Heritage announces eleventh consecutive record profit
Heritage Building Society’s 11th consecutive year of record pre-tax profit has reinforced its standing as an enduringly strong and reliable alternative to the big banks, Chairman Mr Brian Carter said today.
Heritage, Australia’s largest and most successful building society, today announced a before tax profit of $42.338 million for the period ended 30 June 2010. This strong result represents a 17.9% increase over the previous year. The after tax profit was $29.890 million, an increase of 17.2%.
Total consolidated assets grew 6.3% to reach $7.565 billion.
In announcing these pre-audit figures, Mr Carter said that such an outstanding performance in turbulent economic times demonstrated both the effectiveness of the Society’s strategic direction and the value of its mutual banking model.
“Delivering 11 consecutive years of record pre-tax profit is testimony to the enduring strength of the Heritage approach. That does not happen by accident – it’s a direct result of strong leadership and a focus on providing exceptional value to our members,” Mr Carter said.
“With the wholesale funding market tight, we accessed the Federal Government’s wholesale deposit guarantee to raise $680 million in 2009/10. We also secured $50 million in capital through the Heritage Notes issue – the first ASX listed debt transaction by a mutual ADI in Australia.
“Heritage slightly moderated its overall lending volume by withdrawing some products from the mortgage broker network. As a result, overall loan approvals were down slightly to $1.322 billion from $1.420 billion the previous year. However, mortgage lending initiated through our 59 south-east Queensland branches grew to $782.444 million in 2009/10, up 28 % from $610.531 million.
“And, having shored up our capital and funding requirements, Heritage can pursue mortgage lending more strongly this year, both through branches and the mortgage broker channels.”
Heritage CEO John Minz said Heritage’s focus on delivering member benefits set it apart from larger competitors.
“Despite strong marketplace competition, Heritage grew retail deposits by $85 million in 2009/10. We also managed the funding pressures facing all financial institutions by diversifying our revenue streams.”
Mr Minz said Heritage’s continued low mortgage arrears rate reflected the underlying financial solidity that gave customers confidence in the Society’s prudence and financial stability.
“The Society’s mortgage loan arrears greater than 30 days sat at just 0.33% at 30 June, which would make us the envy of our competitors even in the most buoyant periods, let alone the difficult economic times that we have been experiencing,” he said.
Mr Minz said the Heritage Notes transaction and the growing diversification of funding sources had helped Heritage achieve an increased capital adequacy ratio of 13.85% and an excellent liquidity ratio of 19.21% as at 30 June.
 Roy Morgan Research Consumer Finance Survey for the period to June 2010 gave Heritage a 92.4% satisfaction rating for customers who considered the Society their main financial institution