Heritage Bank reports record half-year profit growth
20 February 2017
Bank has maintained excellent growth momentum in the first half of 2016/17,
posting a record half-year profit and a strong lift in lending, CEO Peter Lock
profit for the six months to December 2016 was $29.92 million, up 18.1% on the
corresponding period the previous year. Profit after tax was $20.89 million, an
increase of 17.3%.
approvals in this period totalled $1.13 billion, an increase of 39.4% on the $810.50
million achieved in the same period in 2015. As a result, Heritage’s total loan portfolio
grew by $299 million, to reach $7.362 billion.
deposits grew by $537.76 million in this period, up 385% on the $110.89 million
in the same period the previous year.
Lock said Heritage’s strong performance had come despite systemic constraints
on the mutual sector that the Federal Government now had the blueprint to
institutions like Heritage give customers great value but we’re not competing
on a level playing field with the big banks,” Mr Lock said
Senate Inquiry into Cooperatives, Mutuals and Member-Owned Firms delivered a
report in March last year outlining how to improve our competitiveness. The blueprint to fix the systemic barriers is
there – all the Federal Government has to do is implement those reforms and
give us a fairer chance to deliver better banking services to customers.”
Lock said even with these barriers, Heritage had maintained the strong growth
momentum that had been generated at the end of 2015/16, and was delivering on
its strategic goal to grow the business.
results are very strong, and reflect our success in achieving the strategic
goal of expanding our business. It’s extremely pleasing that we have had such
strong growth in our lending volumes, given the competitiveness of the
marketplace. That growth has come both through our branch network in Queensland
and through our broker partners nationwide.
will continue pursuing growth around the country as we set out to more firmly
entrench the Heritage brand as an important player in Australia’s home loan
improved profit result was aided by proceeds from the sale of Heritage’s
financial planning business to Bridges Financial Services in December, but
underlying profit remained ahead of the same period the previous year.
said the profit result reflected both the flow-through from the growing loan
portfolio and also Heritage’s success in attracting retail deposits.
offers extremely competitive term deposit rates, as we do with home loans as
well, and our ability to attract retail deposits has had a positive impact on
our margins. Growing our business helps us to continue our ongoing investment
in improving the customer experience, particularly in enhancing our digital
Loan portfolio growth helped lift total
consolidated assets by 4.5% in this period to $8.82 billion. The total capital adequacy
ratio decreased minimally from 13.95% at 30 June 2016 to 13.78% at 31 December.
The liquidity ratio also decreased slightly from 15.94% to 15.77% in the same
Chairman Mr Kerry Betros said Heritage had a
clear strategy that was driving the business forward.
“We are focused on growing our lending volumes
and our presence nationally, on the basis of delivering a great customer
experience every time. We must make the banking experience simpler and give
people better access to the modern banking channels that they expect.
“We are placing a high priority on improving
our digital banking capabilities, while retaining the people first culture and
personal service that our customers value so highly.
“We’re also committed to living up to our
vision of being passionate about helping people, by maintaining our high levels
of community support. Our seven
Community Branches have collectively put more than $40 million back into their
local communities in their history, and we support more than 120 community
events and organisations in our footprint each year. We’ve also actively raised
hundreds of thousands of dollars for charities through our annual Golf Day and
support for other charitable activities.
“Heritage is a great bank, that’s
committed to the community, and well positioned to further drive our strategy
of national growth.”
Loan arrears greater than 30 days sat at 0.42% of the total mortgage
portfolio balance, further illustrating the quality of Heritage’s loan book.