Heritage Bank boosts profits and loan volumes

Heritage half year financial results

Heritage Bank has boosted both profits and loan volumes to post solid results for the first half of the 2015/16 financial year, CEO Peter Lock announced today.


Pre-tax profit for the six months to December 2015 was $25.326 million, up 9.3% on the corresponding period the previous year. Profit after tax was $17.184 million, an increase of 9.8%.


Loan approvals totalled $810.50 million for the six-month period, up 2.2% on the corresponding period in 2014.  Retail deposits grew by $111 million in this period, up 60% on the $69 million in the same period the previous year.


Mr Lock said that as well as strong financial results, Heritage continues to deliver great value for customers with a continuous focus on improvement for customer service.


“Our results reflect Heritage’s focus on providing value for customers, while also expanding the business,” he said.


“Growth in both profits and loan volumes in a hugely competitive sector is very pleasing, and we will be continuing to pursue further growth.


“Heritage has a great story to tell, and we are determined to make that story better known right around Australia.


“Customers have more money in their pockets when they bank with us, instead of the big four, as shown in independent research by CANSTAR.


“They also get to enjoy the personal service and community-minded approach that’s part of our culture.


“We’re also a leader in payments technology. We were one of the first banks in Australia to develop our own mobile payments app, and we partner with companies including Optus, Qantas and Australia Post on products that need our payments expertise.


“You get the best of all banking worlds here at Heritage and that’s a compelling springboard for growth.”


While total consolidated assets were down slightly, decreasing 2.6% from $8.557 billion to $8.332 billion in the six months period, the capital position improved. Heritage lifted its Tier 1 capital ratio from 11.76% to 12.40% in this six months. The total capital adequacy ratio also increased from 13.37% to 14.04% reflecting a strong focus on capital and balance sheet management. The liquidity ratio decreased from 19.39% to 16.77% in the same period as a result of a more active approach to liquidity management in line with business volumes.


Heritage Chairman Mr Kerry Betros said the results reflected the need to balance tougher prudential requirements against the need for increased funding to support lending growth.


“We have moderated our previous high levels of liquidity to more normal levels as our lending volumes have grown. While our total assets reduced slightly in this period, our total loan book grew by $21 million to $6.822 billion.”


“We have strategies in place to manage the balance successfully, so we can build and grow a strong and prudently managed business,” Mr Betros said.


Mr Betros said the quality of Heritage’s loan book continued to be a strength.


Mortgage Loan arrears greater than 30 days sat at just 0.37% of the total mortgage portfolio balance at 31 December 2015, around a third of the industry average.  


“We are in great shape and I’m very optimistic about the future and the strategies we are currently working on,” Mr Betros said.



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