Heritage Bank caps year of milestones with 13th consecutive record


Heritage Bank has capped a year of strategic milestones by recording a 13th consecutive year of record pre-tax profit in 2011/12.

Heritage today announced a before tax profit of $44.36 million for the year ended 30 June 2012. This result represents a 1.1% increase over the previous year. The after tax profit for 2011/12 was $31.27 million, down 2.4% on the previous year.

Heritage also increased its total consolidated assets to $8.221 billion, an increase of 2.2%. This consolidated Heritage’s standing as Australia’s largest customer-owned bank.

In announcing these unaudited figures, Heritage Chairman Mr Kerry Betros said the solid financial performance came in a year in which the company achieved important strategic milestones. Mr Betros became Chairman of Heritage in June, when Mr Brian Carter retired after 30 years as Chairman.

“Heritage is extremely proud to have recorded our 13th consecutive year of record pre-tax profit despite the subdued operating environment facing all financial institutions in Australia. Heritage delivers great value for its customers and it’s no accident that we continue to post such strong economic results, year after year,” Mr Betros said.

“Importantly, we have also continued to evolve strategically and take key decisions that will better position Heritage for future success.

“The name change from Heritage Building Society to Heritage Bank last December took place seamlessly and will create greater opportunities for us going forward.

“In February, we expanded our mortgage broking network to Western Australia, Tasmania and the Northern Territory, meaning we now cover all of Australia and are a truly national competitor in the home loan market. Loan originations in those new areas have exceeded expectations, and have been particularly strong in Western Australia.

“This financial year we also opened two new branches – one in the Brisbane CBD and one in Bundaberg, which has expanded the geographic footprint of our physical network.

“Finally, we also concluded the extremely successful issue of ASX-listed Heritage Bank Retail Bonds in June this year, raising $227.5 million in funding.”

Heritage achieved a capital adequacy ratio of 12.51% and a liquidity ratio of 19.09% as at 30 June 2012, well above regulatory requirements.

Total loan approvals in 2011/12 were $1.435 billion, an increase of 5.6% on the previous year. Retail deposits grew by $358 million, a 9.7% increase.

Heritage CEO John Minz said the second half of the financial year had been particularly strong for lending, with $866 million in loan approvals in the six months to June, compared to $569 million in the first half of the financial year.

“Demand in the market was very low in the first half of the year, but increased activity, as well as Heritage’s extremely competitive rates and products, saw loan originations rebound strongly.”

Mr Minz said he was delighted that the continued strong financial performance was achieved while also maintaining excellent customer satisfaction ratings.

“The foundation of our business model and our success is our People first philosophy. As a customer-owned bank, we continue to put the interests of our customers at the top of our priority list. That is demonstrated by Heritage continuing to offer the best rates, best products and best service we can.

“It’s also reflected in the independent customer satisfaction ratings that we receive.

“In March, Canstar Blue announced Heritage as the winner of the 2012 Challenger Bank award for the most satisfied customers, ahead of ING Direct, BankSA, Suncorp, ME Bank, Bendigo Bank, Bankwest, BOQ, St. George and Adelaide Bank.

“And last month Heritage notched our 26th consecutive month with the highest customer satisfaction rating of any financial institution in Queensland, according to independent Roy Morgan Research.*

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

Mr Minz said Heritage’s continued low mortgage arrears rate was a major achievement.

“Heritage’s mortgage loan arrears greater than 30 days sat at just 0.47% at 30 June, which is an extremely low rate that is far below the industry average,” he said.

* Australians aged 14+ , 6 months to June 2012, Main Financial Institution Satisfaction, Roy Morgan Research Consumer Finance Satisfaction Survey, Queensland only

* 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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