Two new branches planned, as Heritage posts 12th consecutive year of record profit

Heritage Building Society plans to open two new branches this financial year as it targets growth after announcing a 12th consecutive year of record pre-tax profit in 2010/2011.

Heritage today announced a before tax profit of $43.89 million for the year ended 30 June 2011. This strong result represents a 3.7% increase over the previous year. Significantly, the before tax profit for the six months to June 30 was $23.92 million, up almost 20% on the $19.97 million recorded in the first half of the financial year.

The after tax profit for 2010/11 was $32.06 million, an increase of 7.2%.

Heritage also edged past the $8 billion milestone, with total consolidated assets increasing by 6.3% to $8.04 billion. This reinforced Heritage’s position as Australia’s largest building society.

In announcing these pre-audit figures, Heritage Chairman Mr Brian Carter said few financial institutions anywhere in the world could boast such sustained and strong financial results, especially in a period spanning the GFC.

“Heritage is an extremely strong, well managed and reliable performer which delivers great value for its members. It’s no accident that we continue to post such strong economic results, year after year.”

Heritage achieved an increased capital adequacy ratio of 14.14% and a solid liquidity ratio of 18.88% as at 30 June 2011, well above regulatory requirements.

Total loan approvals in 2010/11 were $1.359 billion, an increase of 2.8%. Retail deposits grew by $352 million, a 10.6% increase.

Mr Carter said Heritage had moderated its growth in the years following the GFC but would target a steeper growth curve this financial year.

“We have consolidated our position in recent years and still maintained substantial growth.

“Last month we finalised an $800 million securitisation issue, the largest domestic transaction in Heritage’s history and the first for five years. That has helped shore up our funding requirements, positioning us to pursue mortgage lending more strongly this year, both through branches and the mortgage broker channels.

“We plan to open two new branches this year in Queensland, as part of our strategy for growth and broadening our member base. The exact locations of the branches are yet to be finalised but these new outlets will help us stimulate continued growth into the future.”

Heritage CEO John Minz said that solid financial performance had been delivered while also achieving enviable levels of customer satisfaction.

“Heritage’s People first philosophy is the foundation on which we will continue to grow and be successful. We measure our performance not just in pure financial terms but in the value we deliver to our members.

“I’m very proud that Heritage has just notched our 14th consecutive month with the highest customer satisfaction rating of any financial institution in Queensland, according to independent Roy Morgan Research.1

“Our members love the overall package they receive from Heritage, from our competitively priced products and fairer fee structures to the outstanding customer service we provide.

“Our People first approach applies to our staff as well as our members, and that was reflected by Heritage taking out the Recommended Employer title at this year’s 2011 Australian Business Awards.”

Mr Minz said Heritage’s continued low mortgage arrears rate was a major achievement given the summer of natural disasters that has just occurred.

“The Society’s mortgage loan arrears greater than 30 days sat at just 0.40% at 30 June, which is an extremely low rate that is far below the industry average” he said.

“To achieve that against the backdrop of floods, cyclones and other natural disasters is testimony to Heritage’s prudent approach to managing its loan book.”

1 Data according to Roy Morgan Research monthly Customer Satisfaction (Queensland only) – Consumer Banking in Queensland report for 14 month period up to and including May 2011

* Home loan comparison rate based on a $150,000 loan over 25 years.  Fixed loan comparison rate applies only for loans with an LVR of 80% or less and a loan amount of $150,000 to $249,999.  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.

Interest rates are on a per annum basis. Rates are correct as stated and subject to change without notice. Rates shown are for new loans and do not apply to switches or internal refinances.

Home Advantage Variable rates include discounts shown from the Standard Variable rate. Home Advantage Living Equity rates include discounts from the Living Equity rate. Discounts are based on total lending in the package. Discount Variable LVR rates are for new lending and include discounts from the Discount Variable Loan Rate.  Discounts are not available in conjunction with any other interest rate discount or special offer. All fixed rates are fixed for the period stated and revert to the variable rate applying at expiration of the fixed term. To approved applicants only. Conditions, criteria and fees apply.

Loan to Value Ratio (LVR) is the loan amount divided by the value of your security property (determined by Heritage Bank at assessment), multiplied by 100. Owner Occupied loans have a maximum LVR of 95%, Investment loans have a maximum LVR of 80% and Living Equity has a maximum LVR of 80%. Heritage is not accepting any new investment applications until further notice.

This advice has been prepared without taking into account your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness having regard to your objectives, financial situation or needs.

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