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BNK loan book up 5% in 1Q24

Higher margin lending helped the banking group grow its loan book over the first quarter of the 2024 financial year.

ASX-listed lender BNK Banking Corporation Limited (BNK) has disclosed it reached a record high for its loan book – $1.41 billion – in 1Q24.

In a trading update released by the group yesterday (31 October), the lender stated that its loan book rose 5 per cent on the previous quarter.

According to the lender, the growth was aided by its continued expansion into the higher margin lending space, which has been a key strategy for the group recently.

It followed the lender having grown its high margin lending portfolio to $195 million in FY23, representing approximately 15 per cent of its loan book, with BNK setting the goal for the high margin lending portfolio to reach 20 per cent of total FY24 settlements.

BNK revealed that organic on-balance sheet lending settlements in 1Q24 also increased, up 40 per cent from 4Q23 to $150 million.

It said achieving a direct loan-to-deposit ratio of 80 per cent in the quarter reflected its “continued ability to raise deposits to fund growth”.

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Total deposits at the bank reached record high of $1.45 billion, an increase of 16 per cent from the 4Q23.

The chief executive of BNK, Allan Savins, stated: “BNK has started the year well, with steady increases in both our loan and deposit books.

“Our direct loan-to-deposit ratio of 80 per cent reflects our competitive products and ability to continue carving out market share in a complex interest rate environment.

“BNK remains well-capitalised and we are dedicated to growing our higher margin product solutions whilst carefully managing our funding costs as we work towards minimising our liability concentrations and diversifying our product mix.”

The lender also confirmed the appointment of Stephen Kinsella as its new chief financial officer, which occurred in 1Q24.

Mr Kinsella commences his position with BNK today (1 November), having joined with over 25 years of experience in the banking sector and previously worked in senior management roles at Commonwealth Bank of Australia, Bankwest and ABN Amro.

The immediate retirement of BNK’s chairman Don Koch was also confirmed, with Mr Koch remaining on the board as a non-executive director until the conclusion of the company’s 2023 annual general meeting on 29 November.

Jon Denovan was elected as independent chair of the company having previously served as independent deputy chairman.

When Mr Koch announced his retirement, Mr Savins thanked him for his “significant contributions” to the company.

He stated: “Don has overseen what has been a transformational period for BNK, which has undertaken an ambitious business model change to deliver sustainable profit growth.”

[Related: BNK Group on balance sheet loan book rises 37%]

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