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The MyState group has posted a modest annual profit despite its banking business going backwards.
The group reported revenues of $119.3 million for the 12 months to 30 June 2014, which was down 2.5 per cent on the previous year. Net profit rose 3.9 per cent to $29.6 million.
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MyState’s banking division posted a $25 million profit, which was down 0.9 per cent. MyState Financial fell 0.3 per cent to $22.3 million and The Rock declined 0.5 per cent to $2.8 million.
The group described the performance of its banking division as “relatively flat”.
“Following a disappointing first-half decline in the loan portfolio, improved second-half originations lifted portfolio growth to 0.4 per cent for the year overall,” MyState said.
“MyState Financial’s portfolio increased by 3.1 per cent to $2.2 billion, benefiting from increased levels of broker originations in the Tasmanian and Victorian markets.
“The Rock’s portfolio contracted by 5.7 per cent for the full year to $0.9 billion. However, the second half was more positive, with the portfolio increasing $5 million and 0.6 per cent following a recovery in broker originations and reduction in the level of discharges.”
MyState said the banking division’s 30-day arrears rate of 0.8 per cent remained well below industry peers and reflected the sound credit quality of its loan book.
“It is expected that competition for new business will remain fierce in 2015, and is likely to result in ongoing margin pressure,” MyState said.
“Increased originations from the broker channel will fuel improved portfolio growth. A new loan originations system is planned to provide a platform for greater service and document processing efficiency.”
The group also said that MyState Financial is in the final stages of regulatory approvals to become recognised as a bank.
This will “provide opportunity to leverage the ‘bank’ title and remove any ambiguity for our customers”, according to the group.
[Related: Ex-Westpac broker boss joins MyState as CEO]
