A sharp lift in mortgage activity and third‑party flows have defined MyState Bank’s first-half story.
MyState Bank, the Tasmania- and Queensland-based regional lender that merged with Auswide Bank in early 2025, has reported a strong first-half 2026 result marked by rising home loan volumes and an overwhelming reliance on broker flows to drive growth.
Across the group, the home loan portfolio reached $12.9 billion in 1H26, edging 0.4 per cent higher on the prior period, while the total loan book rose 1.1 per cent to $13.2 billion.
Since 30 June 2025, the (legacy) MyState home loan portfolio expanded by 3 per cent to $8.4 billion, indicating that the growth pulse had accelerated following the merger.
A key driver has been a surge in new housing activity.
Home loan applications climbed from $1.5 billion in the half to December 2024 to $2.4 billion in the June 2025 half, before hitting $3.1 billion in the December 2025 half.
Over the same sequence, settlements rose from $0.9 billion to $1.4 billion and then to $1.5 billion.
Speaking to The Adviser, managing director and CEO Brett Morgan said the step change in scale since the Auswide deal had been central to the bank’s improved operating performance.
“The increase in scale following the transformational merger with Auswide in FY25 has contributed to improved operational performance in the first half of FY26,” he said.
Variable-rate loans also continue to dominate, with more than 90 per cent of new flow written on variable terms.
Broker flows dominate distribution
The results further underlined the centrality of the third‑party channel for the group.
In the five months to December 2025, brokers on a combined basis accounted for 89 per cent of new mortgage flows, with proprietary channels contributing the remaining 11 per cent.
Morgan said the bank’s reliance on intermediated distribution was deliberate and core to the merged group’s strategy.
“So, over the past 12 months, 89 per cent of our new lending has been broker originated lending,” he said.
“It reiterates we’ve invested and continue to invest in building the team and building processes and ensuring we’re very aligned with brokers, and we will continue to do that well into the future.”
He added that the group’s geography made that approach almost inevitable in some markets.
“In key markets like New South Wales and Victoria we have zero presence, no presence at all. We have our BDMs on the ground, and we just work with brokers to support them understanding our very competitive offer, both on product price and service, and how we can help serve their customers well,” he said.
“We’re a very Australia based operation, a very broker centric business, and very focused on supporting broker to succeed.”
Book composition, geography, and credit quality
Within the $12.9 billion home loan book, $10.2 billion is owner-occupier principal-and-interest lending, $1.9 billion is investor P&I, around $0.1 billion is owner-occupier interest‑only, and $0.7 billion is investor interest‑only.
That tilt towards owner-occupier, amortising debt – combined with a portfolio loan-to-value ratio at origination of 63.9 per cent – leaves the group exposed to comparatively lower-risk segments of the housing market.
By flow, the six months to December 2025 also skewed towards more conservative credit.
Owner-occupiers made up 81 per cent of new lending, with investors at 19 per cent.
Only 13 per cent of new lending carried lenders mortgage insurance, implying that most borrowers were bringing at least 20 per cent deposits to the table.
Geographically, the merged book reflects the combination of MyState’s Tasmanian base and Auswide’s Queensland heritage, along with an east‑coast expansion strategy.
At December 2025, home loan concentration by state was: Queensland, 31.9 per cent; Victoria, 22 per cent; Tasmania, 20.2 per cent; NSW, 17.4 per cent; Western Australia, 4.8 per cent; and South Australia, 2 per cent.
Crucially, credit performance continued to improve through the half with group 90-plus-day home loan arrears falling to 0.28 per cent, down from 0.44 per cent at 30 June 2025.
Morgan framed this as validation of the merged group’s underwriting discipline.
“Here we’re particularly proud how we brought together these two organisations and teams… across our four brands including Auswide Bank and MyState,” he said.
“We’re very broker focused, and continue to work with brokers nationally to support them and their customers and support our business succeed.”
Deposits increase, and bank announces new brand strategy
On the liability side, customer deposits increased to $10.2 billion – a 0.5 per cent rise on the prior period – with the customer deposit ratio holding broadly stable at 70 per cent of total funding.
These dynamics fed through clearly to the bottom line.
Underlying net profit after tax rose to $28.2 million in 1H26, up from $17.5 million in the prior corresponding period, while statutory NPAT increased from $15.9 million to $27.3 million.
Looking ahead, the group flagged three priorities: growing the loan book, increasing customer deposits both directly and via partnerships, and scaling the equipment finance book.
Morgan said the brand architecture would be gradually simplified, with a decision made to transition to the MyState brand moving forward.
“From a broker perspective, that is a better known brand and better utilised brand. So we took into account broker feedback and perspective when considering the decision as to which brand to go forward with,” he said.
“We are spending the next period of time thinking about how to position our brand with brokers and into the broader market, and we’ve got a lot of planning and execution to do before we actually roll out the brand shows.”
However, he said that for the foreseeable future, brokers would be able to distribute both MyState and Auswide banking products.
[Related: MyState Ltd to invest further in broker following merger]
