Not counting the YCU loans, the Queensland-based lender’s underlying loan book grew by 8.9 per cent, rising from $2.3 billion in FY14/15 to $2.5 billion as at 30 June 2016.
The bank noted that while growth in Auswide Bank’s traditional central and north Queensland markets “retreated” (with far north Queensland making up just 5.5 per cent of loan book distribution, and central Queensland dropping from 42.6 per cent in 2014-15 to 36.6 per cent in the 2016 financial year), strong growth was reported in the south-east Queensland region, which now makes up more than one-third of the loan book (36.9 per cent).
Home loan approvals also rose in the last financial year, increasing by 31.7 per cent on the $449 million in approvals for the 2014-15 financial period. According to the company, this growth was balanced between first-party and third-party channels, with its broker and mortgage alliance platform contributing approximately 60 per cent of loan originations in the period.
Further, the company noted that its investments in technology, such as its new automated loan origination system that uses automated valuation request and fulfilment, credit policy assessment and exception management, customer identification and AML screening, “has resulted in substantial processing efficiencies and faster loan application processing for customers and brokers”.
“This investment is expected to provide further cost efficiencies in 2016-17 as new procedures are implemented,” Auswide added.
The bank also entered into a strategic relationship and equity investment with licenced peer-to-peer lender MoneyPlace in this financial year, which includes a conditional five-year deal to fund up to $60 million to invest in consumer loans.
Auswide managing director Martin Barrett said: “Auswide Bank’s solid performance is built on the organic growth momentum we have achieved by improving our organisational capabilities across retail and business banking, third-party relationships and omni-channel delivery.
“In addition, YCU represents a growth opportunity for us in the current financial year and beyond with the addition of more than 4,000 new customers. Importantly, the merger has positioned Auswide Bank to lead further consolidation in the mutuals sector.”
The company added that although the bank’s “retail and business customers in its traditional markets in central and northern Queensland continue to be confronted with challenging general economic conditions, this is more than offset by Auswide’s growing presence in south-east Queensland in particular, and nationally through its digital offering and third-party broker relationships”.
Mr Barrett added: “In spite of continuing margin pressures across the banking sector, we are reasonably optimistic about our ability to maintain loan book growth. In addition, we continue to focus on pursuing suitable consolidation opportunities.”
According to the bank’s full-year results this week, the bank saw an underlying net profit after tax (NPAT) of $14.0 million, up 2.8 per cent on last year’s results.
However, statutory NPAT for the consolidated group dropped from $13.3 million in 2014-15 to $11.7 million in 2015-16, largely due to “one-off expenses” totalling $3.9 million (before tax), including mergers and acquisitions projects, branch “rationalisation” and rebranding expenses, as well as “other professional costs”.
The bank also reported a 6.1 per cent increase in net interest revenue (to $53.9 million), and “despite an increasingly-competitive lending environment”, a “stable” net interest margin of 196 basis points, down from 198 for the prior year.
The company declared a final dividend of 16 cents per share, fully franked and payable on 30 September 2016, bringing the total dividend for 2015-16 to 30 cents per share.
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.