A non-major lender has posted a 28 per cent rise in profit for the full year to 30 June following strong growth in home loan settlements.
ME Bank has reported an underlying net profit after tax of $47.4 million for 2013/2014, a rise of 28 per cent on the previous reporting period.
The increase was driven by growth in home loan settlements, up 19 per cent to $3.8 billion, and improved net interest margin, up two basis points to 1.55 per cent.
ME Bank chief executive Jamie McPhee said it was a strong performance achieved by the lender against the backdrop of a low credit growth environment.
ME Bank continued to diversify its funding structure, expanding funding from within its industry super fund network with several new products, including the Cash Notice Account, which on its own reached over $1 billion in deposits in its first year.
Total customer deposits grew by 17 per cent, ahead of system growth.
Total on and off balance sheet assets grew nine per cent to $21.7 billion, with total loans on the balance sheet growing 19 per cent year-on-year to $14.9 billion, largely driven by a leading position in the fixed rate home loan market.
Mr McPhee said the bank had achieved a home loan settlement record in June 2014 with $409 million in settlements, the first time the it has exceeded $400 million in home loan settlements in a single month.
Since establishing its broker offering in December 2011, ME Bank has partnered with 18 of Australia’s largest aggregation groups and accredited nearly 5,000 brokers, delivering $1.2 billion in home loan settlements, up 143 per cent from $500 million the previous year.
Mr McPhee said the bank was focused on a strong growth trajectory and home loans will continue to be the most important source of asset growth over the next three years.
“Our nearly completed technology transformation project will also be a key enabler for growth,” he said.
“In an industry increasingly reliant on technology, the completion of the project in early 2015 means ME Bank will have a highly capable technical platform with which to compete against industry leaders in terms of the range and attractiveness of products and services.”