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Brokers facilitate 14% rise in mutual’s loan portfolio

by Reporter5 minute read

A leading mutual bank has seen its housing loan portfolio swell by 14.2 per cent to $4.3 billion in 2015/16, thanks in part to its “now well-established partnership with home loan brokers”.

Speaking to The Adviser after releasing the bank’s financial results, CEO of Teachers Mutual Bank Steve James said that the bank’s 2,100 accredited mortgage brokers wrote 25 per cent of the 14.2 per cent rise in home loans, and that he expects that number to increase.

Mr James said: “We have more than 2,000 individual brokers and we want to increase that number. We certainly want to grow the brand through the broker market.

Adding that the bank only entered the third-party channel in 2013, Mr James said that the figures represented “fantastic growth so far”, but added that “more growth is certainly yet to come from the broker market for us”.


“Over the next year we will look to invest further resources to support and deepen our current network of home loan brokers across Australia,” he said.

Teachers Mutual Bank’s CEO highlighted that its sub-brand UniBank recently opened its mortgage range to brokers across Australia, and that he expected this would help boost next year’s results. 

Touching on the fact that Teachers Mutual Bank Limited announced a net profit after tax of $30.2 million, a “modest increase” of 1.44 per cent on 2014, Mr James highlighted that this was an “excellent result” given the current climate.

He said: “Given the challenges of a falling interest rate environment, and the costs of our merger and systems conversion with Unicredit (now UniBank), our modest profit increase is an excellent result.”

Mr James told The Adviser: “It is tough financial times, no doubt about it, and there is a lot of pressure on the interest margin going forward. With the Reserve Bank cuts there will be certainly more pressure on the interest rate and the net interest margin going forward but we want to remain very competitive in the marketplace and have a great relationship with the third-party channel going forward.”

Overall, the annual results show that the mutual bank’s net interest margin was 2.37 per cent, attributed to “the consequence of the tighter interest rate environment”, while its high capital adequacy ratio maintained at 15.85 per cent, and capital reserves increased to $437 million.

The results also show that assets grew by 14 per cent to $5.5 billion, which Mr James said was due to “strong home loan growth, strong deposit growth [which rose 13.9 per cent], and a big increase in membership”. 

Over the financial year nearly 11,000 new members joined Teacher’s Mutual Bank and UniBank, taking total member numbers to 177,357. 

Mr James concluded: “In the 50 years of the bank, we’ve gone from 29 members and $644 in assets, to well over 177,000 members and $5.5 billion in assets. That’s great growth, and it shows that mutual banks are well respected and well used by their members in Australia.” 

The bank has said that it will soon merge with NSW-based Fire Brigades Employees’ Credit Union, which will become Firefighters Mutual Bank.

[Related: Bank enters broker channel]



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