Mutual bank pre-tax profit surges by 6.46%

In a trading update to the ASX on Monday, Heritage Bank issued a financial report outlining its overall performance for the 2015/16 financial year.

The lender reported an overall pre-tax profit of $51.11 million, up from the $48.01 million the previous year. Its after-tax profit was $36.14 million, up 7.55 per cent on $33.61 million in the prior corresponding period.

According to the bank, it recorded “significant increases” in both loan approvals and retail deposits in the second half of the financial year, which bolstered its mortgage portfolio.

Although its loan approvals were down for the year overall, approvals for the second half of the 2015/16 year surged to $970 million, up from $810 million in the first.

“The momentum resulted in annualised growth in the mortgage portfolio of 7.1 per cent for the second six months of the year, which was above the Reserve Bank’s reported system average of 6.7 per cent,” the trading update stated.

The bank said that it is looking to build on the momentum of the past financial year throughout the rest of 2016/17, with an updated strategy that includes “simplifying [its] processes and becoming easier to do business with, focusing on improved digital banking capabilities, and recruiting and developing passionate staff”.

Heritage Bank took the title of Rising Star in the 2016 Momentum Intelligence Third-Party Lending Report: Non-Major Banks, rising from 10th position last year to sixth position in 2016. Heritage had the highest year-on-year increase in its overall aggregate score across the 23 metrics.

[Related: Heritage Bank appoints interim chief]