Heritage Bank says loan approvals improve 34 percent
Heritage Bank reported an after-tax profit growth of 9.6 percent for the financial year ended June 30 over the previous year, and improved its loan approvals by 34 percent.
Its after-tax profit was $39.62 million, up 9.6% on the $36.14 million in 2015/16.
Loan approvals totalled $2.391 billion, up 34.3% on the $1.78 billion. The lender's loan approvals were down slightly in the previous financial year.
“We have been on a deliberate growth trajectory, as we look to build our loan book, retail deposits and assets. That growth will be critical for us in reshaping the business and investing more in our digital capabilities in coming years, both in the front-end and in the back office,” said CEO Peter Lock.
Nearly 50% of its loan approvals came via originations through the bank’s broker channel and Lock added that “we will continue to build our presence outside Queensland.”
Pre-tax profit growth was solid, up 10.2% to $56.31 million compared to $51.11 million the previous year.
Lock said after accounting for one-off structural items, including the gain on the sale of Heritage’s Financial Planning business, the adjusted pre-tax profit of $52.77 million was still a 3.3% increase on the previous year.
Lock said Heritage had maintained its net interest margin at a similar level as the previous year, and had slightly reduced its cost to income ratio.
Chairman Kerry Betros said Heritage’s mortgage loan arrears greater than 30 days was0.32% as at June 30.
“Compare that to the latest available Standard and Poor’s Performance Index (SPIN) industry figure of 1.16%, as at May 2017. We sit at one third of the industry average, which illustrates the continued strength of our loan book and the robustness of our credit practices,” he said.
Heritage said its capital adequacy ratio at 30 June 2017 was 13.44% and its liquidity ratio was 15.43%, well above regulatory requirements.
