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Digital bank reports lift in lending portfolio in 3Q23

BNK Banking Corporation Limited has provided a trading update for the third quarter of the 2023 financial year.

BNK reported its lending portfolio by funder increased 3 per cent from 3Q22, up to $2.7 billion, and its lending book now totals $1.3 billion, an increase of 55 per cent from the same period last year.

Notably, the surge in BNK’s lending book can be attributed to its purchase of a $150 million portfolio of higher margin residential mortgages from Goldman Sachs in March 2023, exceeding its target of $100 million of high margin lending in FY23, according to Mr Savins.

“BNK also settled a further $42 million in specialist warehouse loans during the quarter through BNK’s alliance with Goldman Sachs, a decrease of 57 per cent from $98 million in Q3FY22,” Mr Savins added.

The digital bank also recorded an increase of 8 per cent in organic and inorganic lending settlements, up to $265 million.

The digital bank also reported that its total deposits were $1.37 billion for 3Q23, an increase of 65 per cent when compared to the same period last year, reaching record highs for the digital bank.

BNK chief executive Allan Savins commented that this was a “testament to the strength and diversity” of the bank’s distribution network.

Additionally, BNK reported a 16 per cent increase in deposits quarter on quarter, with term deposits now contributing to 46 per cent of its total deposits.

 

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Furthermore, it recorded a direct loan-to-deposit ratio of 79 per cent, which the bank stated, reflected its “continued ability to raise deposits to fund growth”.

Mr Savins commented on these results: “The strong growth we have seen in our deposit base helps to reduce the risk in our loan book.

“The robust growth in our deposits reflects the popularity of our deposit program. It strengthens our liquidity position and increases our ability to efficiently fund operations in a volatile environment.

“It is also a reflection of our ability to adapt and continue to attract and retain our customers in a changing interest rate environment.”

In other developments, BNK recently welcomed non-bank lender Firstmac as a substantial shareholder after it increased its stake in BNK from 1.49 per cent to 19.9 per cent following BNK non-executive director and major shareholder John Kolenda selling his 12.064 per cent shareholding in BNK while stepping down from the board.

[RELATED: Firstmac becomes substantial shareholder in BNK]

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