15 September 2021
Heritage Bank delivered a record pre-tax profit of $64.4 million in the 2020/21 financial year, as the economic environment in Australia defied initial fears of a COVID-inspired downturn, CEO Peter Lock announced today.
Heritage today released details of its financial performance, revealing strong results across key metrics in 2020/21:
Mr Lock said the results reflected trends being felt across the financial services sector that have defied initial expectations of a COVID-inspired downturn.
“The emergency measures that the Federal Government put in place to offset COVID have injected significant amounts of cash into the economy,” Mr Lock said.
“With limited travel possible, and with lingering concerns about what COVID meant for the future, many people chose to put more money into savings or pay down their loans.
“At the same time, with interest rates at historic lows, investing in property grew in popularity, with real estate markets booming across the country.
“That has translated into excellent results for us and strong levels of growth.”
Mr Lock said a key to that success had been Heritage’s commitment to maintaining both face-to-face and online channels for members.
“Digital technologies are changing the way people do their banking, but we don’t agree that mass closures of branches is in the interests of members.
“People still want that personal contact and the chance to talk to someone face-to-face, as well as having access to great online banking services and apps.
“We are continuing to transform our operations and incorporate the best that digital technologies have to offer, while still delivering outstanding customer service. We call it becoming a digital bank with a personal connection
“That’s why we’re investing heavily in new technologies but also in opening two new branches in New South Wales by the end of this year – one at Tweed Heads and one at Macquarie Park in Sydney.”
Heritage Bank Chairman Kerry Betros praised the resilience of staff in helping deliver such excellent financial results while remaining focussed on serving members.
“COVID has been tough for everyone, including our staff members. That’s particularly true of our branch staff, who have had to cope with difficult and ever-changing working conditions, but have shown up every day to keep providing this essential service,” Mr Betros said.
“Throughout the COVID pandemic period our staff have remained absolutely committed to serving our members and helping them through these unusual times.”
Mr Betros said maintaining a strong and stable financial base was extremely important for Heritage in protecting the member value built up throughout the organisation’s 146-year history.
“We are continuing to transform the way our business operates, in response to the needs of our members and the changing banking environment, so that we can remain strong into the future.
“That’s why we are currently working on a core banking system replacement project, to overhaul our 40-year-old platform and develop a modern solution that delivers for members and for staff.”
The announcement of Heritage’s financial results comes mid-way through the due-diligence process on the proposal to merge with Adelaide-based People’s Choice Credit Union – a move that would create a new mutual powerhouse in the Australian banking sector.
“This is exciting news that we believe has the potential to significantly strengthen our future, so we can deliver more for our members. It would be a true merger of equals, bringing together two organisations of a very similar size, who share a commitment to mutuality and serving our members,” Mr Betros said.
“From initial discussions, we believe a merger would give us the increased size and scale needed to remain competitive in the banking sector, and create a new national force for good in Australian banking.”
The Boards of Heritage Bank and People’s Choice expect to make a decision by the end of the year on whether they will pursue a merger, after the completion of the due diligence.
If the proposal goes forward, the merger would be put to a member vote early in 2022.