A Tasmania-based lender has revealed that it has seen a record $671 million of home loans settled in the first half of the financial year, with 90 per cent of its loan book growth coming through the broker channel.
Following the announcement of the group’s half-year results, MyState managing director and chief executive officer Melos Sulicich that its new record for housing loan settlements reflected its “strong broker and retail customer relationships” and emphasised that the lender’s growth strategy was “heavily reliant” on its continued relationships with its mortgage broker partners.
“Income and net profit increased marginally despite the challenging banking environment. We were successful in driving high-quality loan book growth, and achieved a new record for housing loan settlements, which increased to $671 million for the half, up 26 per cent compared with the previous corresponding period, reflecting our strong broker and retail customer relationships,” Mr Sulicich said in a statement.
“We are focused on building a highly scalable business and the increase in our loan book demonstrates our focus on the organic growth opportunity.”
Mr Sulicich also told The Adviser that MyState maintained a strong relationship with many mortgage brokers throughout Australia, with approximately 60 per cent of its total loan book originating through the third-party channel.
He also noted that approximately 90 per cent of MyState’s loan book growth came through its brokers.
“In terms of our mortgage originations strategy, we want to continue a very strong relationship with mortgage brokers. We’ve got a branch network in Tasmania, a branch network in central Queensland, [and] the rest of our loan book growth in NSW and Victoria comes through the mortgage broker channel.
“We’re very focused on creating good, strong and enduring relationships with our mortgage broker partners and to continue those relationships to build our book through mainland Australia. Our strategy is heavily reliant on those continued relationships with mortgage brokers.”
Mr Sulicich added that the size and type of loans that originated through the third-party channel were “very strong”.
Loan book surpasses $4 billion
The banking and wealth management group announced a statutory after-tax profit of $15.2 million for the half-year to 31 December 2016, up 0.7 per cent from $15.1 million on the previous corresponding half. Earnings per share were steady at 17.3 cents.
MyState’s loan book grew at a rate of 2.4 times national system growth, surpassing $4 billion for the first time in October 2016. Its book rose at an annualised growth rate of 14.3 per cent.
Further, the group said it had focused on maintaining low-risk growth and, during the first half, loan book growth came entirely from lending below an 80 per cent loan-to-valuation ratio.
Its net interest margins continued to reduce, which the lender said reflected the low-interest rate environment and deposit rates being repriced less than lending rates.
“There is some evidence that market competition for new lending has eased in recent months, and higher margins are expected in the second half. At 31 December 2016, MyState Bank’s loan book comprised 86 per cent owner-occupied lending and 14 per cent investor loans, with the population of investor loans well below industry average,” the lender said.
MyState increased rates on its variable rate home loan book by 12 basis points on 3 January 2017.