Heritage Bank lending recovers

Mutual lender Heritage Bank has reported strong lending growth for the 2013/2014 financial year.

After a slow start to the financial year, loan approvals rebounded strongly to reach a total $1.440 billion, an increase of 7.5 per cent on the previous year, while retail deposits also grew by $337 million during the year to total $4.706 billion.

“Heritage is performing strongly despite the fierce competition in the marketplace,” Heritage Bank chief executive John Minz said.

“All financial institutions are fighting extremely hard to attract loan customers,” Mr Minz said.

“Our success in growing both our lending volume and our retail deposits in 2013/2014 shows the strength of our brand and our people first promise to customers,” he said.

“Also pleasing is that we have increased our non-interest income, thanks to our continuing leadership in the prepaid card technology area.”

The lender’s mortgage loan arrears greater than 30 days was 0.39 per cent at 30 June 2014, about a third of the industry average.

In addition, impairment losses on loans were down by 27 per cent for 2013/2014.

“That achievement speaks volumes about the prudent approach we take to lending and also about the work that we do with customers to make sure they can stay on top of their loan obligations,” Mr Minz said.

Released yesterday, the bank’s unaudited financial results for the 2013/2014 show a pre-tax profit for the year ended 30 June 2014 was $50.04 million, a 5.5 per cent decrease on the previous year.

The after-tax profit for 2013/2014 was $35.76 million, down 3.5 per cent on the previous year.

However the previous year’s results included a gain on the sale of Visa shares.

After excluding this item, the underling pre-tax profit in 2013/2014 actually increased by 0.1 per cent, while the underlying after-tax profit increased by 2.2 per cent.

Heritage also grew its total consolidated assets marginally to $8.519 billion, an increase of 0.1 per cent.

This confirms Heritage’s standing as Australia’s largest customer-owned bank, according to an ASX statement.

The lender increased its capital adequacy ratio to 13.33 per cent and its liquidity ratio to 22.23 per cent as at 30 June 2014, well above regulatory requirements.

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