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Bank reports ‘double system’ mortgage growth

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Charbel Kadib 7 minute read

A non-major lender has attributed over $500 million in mortgage portfolio growth to a shift in demand away from the big four banks.

In its full-year 2018 (FY18) financial results, Teachers Mutual bank (TMB) has reported home loan growth of 10.49 per cent, more than doubling system growth of 4.97 per cent.

The group’s mortgage portfolio has increased from $5.4 billion in FY17 to $5.9 billion in FY18.

Speaking to The Adviser, TMB CEO Steven James attributed the growth to a shift in demand from borrowers away from the major banks.


“I think there’s definitely been a bit of a shift from the four major banks across to the mutual sector,” Mr James said.

“We’re starting to see that when people are engaging in some of the bigger activities, like buying a new home, they’re certainly seeking us out.”

Mr James also noted the contribution of the bank's broke network, which he said has been "quite sensational". 

"We're still expanding in that particular market, and of course, it's been successful," he added. 

According to its financial report, the bank's home loan portfolio is largely made up of borrowers from NSW ($4.1 billion), followed by Western Australia ($564 million), Queensland ($461 million), Victoria ($330 million), the Australian Capital Territory ($300 million), South Australia ($48 million), Tasmania ($37 million) and the Northern Territory ($20 million).


Of the bank’s three brands — Teachers Mutual Bank, UniBank and Firefighters Mutual Bank — it noted that UniBank saw the highest growth, which the bank said was consistent with the its strategic plan for that brand.

“In the three years since merging, UniBank has grown from loans of $150 million to $753 million,” Mr James said.

“Our multi-brand strategy is maturing successfully, with UniBank now firmly established, and Firefighters Mutual Bank building its membership.”

The CEO also said that the bank plans to expand its presence in the market with the launch of the group’s new brand, Health Professionals Bank, in early 2019.

“We will be bringing our experience in niche markets and understanding of key workers’ financial needs to this brand,” the CEO said.

TMB has also announced that it will open a new branch in Docklands, Melbourne, before the end of the year.

Mr James told Mortgage Business that he expects the group to report further home loan growth in FY19.

“We thought that initially there would be a little bit of a fall-off in growth going forward, but if I look ahead at the moment, we’re still probably predicting that we’ll report 10 per cent growth in lending, which is very strong — double system growth,” Mr James added.

“With the fourth brand coming in, we.re certainly moving into that key worker segment, and we.re hoping that the 1.5 million people that work in the health sector would be very interested in looking at mutual banks.”

In total, TMB posted a net profit after tax of $31.8 million, up by 14.1 per cent from FY17, which Mr James attributed to “solid growth” in the UniBank and Firefighters Mutual brands.

[Related: Bank reports $6.2bn boost in settlements]

Bank reports ‘double system’ mortgage growth
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Charbel Kadib

Charbel Kadib

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

Email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.


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