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BNK sees settlement growth across channels

The diversified banking business has reported strong settlement growth in its direct lending channel, while total banking and wholesale settlements showed marginal growth.

BNK Banking Corp Ltd has released an update to the Australian Securities Exchange (ASX) with results for the second quarter of the 2020 financial year (2Q20)

The banking division continued its strong start for the financial year, with the bank following up record settlements of $38.2 million in the first quarter with another record in the second quarter.

The bank recorded settlements of $43.7 million in 2Q20, up 202 per cent year-on-year from $14.5 million in the previous corresponding period.

As a result, the total on balance sheet lending book grew to $267.7 million, up 50 per cent from $178.6 million in 2Q19.


Total banking and wholesale settlements of $146.7 million for the quarter grew marginally by 3 per cent.

However, settlements benefited from higher margin on a greater proportion of on-balance-sheet bank settlements, which was at 30 per cent, compared with 10 per cent in 2Q19.

On-balance-sheet settlements currently deliver over four times the margin for the group compared with off-balance-sheet wholesale settlements. BNK said this continues to be a key focus.

The bank is also continuing to explore new, more flexible off-balance-sheet funding solutions to complement existing funding arrangements, it said in its update to the ASX.

BNK managing director Simon Lyons said the bank utilises the large-scale distribution capability provided by mortgage brokers to the bank to deliver its banking products.


“Importantly, the increased volumes of on-balance-sheet lending have been funded through a substantially improved deposit base with a reduction in higher cost term deposits being replaced by good increases in new-to-bank transaction account funding during the half,” Mr Lyons said.

“Our transaction account mix has risen to 22.3 per cent. Maintaining a focus on efficient and profitable growth is important, and changing the funding mix by raising transaction account funding is in line with our long-term strategic targets.”

My Lyons told The Adviser that moving forward, a key focus for BNK will be to provide new deposit account products as the bank aims to match its deposits with loan growth.

The bank is in the process of launching a cash management account to the market, through which customers can manage their investments while earning interest.

Mr Lyons also said the bank is continuing to develop its new digital banking platform, which will enable it to provide banking products directly to customers as well as through third-party intermediaries.       

[Related: BNK reports multichannel settlement growth]

BNK sees settlement growth across channels

Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

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