Heritage announces strong half-year results

Australia’s largest building society, Heritage, has announced a strong first half-year result, reporting a before-tax profit of $22.89 million, for the period ended 31 December 2009. This result represents a 50.6% increase over the same period in 2008/09.

During this period, the Society also reported growth in total consolidated assets of 5.0% from $7.11 billion as at 30 June 2009 to $7.47 billion for the period ended 31 December 2009.

Announcing the results, Heritage Chairman Mr Brian Carter and CEO Mr John Minz described the Society’s overall performance for the period as very pleasing given the prevailing economic conditions.

Mr Carter highlighted that the Society has continued to respond effectively to external market factors including intense competition for retail deposits, increasing funding costs, as well as the recent announcement by the Federal Government to withdraw the wholesale funding guarantee.

The Society has been successful in increasing the level of retail funding by $111.5 million during the last six months.

“I believe this strong growth in funding is a reflection of not only our focus on providing member value but also of our members’ view of the prudent business model that has been the foundation of the Society’s continuing success,” Mr Carter said.

“Heritage has been innovative and has worked hard to establish new funding sources to supplement its strong retail funding mix. Over the last six months, the Society has led the mutual sector by completing market first transactions such as the successful $400 million Government Guaranteed wholesale debt issue and more recently the $50 million ASX-listed Heritage Notes transaction.”

Mr Carter added that the Society continues to look at new opportunities to improve the funding diversity of the organisation.

Business diversity has been enhanced through the introduction of Heritage Financial Planning implemented via a joint venture between Heritage and MAP Funds Management Limited.

Mr Minz said that Heritage’s success and strong set of numbers has been reinforced by a low mortgage arrears rate.

“Loan arrears greater than 30 days represented only 0.21% of our total mortgage portfolio balance as at 31 December 2009. This result is substantially better than industry benchmarks and in the economic conditions Heritage continues to show the benefits of sustaining our high quality loan book,” he said.

He added that the first six months of the 2009/10 financial year resulted in excellent prudential and regulatory outcomes.

“As demonstrated by the strong first half-year results, the outlook for the Society remains positive.”

* Based on a $150,000 loan over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.