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Tasmania’s MyState Bank has reported a 6.9 per cent jump in its mortgage book — with brokers driving the majority of that success.
Continued growth in the first quarter of the 2023 financial year (1Q23) has seen Tasmanian-headquartered bank MyState Limited announce a $7.3 billion increase to its loan book, it confirmed at its MyState Limited annual general meeting on Wednesday (19 October).
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The increase, representing +6.9 per cent compared to the quarter ended June 2022, came following a strategy announced a year ago.
“All things are heading in the right direction and we’re executing on that [strategy],” MyState Limited chief executive Brett Morgan told The Adviser exclusively.
Asked what drove this increase and what part brokers played in bringing this to fruition, Mr Morgan commented: “MyState was a Tasmanian-centric bank and, as part of the growth strategy, we built [in] additional distribution, which basically meant BDMS; what we weren’t doing as well as we could have been was having conversations with brokers and sharing that there is an alternative out there [for borrowers].
“Most enjoyed [being] offer good product with good service and the ability to speak to a human.
“And so the key focus of the growth strategy, on the lending side, has been to really get more [of our] BDMS speaking to more brokers — and just letting them know we’re here and try us out.
“Generally, the response has been very, very positive and it’s gotten busy.”
Brokers at the heart of the future
“We shared in the update [MyState Limited AGM] as well that we’re targeting to grow greater than two times system over the next three years,” Mr Morgan confirmed.
“So [we’ll] continue to invest into growth and that growth will predominately come through the broker channel.
“We know customers are choosing brokers more and more — and, for us, our presence on the mainland is through our digital channels for our deposits side of the business, [and] brokers for our lending side of the business.
“We see brokers as being at the heart of the future given; again, consumers choosing brokers to help them through what is a difficult process.
“Our focus is east coast and we will continue to build our lending book through brokers.
“In Tassie, again we connect with many brokers as well.
“Across Australia and in Tassie, we also have a small branch network — but on the mainland particularly, our growth will be driven through brokers and our partnerships with brokers.”
Updated results revealed a continued positive direction
Mr Mogan’s comments followed MyState Limited’s AGM, which recapped that it’s among the fastest-growing banks in Australia measured by home loan book growth, and reported increased market share and sound underlying profitability as per its 2022 annual general meeting (18 August).
At its October announcement, the bank announced its Q1 FY23 update, which confirmed its home loan book again showed above-system growth, up 6.9 per cent to $7.3 billion.
Additionally, its customer deposits rose 10.1 per cent to $6.1 billion, while its 30-day home loan book arrears proved steady at 0.41 per cent, considerably below industry benchmarks, it highlighted.
In terms of financial performance (compared to 30 September 2021 quarter), My State reported: a net profit after tax up by 41 per cent to $9.7 million; its return on equity is improving, up 235 bps to 9 per cent; and the cost-to-income ratio continues to reduce, down 698 bps to 65 per cent, it confirmed.
What’s the percentage split directly attributed to the growth through brokers?
“The majority of that growth is through the broker channels,” Mr Morgan confirmed.
“It’s both the fact that consumers are more and more comfortable with brokers because [of] the service they offer and the ease that they provide to people who don’t get into the process too often.
“So one is, a customer chooses to go through brokers — it’s the obvious channel for us to partner with brokers.
“Secondly, that just becomes our channel given… for us… we choose to partner with brokers [on the mainland].
“And as long as we continue to provide a good service proposition and quality product [we] will be a great option for brokers to continue to use.”
No set broker alignment at MyState
Asked if there were any specific type or aligned broker or company used, Mr Morgan commented: “Any broker who’s credited can choose to submit a deal to MyState, so we partner widely but we’re not with any specific broker group or broker.
“The other interesting thing is that as a $7.3 billion home-lending bank [we’re] relatively small, but we’re big enough to deliver but still small enough to care, so you still get the human touch when you speak to our team.
“And we’re excited about what we’ve delivered and what we’re going to do in future.”
[Related: MyState loan book lifts $1bn]
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