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Industry super fund-owned bank ME has said that brokers are providing over half of their home loans, and are “critical” to the bank’s growth plans.
Following the release of the members equity bank’s annual results earlier this week, which revealed that it settled $4.6 billion in the last financial year, Lino Pelaccia, general manager for broker sales at ME, said that “despite only entering the broking market five years ago, this distribution channel already provides over half ME’s home loans”.
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According to the results for the 2016 financial year, this would account for more than $2.3 billion of home loans.
Mr Pelaccia said: “Brokers are critical to ME’s growth plans and ME continues to add to its broker service.
“Recent developments with ME Broker include adding desk-based relationship managers for new-to-bank brokers; beefing up our BDM support team to quicken response times, particularly when BDMs are on the road; and establishing a credit quality team to review the paperwork as soon as we have it, so brokers get notified quickly if an application is incomplete.
“We’ve also refreshed our home loan pricing structure based on LVR and loan-size, effectively tripling our pricing options and making us competitive across all market segments, and helping to stabilise application volumes.”
New online broker portal to launch
According to the general manager for broker sales, the “most important service change” for brokers is yet to come, with the bank launching its new online broker portal in the second half of this financial year.
“This will let brokers access clients’ home loan accounts so they have more control and information about clients, both pre- and post-settlement,” he said.
In a bid to further improve the home loan application process over the coming years, ME has said it will continue to “automate and streamline the end-to-end application process, including credit assessment, valuations and settlements”, with the aim of providing same-day approval on 50 per cent of its home loan applications by the financial year 2019.
It added that part of this will involve making it easier for brokers to interact with ME in a “secure environment”, and improve engagement and efficiency for the broker network.
“Australians love using brokers and, in the same spirit, we want to make brokers love using ME,” said Mr Pelaccia.
Net Profit rises by 30%
The bank’s annual review revealed that the bank recorded a 29 per cent rise in underlying net profit in the last financial year, partly due to growth in its home loan portfolio.
According to the bank, 16,000 new home loans totalling $4.6 billion were settled in FY16, with a “record” $2.6 billion of loans settled in the second half of the year.
Of all home loans settled, 11 per cent came from the bank’s Member Benefits Program, which saw “record participation” from 106 industry super funds and unions.
A 6 per cent increase in total assets, and “stable net interest margin” of 1.55 per cent reportedly helped the bank make $74.7 million net profit.
The annual report also revealed that ME customer numbers grew 8 per cent to 365,520 in the last financial year, while customer deposits grew by 19 per cent to $10.5 billion.
ME’s statutory profit after tax was $76.8 million, down 1 per cent on the previous year. However, the bank has stated that the 2015 statutory profit was “favourably impacted by the reversal of unrealised losses on the hedge book from prior years of $28.1 million ($19.7 million after tax)”.
[Related: Top non-major lenders revealed]
