Improved broker services and the FHLDS have helped the Queensland-based bank deliver loan book growth in 1H21, according to the lender.
Auswide Bank has released its half-year results for the six months to 31 December 2020 (1H21), revealing that its total loan book, including investments in managed investment schemes, was up 8.4 per cent from $3.22 billion in the prior comparative period (pcp), to $3.48 billion.
According to the lender, housing loans made up 95.2 per cent of the loan book (or $3.318 billion), up 10.7 per cent pcp.
The bank noted that strong broker flows had contributed to a 56.7 per cent increase on pcp in home loan approvals and a 57.9 per cent increase in home loan settlements.
Overall, 79 per cent of flows came through the broker channel in this half.
The Bundaberg-based bank said that larger flows had come as it improved broker services through back-office efficiencies, which had reduced loan processing times.
The partnership with the Queensland Rugby League (QRL) also remained “an important reference point for brokers and consumers”, the bank noted, lifting Auswide’s profile across Queensland and NSW.
It added that during the first half of the financial year, strong broker flows also extended Auswide’s presence outside Queensland, which now represents 28.6 per cent of the total loan book (H120: 24.9 per cent).
Moreover, it stated that the First Home Loan Deposit Scheme (FHLDS) – which it started offering in February 2020 – had also helped introduce Auswide to a wider broker and customer group.
The scheme had reportedly helped introduce Auswide to more borrowers aged 24-35.
Speaking after releasing the half-year results, Auswide Bank’s managing director, Martin Barrett, said: “Our strategic focus on delivering a highly scalable broker experience supported record loan flows assisted by participation in the First Home Loan Deposit Scheme and growing broker recognition. Our loan book has continued to diversify both geographically and with a younger demographic.”
Excluding COVID-19-related assistance, the bank’s arrears were at 0.26 per cent of total loans. The bank noted that these were “historic lows”.
At 31 December 2020, just 1.1 per cent of Auswide’s loan book was still receiving assistance, largely relating to home loans with an LVR of less than 80 per cent. This was down from 9 per cent as at 30 June 2020.
Total provisions and general reserve for credit losses increased to $9.9 million “in line with loan book growth”, the bank said. However, it added that the board was “confident” that would be sufficient to manage the uncertainty created by COVID-19, with a review of COVID-19-related provisions to be undertaken during the second half.
Mr Barrett concluded: “Our strategic focus on delivering a highly scalable broker experience supported record loan flows assisted by participation in the First Home Loan Deposit Scheme and growing broker recognition. Our loan book has continued to diversify both geographically and with a younger demographic. Our Private Bank, QRL partnership and technology investment are further building Auswide’s brand profile and enhancing our customer value proposition.
“At the same time, our strategic focus on optimising our funding mix by growing customer deposits has enabled us to significantly reduce our funding costs.”
The bank said that it would continue to prioritise the implementation of its three-year strategic plan to “further build brand awareness, improve technology, fulfil its regulatory obligations and enhance the customer experience”, while assisting those impacted by COVID-19.
Overall, the bank reported net profit after tax of $11.4 million, up 23.9 per cent, and a fully franked interim dividend of 19.0 cents per share, up 2 cents per share.
[Related: Auswide book grows as broker flows increase]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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