Heritage Bank has lifted its profit in 2015/16 and will leverage the momentum achieved in the second half of the financial year as a springboard to continued growth, CEO Peter Lock said today.
Heritage released unaudited financial results for the 2015/16 year showing pre-tax profit of $51.11 million, up 6.46% on the $48.01 million achieved the previous year. The after tax profit was $36.14 million, up 7.53% on the $33.61 million achieved in 2014/15.
Loan approvals were down slightly (3.26%), reaching $1.78 billion in 2015/16 compared to $1.84 billion in the previous year. Total consolidated assets were also marginally lower, down from $8.56 billion to $8.44 billion.
However retail deposits grew strongly, up by $294 million (6.05%) to $5.16 billion.
Mr Lock said a concerted focus on growth in the six months to June this year had given Heritage great momentum going forward.
“Of our loan approvals, we achieved $970 million in the second half of the year, compared to $810 million in the first. Similarly we grew our retail deposits by $183 million in the second half, compared to $111 million in the first.
“That momentum resulted in annualised growth in our mortgage portfolio of 7.1% for the second six months of the year, which was above the Reserve Bank’s reported system average of 6.7%.
“Our strategy is definitely to boost our loan volumes in coming years and grow the business as a whole, bearing in mind the need to meet our prudential regulatory requirements in terms of capital.
“Our success in achieving higher growth in the latter half of the year illustrates how well we can perform when we align our organisational efforts toward a key strategic goal. That positions us well to continue pursuing our growth agenda in future.”
Chairman Mr Kerry Betros said the results reflected the key drivers of a renewed corporate strategy that is now being implemented.
“The Board and senior executive group have worked closely together to review and update our corporate strategy this year,” Mr Betros said.
“That’s resulted in a very clear focus for us going forward.
“We will continue our program of investments in IT improvements to better position Heritage for the demands of the digital world we are now in. This will enable us to continue to grow our loan book and our overall business.
“We will also continue to live up to the ethos of our customer-owned culture. In fact, our renewed corporate strategy puts the customer even more firmly at the centre of everything we do.
“Our new corporate vision is to be passionate about helping people, and our new corporate mission is to deliver a great customer experience every time. That’s what we’re all about and that’s where we’re different to the big banks, whose focus is to generate financial returns for their shareholders.”
Mr Betros said proof of Heritage’s success in delivering for its customers was evident in the independent evaluation measures obtained during the year.
“Our Roy Morgan customer satisfaction rating at 30 June 2016 was 94.3%, the highest of any financial institution in Queensland*,” he said.
“Canstar Blue awarded Heritage the 2016 Most Satisfied Customers award in the Challenger Bank category across Australia
“We also took out the 2016 Mozo People's Choice Award for overall customer satisfaction, an award based on actual customer reviews completed throughout Australia during the year.
“In addition, independent analysis by research company CANSTAR, found that our customers were $50 million a year better off in 2015/16 through banking with Heritage rather than one of the big four banks.
“That’s a compelling demonstration of how banking with a customer-owned organisation provides tangible benefits for our customers.
“Because we’re customer-owned, we’re different. Not only is our goal to give customers great value, but we invest heavily back into the community. That’s what mutuals are all about.
“Our mutual ethos stretches back to our origins in Toowoomba 141 years ago. We’re proud to have grown into Australia’s largest mutual bank, with a national presence, but we’re equally proud to retain our headquarters right here where it all began.”
Heritage’s capital adequacy ratio at 30 June 2016 was 13.95% and its liquidity ratio was 15.94%, well above regulatory requirements. Heritage’s mortgage loan arrears greater than 30 days was 0.30% at 30 June 2016, well below the industry average.
* Roy Morgan, Consumer Banking In Queensland, Main Financial Institution Customer Satisfaction, June 2016