $A70.27 million to $NZ2.63 billion or $A2.12 billion.

He said that the company's fund management and life insurance business delivered the bulk of the operating surplus, noting that its decision 10 years ago to diversify eventually brought the bank to its good standing now.

Reports from last month have identified Canterbury Building Society, Southern Cross Building Society and Pyne Gould Corp as the four entities that were considering possible merger to give birth to a New Zealand-owned banking group and SBS Bank gave indications that it could become part of the group in the near future.