One of Australia’s non-majors has posted a strong half-yearly profit result driven by a surge in broker loan settlements.
ME Bank announced yesterday that it has lifted its half-year profit by 14 per cent to $29.1 million for the six months to 31 December 2014.
ME Bank CEO Jamie McPhee said the half-year profit was a solid result given the highly competitive, low credit growth environment and continued investment in the bank’s nearly completed technology transformation program.
“Profit growth was driven by a new record in home loan settlements − up 41 per cent to $2.4 billion at the midpoint of the financial year compared to the previous corresponding period,” he said.
“We settled the highest amount of home loans in ME Bank’s history − $432 million − in December 2014."
ME Bank also increased sales momentum through brokers by 175 per cent, generating $1.1 billion in home loan settlements for the half-year − up from $0.4 billion for the previous corresponding period.
Total on and off balance sheet assets increased to $22.5 billion at 31 December compared to $21.7 billion at 30 June, driven mainly by growth in housing loans.
“ME Bank is looking forward to building on our strong half-year results with completion of our four-year technology transformation program due before the end of the fiscal year,” Mr McPhee said.
“This will increase our capabilities, efficiencies and will be a critical driver of growth and profitability."
Mr McPhee also welcomed the recommendations of the Financial System Inquiry, which he said will foster greater competition for Australia’s banking system.
“ME Bank together with the regional banks provided a strong submission that resonated with the Australian community; I’m pleased to see the inquiry has agreed to address the regulatory, capital and funding anomalies that unfairly advantage Australia’s major banks," he said.
The ME Bank chief also identified Comprehensive Credit Reporting (CCR) as one of the most exciting changes in the industry.
“CCR has the potential to provide massive value for consumers in terms of access to and the cost of credit, and then there’s its wider economic value,” Mr McPhee said.
“ME Bank expects to be fully participating in CCR this year.”
[Related: ME Bank lures borrowers with $1,000 rebate]