Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
subscribe to our newsletter

Home loan growth drives 30% rise in ME profits

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.

Advertisement
Advertisement

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]

Home loan growth drives 30% rise in ME profits
mortgagebusiness

Annie Kane

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. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The federal government has committed an additional $130 billion in support to protect jobs threatened by the economic fallout from the cor...

New government-led interventions in the housing market in response to the coronavirus outbreak are set to further hinder transaction activit...

The number of owners withdrawing their property from auction soared to 40 per cent last week, following the introduction of a ban on auction...

FROM THE WEB
podcast

LATEST PODCAST: Further relief for SMEs and borrowers

Do you think Australia will move to quantitative easing this year?

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Mortgage Business.

Read more

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.