Tasmanian-based MyState Bank increased its total loan book by 10.7 per cent to $5 billion during the year.

Parent MyState Limited recorded net profit after tax of $31 million.

That was down by $500,000 from the previous year, despite an after-tax $1.2 million from sale of MyState's retail financial planning business.

"After a challenging start, which was adversely impacted by elevated wholesale funding costs, MyState benefited in the second half from above system lending growth, ongoing disciplined cost management and lower funding costs," chief executive Melos Sulicich said.

The company said MyState Bank continued to focus on low-risk owner-occupied lending.

"Arrears were well below both peer and major bank benchmark indices and 90-day arrears were a historically low 0.26 per cent," it said.

Funds under management reached a decade high of $1.17 billion.

Mr Sulicich said the bank would continue "introducing new products and services that are simpler and help our customers bank the way they want".

"Our digital platform is a key driver of organic customer growth outside of our traditional heartland areas.

"This investment has simplified our processes as we develop new products and services and, with our increasing scale, is driving efficiencies in the organisation."

He said MyState expected a slower credit growth environment and increasing competition for high-quality owner-occupied lending.

" ... we will maintain our disciplined, focused strategy to build scale, control costs, carefully manage risk and leverage off our technology platform," he said.

"Additionally, we are embarking on a program of back office automation which we envisage will enable a significant change in our operating model and cost profile."

That is expected to bring relatively low-cost growth, rather than a wave of retrenchments.

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