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Heritage Bank’s focus on growth in the six months to June this year has reportedly helped deliver a 7.1 per cent growth in its mortgage portfolio over the same period, CEO Peter Lock has said.
According to the unaudited financial results for the 2015/16 year, released this week, the annualised growth in the mortgage portfolio is above the Reserve Bank’s reported system average of 6.7 per cent.
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Although the bank saw an uptake in loan approvals in the second half of the year ($970 million compared to $810 million), loan approvals as a whole were down by 3.26 per cent on last year’s levels, reaching $1.78 billion in 2015/16 compared to $1.84 billion in 2014/15.
Total consolidated assets were also marginally lower, down from $8.56 billion to $8.44 billion.
However, retail deposits grew strongly, up by $294 million (6.05 per cent) to $5.16 billion. As with loan approvals, the bank saw a rise in retail deposits in the second half of the year, growing by $183 million in the six months to June, compared to $111 in the first half of the financial year.
Mr Lock said: “Our strategy is definitely to boost our loan volumes in coming years and grow the business as a whole, bearing in mind the need to meet our prudential regulatory requirements in terms of capital.
“Our success in achieving higher growth in the latter half of the year illustrates how well we can perform when we align our organisational efforts toward a key strategic goal. That positions us well to continue pursuing our growth agenda in future.”
The unaudited figures also show a 6.46 per cent increase in pre-tax profit, rising to $51.11 million from $48.01 million. After tax, profit came in at $36.14 million, up 7.53 per cent on the $33.61 million made in 2014/15.
Chairman Kerry Betros said that the bank will continue to invest in IT improvements to “better position Heritage for the demands of the digital world” and help it grow its loan book and overall business.
“Our new corporate vision is to be passionate about helping people, and our new corporate mission is to deliver a great customer experience every time,” he said.
“That’s what we’re all about and that’s where we’re different to the big banks, whose focus is to generate financial returns for their shareholders.”
According to independent analysis by research company CANSTAR, the bank’s customers were $50 million a year better off in 2015/16 through banking with Heritage rather than one of the big four banks.
“That’s a compelling demonstration of how banking with a customer-owned organisation provides tangible benefits for our customers”, said Mr Betros.
“Because we’re customer-owned, we’re different. Not only is our goal to give customers great value, but we invest heavily back into the community. That’s what mutuals are all about.”
Heritage’s capital adequacy ratio at 30 June 2016 was 13.95 per cent and its liquidity ratio was 15.94 per cent, while the bank’s mortgage loan arrears greater than 30 days was 0.30 per cent at 30 June 2016.
[Related: Mutual bank has ‘agility and attitude’ to embrace fintech]
