BNK loan book holds steady in 3Q24

BNK Banking Corporation (BNK) has revealed that its loan book of approximately $1.5 billion was relatively unchanged from 2Q24 to 3Q24.

Quarter to quarter, the lender’s loan book rose by $6 million, from $1.48 billion to $1.48 billion. On an annual basis, however, BNK’s loan book increased by 13 per cent, up from $1.31 billion in 3Q23.

According to BNK, 100 per cent of its loans were originated through the third-party channel.

BNK chief executive Allan Savins commented that the lender has maintained its “high-quality loan book during the quarter” that was bolstered by the acquisition of around $80 million of high-margin, floating-rate residential mortgages from the investment banking company Goldman Sachs.

BNK acquired the residential mortgages portfolio – which has a maximum loan balance of $2.94 million and a weighted average current loan-to-value ratio (LVR) of 57 per cent to a maximum LVR of 80 per cent – in late March this year.

The transaction resulted in BNK’s loan book increasing by 5.6 per cent to its current level of around $1.5 billion.

BNK performs the origination, underwriting, and servicing roles for Goldman Sachs.

Furthermore, BNK reported organic and inorganic higher margin lending settlements of $90 million along with the Goldman Sachs portfolio acquisition and an increase in organic higher margin settlements of 75 per cent on the previous quarter.

Savins further commented: “[W]e are pleased to announced that we have now exceeded our target of $100 million in high-margin lending for FY24, despite only being three quarters through the year.

“This marks our second consecutive year of achieving this target and demonstrates strong results from our continued focus on securing quality loans.”

The lender also reported a deposit-to-direct loan ratio of 119 per cent, which BNK stated was a reflection on its continued ability to raise deposits to fund growth.

“The reduction in total deposits, particularly Term Deposits, from [2Q24] reflects continuation of a sharpened focus on margin management,” Savins added.

“Our strategic shift towards more targeted and selective higher margin asset growth initiatives lessened the imperative for overall deposit expansion in the quarter.

“We will continue to focus on managing our cost of funds and operating expenses, while expanding steadily into the higher margin lending space, and we remain committed to our goal of sustainable cash profitability.”

[RELATED: BNK purchases $80m resi mortgage portfolio]