At the Community Trust of Mid & South Canterbury we often get asked how Community Trusts began. Remember Trust Bank? In 1988 Community Trusts were established to own each regional Trust Bank. On 30 September 1988 each Trust Bank Community Trust sold its shares in its bank to Trust Bank New Zealand Ltd in return for shares in Trust Bank New Zealand Ltd. Thus nine Community Trust shareholders owned Trust Bank New Zealand which in turn owned the nine regional Trust Banks.
For South Canterbury this meant that Trust Bank New Zealand Ltd owned all the shares in Trust Bank South Canterbury Ltd (TBSC). In return Trust Bank South Canterbury Community Trust owned a 2.7% share of Trust Bank New Zealand (2,700,000 ordinary shares). The profits of Trust Bank South Canterbury went to Trust Bank New Zealand which in turn paid a dividend. From the dividend the Community Trust provided grants and donations in the region. A clear separation of ownership and management was established; each Community Trust owned the bank in its region but had no direct influence over the running of the bank.
The inaugural meeting of Trust Bank South Canterbury Community Trust was held 27 June 1988. During the first year of the Community Trust’s establishment, the trustees’ main purpose was to ensure that the investment in Trust Bank South Canterbury Ltd would result in long-term benefit to the region in a changing financial environment. Funds in the Trust Fund as a result of South Canterbury Community Trust’s shareholding in Trust Bank New Zealand amounted to $4,689,000.
In April 1996 Trust Bank New Zealand was sold to Westpac. It was the proceeds from the sale of ‘our bank’ that provided more funds for distribution in the community. As Eddie Thompson, then chairman of the Trust, reported, ‘While the trustees had no option but to sell following the majority shareholders’ decision to do so, we are in no doubt that it was in the best interests of the community.’
By selling privately on the open market, South Canterbury Community Trust received $32,087,148.00 for its shares in Trust Bank New Zealand. Through the sale of the shares the annual funds available for distribution would be much higher. Instead of income being received from dividends, it was now from income on investments. With the severing of the ties with Trust Bank, the new name, The Community Trust of Mid and South Canterbury, was adopted.
Fast forward to 2022, The Trust now receives income from Dividends, Net Gains on Investments (realised), and Net Gain on Investments (unrealised). In the year ending 31 March 2022, Total Net Assets exceeded $60,000,000 for just the second time in the Trust’s history, $62,100,274 ($62,018,685 in 2021). The Trust made an overall operational surplus of $87,796 ($8,163,086) after approving grants of $2,513,119 and other operational expenditure. Chairman Nathan Mills says “A buffer of 15.33% is the effective surplus the Trust holds over the required goal of maintaining our Capital Fund on an inflation adjusted basis. I believe that places the Trust on a solid footing to meet the ongoing challenges our regions will encounter as the ‘after-effects’ of COVID19 remain with economic issues such as inflation pressures now coming down hard on our communities.”