MyState focuses on low-risk owner-occupied loans

The non-major bank MyState revealed in its latest financial results report for 1H24 period (ended 31 December 2023) that its low-risk loan-to-value ratio (LVR) mortgages grew $180 million.

MyState reported that its overall LVR portfolio was 56 per cent as of 31 December 2023.

The bank revealed that 78 per cent of residential mortgages were owner-occupied and comprised of principal and interest loans.

In the report, MyState said: “Our focus is on low-risk, owner-occupied lending,” referring to mortgages with an LVR of 80 per cent or less.

MyState reported that its total residential loan book grew to $7.9 billion, a rise of $77 million from 2H23 (ended 30 June 2023).

Variable rate lending comprised 97 per cent of the total loan book, an increase from 96 per cent in 2H23. Of the bank’s new home loan flow for 1H24, only $25 million opted into fixed interest rates.

Loans with MyState that were over 80 per cent LVR only comprised 23 per cent of the bank’s mortgages.

Mortgages that were 90-plus days behind on repayments remained below the industry standard at MyState at 0.39 per cent.

Loans 30-plus days in arrears were reported to be 0.91 per cent for 2H23, which MyState said was again below the industry average.

Brett Morgan, chief executive of MyState said: “We are happy to report that credit quality remains sound. While there was a small increase, Bank arrears rates continue to be below the industry average, losses are negligible and there are no Mortgagee in Possession loans as at 31 December 2023.”

MyState’s report forecast that the cash rate will drop to 3.85 per cent by June 2025. This came after the Reserve Bank of Australia’s (RBA) decision to hold the cash rate at 4.35 per cent at the recent policy meeting.

Looking at the bank’s geographical spread, the majority of residential loans (31.5 per cent) centred in Tasmania, MyState’s home state, which was a reduction from 38.3 per cent in 2H23. This was followed by Victoria that had 23.4 per cent of all residential loans, an increase from 18 per cent in 1H23 (end December 2022).

Speaking with Mortgage Business, Mr Morgan said: “We’ll continue to focus on maintaining a strong presence in our home state of Tasmania, while growing our brand and presence along the east coast.”

[Related: MyState Bank announces new head of lending]