Industry super fund-owned bank ME has recorded a 29 per cent rise in underlying net profit, partly due to growth in its home loan portfolio, which resulted in $4.6 billion of settlements in the last financial year.
According to the bank’s annual review, 16,000 new home loans totalling $4.6 billion were settled in the last financial year, with a "record" $2.6 billion of loans settled in the second half of the year.
Of all home loans settled, 11 per cent came from the bank’s Member Benefits Program, which saw "record participation" from 106 industry super funds and unions.
A 6 per cent increase in total assets, and “stable net interest margin” of 1.55 per cent reportedly helped the bank make $74.7 million net profit.
Home loans remained the core focus of the bank, and accounted for 97 per cent of all lending assets.
In a bid to further improve the home loan application process over the coming years, ME has said it will continue to “automate and streamline the end-to-end application process, including credit assessment, valuations and settlements”, with the aim of providing same-day approval on 50 per cent of its home loan applications by the financial year 2019.
ME CEO Jamie McPhee commented, “Growth has been achieved by improving systems and processes, increased brand awareness and digital capability, and a deeper relationship with our industry super fund partners.
“We are meeting our financial objectives while delivering strong growth which, combined with ongoing investments in brand and technology, are positioning the bank for even greater growth going forward, ensuring we deliver long-term strategic value and appropriate financial returns to our industry super fund owners.”
The annual report also revealed that ME customer numbers grew 8 per cent to 365,520 in the last financial year, while customer deposits have grown by 19 per cent to $10.5 billion.
ME’s statutory profit after tax was $76.8 million, down 1 per cent on the previous year. However, the bank has stated that the 2015 statutory profit was “favourably impacted by the reversal of unrealised losses on the hedge book from prior years of $28.1 million ($19.7 million after tax)”.
[Related: ME cuts home loan rates]