Growth strategy delivers Bank Australia a successful 2015

Today Bank Australia announced its 2015 financial results, with a net profit after tax of $24 million and overall asset growth of 11%.

According to Managing Director Damien Walsh, the results are an endorsement of the bank’s growth and development strategy.

“Our deposit and loan books both grew above system which is extremely pleasing in the current low interest rate and competitive environment,” Walsh said.

Customer deposits grew by 10% and customer loans by 10%.

“Our profit result has seen the bank grow customer owned reserves by $35 million to $412 million; and with a very strong capital adequacy ratio of 20% we are well positioned to grow and provide customers with highly competitive prices, products and services in the years to come.

“The result represents a return on assets of 0.70%, which is healthy particularly given that we’ve made some significant investments in our technology, people and brand over the past year,” Walsh said.

Over and above the $24 million of after tax profit, the bank returned pricing benefits in the amount of $23.5 million to customers. Each year Bank Australia commissions Canstar to do a valuation of its pricing (rates and fees) on deposit and loan products in comparison with the average advertised rates of the four major banks.

“In 2015 I’m pleased that our customers were collectively $23.5 million better off banking with us as this is a key demonstration of the value that we can create for them by being customer owned and not having to pay dividends to external shareholders,” Walsh said.

Bank Australia attracted a record number of new customers in 2015; and has halted the increasing average age of customers, with 60% of new customers aged 39 and under.

“After a successful launch of our new name in August 2015, we will remain focussed on continuing to grow by attracting a diverse range of customers in our target market of socially aware Australians,” Walsh said.

Previously trading as bankmecu, Bank Australia is over 50 years old and is a customer owned responsible bank that retains all its profits and jobs in the country.

Highlights of Bank Australia’s 2014-15 financial performance

• Annual net profit after tax (NPAT) of $24 million represents a strong result given a tight net interest margin and the ongoing investment in customer acquisition, service delivery and technology innovation
• The net interest margin was maintained despite competitive pressures across the market
• Customer owned reserves grew to $412 million
• Capital adequacy at 20% remains very strong.
• Annual loan funding of $743 million exceeded the previous year result by 46% and assisted in contributing to overall loans growth of 10%.
• Deposits grew by 10% reflecting confidence in the bank’s unique value proposition.
• The Bank’s investment grade credit rating with Standard & Poor’s remains BBB+/Stable/A-2.

Outlook

The bank remains confident that its focused, disciplined and responsible approach to creating and distributing customer value will lead to continued growth and an appropriate level of profit.

Over the coming year the bank will continue to invest in digital technology and branding as part of a longer-term market positioning strategy to reward existing customers and attract the next generation of customers.  These investments will support an ongoing focus on simplification and enhancing our customers’ experience.  This creates a strong position for the bank to capitalise on its unique and values based approach to banking. 

Summary of Bank Australia’s 2014-15 financial performance: