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MyState loan book grew 11% in 1H23

A record $1.6 billion of home loans were settled by the non-major bank in the first half of the 2023 financial year, as it expanded its presence in the eastern seaboard.

MyState Limited has delivered a record first-half profit for the period ended 31 December 2022 with a net profit after tax (NPAT) of $20.1 million, up 20.7 per cent.

According to the Tasmanian-based lender, the banking group had been bolstered by strong growth in deposits and “the second-fastest growing home loan book in Australian banking”.

Over the half, MyState Bank’s home loan portfolio grew to $7.6 billion, up 10.5 per cent on June 2022. 

It settled $1.57 billion in the half, a record volume for a six-month period, up 6 per cent on the prior comparative period.

The bank said it remains focused on “low-risk, owner-occupied lending”, with a loan-to-value ratio (LVR) of less than 80 per cent (which represents around 76 per cent of its loans).

There was a small uptick in arrears reported in the half, with 30+ day arrears at 0.61 per cent and 90+ days to 0.24 per cent. However, the lender suggested these both “remain below industry average”.  

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MyState chief executive Brett Morgan commented: “Since we started our 2025 Growth Strategy 18 months ago, MyState’s home lending book has grown by 39 per cent, to $7.6 billion. Our rate of growth has increased to around 3.5 times system over that time.

“The biggest growth has been in one of our key target markets, Victoria, which increased by 69 per cent in the 18 months to 31 December 2022, followed by NSW, up by 43 per cent, and Queensland, which grew by 42 per cent.

“These three states now represent 63 per cent of MyState’s total home loan book, compared with 58 per cent when we started our Growth Strategy in July 2021.”

Mr Morgan attributed its lending growth to strong support from the broker channel, which has originated 81 per cent of its mortgages.

“Brokers are the backbone of our distribution of mortgages; a key part of our strategy is to partner with brokers,” he said.

“We see opportunity in the challenges that the industry is facing, as an unprecedented number of Australians must consider refinancing as their fixed rate loan terms expire…

“We have a relatively small fixed rate book, around 20 per cent of all of our home loans, that’s well below many in the industry. And, early indications are that around 80 per cent of our customers are staying with us when their fixed term ends.”

Indeed, the bank noted that just 1 per cent of its loans written in the half were fixed rate, accounting for around $23 million, as rates continued to rise over the period.

Looking forward, the banking group CEO said: “MyState is focused on both retaining existing and picking up new customers by executing the fundamentals; offering competitive rates, closely partnering with our broker network, providing among the sector’s fastest turnaround times, and service that customers are happy to recommend to family and friends. 

“Our Tasmanian-based bank has attracted customers in record numbers across the country, with 14,500 new bank customers during the period, a 54 per cent increase on 12 months ago. Nearly two-thirds of our home loan customers are now from outside of our home state.”

[Related: MyState loan book up 6.9% in Q1 to $7.3bn]

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