1 September 2022
Heritage Bank has delivered another strong financial performance in 2021/22, including record loan volumes, to be well positioned ahead of its planned merger with People’s Choice Credit Union, CEO Peter Lock said today.
Member numbers, total loan volumes, retail deposits and total consolidated assets all grew during the year, against the backdrop of ongoing COVID disruptions, labour cost increases, and extra expenses incurred in the merger planning process.
Details of the financial results are as follows:
“Heritage’s performance was again very strong, moderating slightly from the record levels of the previous year, but remaining at a high level,” Mr Lock said.
“While profit was down slightly, we recorded growth across many of our key metrics, while continuing to invest in both our digital transformation and branch network expansion. The expenses incurred in our merger planning activities, and the rising cost of labour in a tight job market, must also be taken into account.
“While our lending approvals were at record levels, members continued to take advantage of the historically low interest rates in 2021/22 to make higher than normal prepayments on their loans, and also to repay loans in full, restraining our net loan growth.
“Nonetheless, the results were extremely pleasing and Heritage has maintained its long history of sound financial stewardship. We are well positioned financially ahead of our proposed merger.”
Mr Lock said as well as the excellent financial performance, a highlight of the 2021/22 financial year was the resumption of Heritage’s interstate branch expansion program, with the opening of two new branches in New South Wales – one at Macquarie Park in Sydney and one at Tweed Heads.
“While we constantly hear of the big banks continuing to close more and more branches, we are adding to our network,” he said.
“We understand that people want both high quality digital banking services, as well as the face-to-face service you can only get at a branch. It’s not one or the other for Heritage – we are investing in both.”
Heritage Bank Chairman Kerry Betros said the announcement during 2021/22 of the proposed merger with People’s Choice Credit Union had paved the way for a bold new chapter in the history of both the bank and the Australian financial sector.
“We believe the merger is an exciting opportunity for us to lead the creation of a new force for good in Australian banking, establishing a strong, national mutual that can stand as a true alternative to the major listed banks,” he said.
“It would be a true merger of equals, combining two proudly member-owned organisations with deep regional roots and a successful track record in member-owned banking.
"Both Heritage and People’s Choice are also fiercely committed to delivering exceptional customer service and member value. That will not change.
“The proposed merger will deliver more for our members, and provide the size and scale needed to ensure that we continue to remain competitive, to thrive and to serve our members well into the future.”
Mr Betros said the merger remained dependent on obtaining all regulatory approvals, as well as approval from the members of both Heritage and People’s Choice. The member vote is expected to take place before the end of the year.
PHOTO: Heritage Bank CEO Peter Lock and Chairman Kerry Betros