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Bank reports $6.2bn boost in settlements

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Reporter 5 minute read

A non-major lender has reported “above system” mortgage growth and is expecting to further consolidate market share in the coming financial year.

In its full-year 2018 (FY18) financial results, super fund-owned bank ME has reported $6.2 billion in new home loan settlements, amounting to 1.3 times above system growth.

ME’s overall mortgage portfolio increased from $22.1 billion in FY17 to $23.9 billion in FY18.

Further, the bank reported that its customer deposits grew by 17 per cent to $14.8 billion, with household deposit growth also rising, up by 27 per cent.

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According to the lender, customer numbers also grew, rising by 13 per cent to 474,000 and have increased at an annual compound growth rate of 11 per cent since June 2014.

ME CEO Jamie McPhee has noted that the lender plans to further expand its presence in the market in FY19 though digital investment and by improving its home loan products and services.

The ME CEO also said that the bank had performed strongly in tough operating conditions, including a softening home loan market, macro-prudential restrictions on home lending, rising funding costs and ongoing regulatory imbalances.

“We expect to increase market share in FY19 despite challenging conditions by investing in digital experiences for customers and continuing to develop our suite of retail banking products and services,” Mr McPhee said.

On the whole, the bank reported underlying earnings of $96.5 million for FY18, up by 13 per cent from FY17.

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ME’s statutory profit after tax also grew, rising to $89.1 million, up from $61.9 million in FY17.

Mr McPhee claimed that earnings growth reflected a 7 per cent increase in the bank’s asset portfolio to $28.3 billion and a higher net interest margin, up by 12 basis points to 1.62 per cent from FY17.

[Related: Prospa reports 70% growth in new loans in FY18]

Bank reports $6.2bn boost in settlements
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