Wednesday, 26 September 2018 11:42

ME Bank boosts profits with strong growth

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Online bank ME has achieved earnings of $96.5 million for the full year 2018 — an increase of 13% on 2017 — and attributes its results to strong growth.

The industry super fund-owned bank says statutory profit after tax — which includes a realised gain on hedging instruments ($3.6 million), and spending on IT projects ($10.9 million) — was $89.1 million, up from $61.9 million in 2017.

ME chief executive Jamie McPhee said: “It is vitally important to have a bank directly aligned with the interests of customers performing strongly, particularly in the current environment.

“ME is owned by industry super funds and is charged with helping all Australians get ahead. Realising that mission is about growing our business and reaching more customers.”

McPhee said earnings growth reflected a 7% increase in the bank’s asset portfolio to $28.3 billion and higher net interest margin, up 12 basis points to 1.62%, on the previous financial year.

“Underlying earnings have grown at an annual compound rate of 19% since June 2014,” he said.

“Our home loan portfolio grew 1.3 times the industry average due to $6.2 billion in new home loan settlements.

“Customer deposits grew 17% to $14.8 billion while household deposit growth topped the industry, up 27% or nearly five times the industry average, and provided improvements to the quality of ME’s funding profile while ensuring consistently high rates of return for customers.”

 “Customer numbers grew 13% to 474,000 and have increased at an annual compound growth rate of 11% since June 2014.

“Underlying return on equity of 8.1% was in line with target. The cost-to-income ratio was 64.5%, a slight increase due to accelerated amortisation of legacy software systems.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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