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BNK earnings bolstered by lending boost

The bank has reported an improvement in its underlying earnings, driven by an increase in the uptake of is on-balance sheet loan products.

BNK Banking Corporation Limited has released its half-year results for the 2020 financial year (HY20), posting a statutory net profit after tax of (NPAT) of $3 million, up $2.3 million from HY19.

 According to BNK, its performance was helped by strong on-balance sheet loan book growth, up 7 per cent to $7.6 billion.

The lender attributed the improvement to the “distribution and marketing capability” of the group’s wholesale business Better Choice.

BNK reported that while total banking and wholesale settlements fell 20 per cent to $300.9 million for the half, the group benefited from a greater proportion of higher margin on-balance sheet settlements, up from 6 per cent to 27 per cent ($82 million).

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The group has also experienced strong on-balance sheet growth in the start of the 2020 calendar year, with approximately $20 million in loans settled in January.

Meanwhile, BNK’s aggregation business, Finsure, reported $7.3 billion of settlements in HY20, which included $1.43 billion during the month of December 2019.

BNK’s total aggregation loan book totalled $41.9 billion as at 31 December 2019, an increase of 18 per cent on the previous corresponding period.

Moreover, BNK has reported that it has reduced its exposure to the West Australian market, where its former brand, Goldfields Money, was initially based.

West Australian loans now make up 54 per cent of its portfolio, down from 73 per cent, which it said reflected BNK’s ambition of becoming a “national challenger bank”.

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BNK added that its partnership with [email protected] would also help improve its national footprint.

Reflecting on the group’s overall result, BNK managing director Simon Lyons said: “I have continued confidence with the strategic direction the group is taking, which is demonstrated in the financial result we have achieved so far.

“The operational efficiencies demonstrated in our half-year report clearly show we are on track or exceeding our strategic goals.

“The profit signature of the bank continues to grow and the synergies between the merged entities will continue to deliver further growth going forward.”

BNK claims $2.9 million in missing funds  

BNK has also revealed that during HY20, it was advised of the appointment of liquidators to ATM Co Pty Ltd and Tuff Enterprises Pty Ltd — entities with which the group held ATM bailment and cash in transit agreements.

The group has been notified that the liquidator has not located BNK’s funds, which total approximately $2.9 million.

BNK has lodged a claim with its insurer for the missing cash, adding that it would continue to engage with its insurer to provide the necessary documentation and evidence in support of the claim.

The group is expecting a decision regarding the claim before 30 June 2020.

An impairment provision and associated insurance receivable have been recognised in the half-year financial report for the amount of $2.9 million. If, in the event the actual outcome with the insurance claim differs from the receivable recognised, this will be adjusted in future periods.

[Related: BNK sees settlement growth across channels]

BNK earnings bolstered by lending boost
Simon Lyons
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