Tasmanian-based lender MyState Limited expects the state’s economic growth trend to continue, along with its own strong home loan growth.
“The Tasmanian economy recently reported 16 consecutive quarters of economic growth, and this positive trend is expected to continue, with the broader Australian economy also maintaining a healthy level of economic growth,” MyState said on Friday as it released its 2016-17 financials.
“While MyState’s key target market of lower risk, owner-occupied housing loans with loan to valuation ratios of less than 80 per cent remains very competitive, MyState anticipates continued above-system loan book growth.”
MyState’s statutory net profit after tax of $30.1 million was up 6 per cent compared to 2015-16, but 3 per cent less than 2015-16’s underlying net profit after tax.
“The slight reduction in earnings reflected a competitive environment and a period in which we delivered a number of very significant transformational technology projects targeted at enhancing future performance,” chief executive Melos Sulicich said.
“We expect to see operating cost reductions and revenue gains over the ensuing period as efficiency gains are delivered and we derive benefits from enhanced market opportunities.
“It is particularly pleasing to note that we continued to grow our deposit and loan book ahead of system whilst maintaining strong credit quality.
“Improved customer service and operational productivity have strengthened our brands, and staff are equipped to build relationships more effectively with customers’ banking history at their fingertips.”
Operating income was up by 1 per cent to $124.6 million.
MyState’s banking division contributed $26.3 million in net profit after tax, which was down by 3 per cent.
Mr Sulicich said its performance was sound in a very competitive environment.
“We continued with our strategy of growing the loan book and our geographic coverage, and increased market share in order to improve the scale economies of our business,” he said.
“More customers are using our internet and mobile digital channels in preference to branches, and this was a significant factor in our decision to announce the closure of our agency channel and two branches in Central Queensland.
“We will continue to leverage our technology platform and roll out new products and services in line with customer demand.”
It is understood MyState does not have plans for Tasmanian branch closures.
Its net interest margin dropped by 20 basis points to 1.93 per cent for the year.