On Friday, the Tasmania-based lender announced a statutory after-tax profit of $29.6 million for the year to June 2014, a 3.9 per cent improvement on the previous year.
While loan growth remains soft at 0.4 per cent, the second half of the 2013/2014 financial year was a marked increase on the first.
Monthly settlements increased from $48 million in January – with 50 per cent of loans written through the broker channel – to $72 million in June, where 58 per cent of loans were written through the third-party channel ($42 million).
“We are pleased to report an increase in our full-year earnings in an environment where top line revenue growth is challenging,” MyState Limited managing director Melos Sulicich said.
“Overall, it was a tale of two halves.
“The first half saw a decline in the group’s home loan portfolio due to soft economic conditions in our traditional markets and intense competition amongst lenders,” he said.
Following increased focus on the broker channel, loan originations improved strongly in the second half, which saw a 1.6 per cent increase in the group’s home loan portfolio.
“While this was disappointing, the second-half increase in loan originations is expected to continue and we anticipate robust portfolio growth in the 2014/2015 year,” Mr Sulicich said.
“MyState continues to focus on writing high-quality loan business; arrears remain well below industry peers, reflecting the sound credit quality of the loan book,” he said.
The group net interest margin increased three basis points to 2.43, despite intense price competition for new loans.
Mr Sulicich said the successful launch of a $320 million RMBS transaction in November, along with repayment of more expensive third-party and wholesale funding, enabled MyState to reduce its overall cost of funds.