MyState Bank has released its results for the first half of the financial year 2021 (ending 31 December 2020), revealing that both its applications and settlements were up over the half.
According to its results, the non-major bank received $1.07 billion of applications in 1H21, its highest figure for the first half of a financial year to date.
Following strong quarterly figures, settlements were also at new highs for the half, coming in at $68 million, up 24 per cent on 1H20.
MyState suggested that recent growth had been partly driven by success with the Government First Home Loan Deposit Scheme (FHLDS), but was “mainly due to an active owner-occupier refinance market and increased interest in fixed rate home loans”.
The bank’s mortgage book was up at $5.2 billion as at 31 December 2020, up 5.5 per cent for the 12 months to 31 December 2019 and representing 1.7 times system growth.
The bank noted that while the proportion of loans on its books with a high loan-to-value ratio had increased (a quarter of its book was for loans over 80 per cent LVR), this was largely a result of its participation in the First Home Loan Deposit Scheme.
Indeed, the bank had experienced strong demand for FHLDS loans, which led to it having to pause its acceptance of new applications to the scheme in August. The bank also paused accepting applications for new customers with a loan-to-value (LVR) ratio of 90 per cent or more in September.
The bank also outlined that, as of 15 February 2021, less than 200 customers remained on some form of COVID-related assistance, with the majority being home loan customers. Approximately 1.6 per cent of total home loan balances were still on deferrals as of last week, down from a peak of 10.9 per cent in June 2020.
Looking forward, the bank said it was further investing in distribution capacity, with a doubling of the number of business development managers in the business and was therefore expecting a significant increase in growth through the second half and beyond.
MyState’s managing director and CEO, Melos Sulicich, commented: “This was a challenging period. However, the results underlined the effectiveness of MyState’s strategy: driving strong customer acquisition, increasing investment in digital innovation and managing operating expenses while maintaining a culture focused on delivering positive customer experiences.
“Our decision to increase the momentum of our evolution into a digital bank and funds management business is paying off. Our ability to undertake this digital transformation quicker than many of our competitors means that our growing customer base finds we are easier and more trustworthy and intuitive to deal with, leading to stronger relationships with them.
“Importantly, it allows us to scale more efficiently as competition for lending products intensifies. We are better able to refine our products to ensure they continue to suit our customer’s needs, and harness resulting business opportunities so they provide maximum benefit to shareholders.”
“Looking ahead, we will have an ongoing focus on digitisation of operations, adding to our capability and generating momentum to driving further activity and investment in attracting new customers. We see a significant opportunity for us to grow the bank balance sheet and funds management businesses in a low-risk manner, but at much faster pace,” he said.
“The momentum we have seen in the first half is expected to continue into the second half, with many of the underlying drivers to persist for the full financial year. The improvement in operating efficiencies seen will continue, further supporting our significant growth ambitions.”
Overall, MyState reported an 18.8 per cent growth in core earnings to $26.4 million and 12.6 per cent growth in statutory NPAT to $17.0 million.
[Related: FHLDS, refinancing drive up MyState book]
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.