BNK Group on balance sheet loan book rises 37%

ASX-listed lender BNK Banking Corporation Limited has released a trading update, which revealed its balance sheet loan book reached $1.3 billion in the fourth quarter of the 2023 financial year (4Q23).

The figure is an increase of 37 per cent on the $984 million from the same period in the previous year and a rise of 2.8 per cent on 3Q23.

The fully broker-originated lender also saw an increase in total deposits to $1.3 billion, up 30 per cent from the same quarter the previous year, achieving a direct loan-to-deposit ratio of 88 per cent, which BNK said displayed the company’s “continued ability to fund growth”.

In its update, BNK also revealed its fourth quarter results delivered on its expansion goal into the higher margin lending space, exceeding its $100 million higher margin expansion target by increasing its total higher margin lending portfolio to $195 million.

The lender had pivoted its business over the financial year to focus on commercial lending, with an aim of achieving 15–20 per cent in commercial property settlements in FY23.

According to the lender, 96 per cent of its balance sheet loan book is residential loans, with 4 per cent being commercial.

Speaking while releasing the update, BNK’s chief executive Allan Savins said: “BNK has finished the year on a strong note by materially improving on our higher margin loan portfolio, which now stands at $195 million.

“We are executing on our strategy of expanding into the higher margin commercial lending space, and we will continue to make investments that drive organic growth.”

Earlier this year, the lender increased its book by 13 per cent after acquiring $150 million worth of high-margin residential mortgages from a warehouse financed by Goldman Sachs.

Non-executive director resigns

As well as releasing its trading update, BNK has also announced the resignation of Michelle Guthrie who has been a non-executive director with the company for over two years. The resignation was effective as of Monday (31 July).

On receiving the news of Ms Guthrie’s resignation BNK’s chairman Don Koch said: “On behalf of the board, I would like to thank Michelle for her service on the BNK Board, and we wish her well.

“Michelle has helped guide BNK through a challenging period and we thank her for that.”

The trading update came after the organisation reached an agreement with APRA to pay a penalty of $247,000 for overdue economic and financial statistics reporting.

Speaking earlier this month, Mr Savins said the organisation’s failure to submit the forms to the regulator was due to a “technical issue with its core banking platform”, which it said, “prevented it from generating the internal information needed for APRA’s Monthly ADI Statistics on time”.

“While this incident was extremely unfortunate, we can assure APRA and other stakeholders that the rectification work is now complete,” Mr Savins said at the time.

[Related: BNK fined for reporting failures]