MyState Bank expects continued strength in its home lending performance despite the coronavirus recession.
The Tasmanian-based bank’s parent company – MyState Limited – said lending momentum from the second half of 2019-20 was expected to continue into the first half of the current financial year.
“The increase in applications and settlements in the second half was largely influenced by the government’s First Home Loan Deposit Scheme,” MyState said in its annual report.
“The roll-over into financial year 2021 and top up of scheme-enabled funding will assist growth.”
MyState said 60.5 per cent of its home loan book was now outside Tasmania, while 12,000 new customers joined in 2019-20.
The home loan portfolio grew by 5.1 per cent to $5.1 billion last financial year, while deposits increased by 7.6 per cent to $3.9 billion.
Managing director and chief executive Melos Sulicich said 2019-20 had been a year like no other.
“It has been a challenging year of slow economic growth, increased competition and regulatory change, not to mention the difficulty posed by a vicious bushfire season and, finally, a global pandemic the likes of which none of us have seen in our lives,” he said.
“With all of these external issues going on around us, we continued our focus on improving our capability and culture, on simplifying, modernising and digitising the business and on our balance sheet strength.
“In doing this, we significantly reduced the cost and risk of operating despite the strong headwinds facing the sector.”
He said the company was very pleased by its 12.9 per cent increase in core operating profit before provisions and tax.
The year included a $4.9 million provision for credit losses.
Mr Sulicich said that reflected the challenges to customers resulting from the pandemic.
“There are still considerable uncertainties before us, with a very difficult economic environment and unemployment expected to rise as we come to terms with the first recession we have had in decades,” Mr Sulicich said.
Net profit after tax totalled $30.1 million, down from $31 million in the previous year.