IMB Bank is reporting a $29.6 million profit after tax for the last financial year. The bank is describing the result, 9.1 per cent below the headline profit result of the previous year, as a consistent result in line with forecasts.
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And it come in a year where the Illawarra grown financial institution made the transition from a building society to a mutual bank, announced a merger with Sutherland Credit Union and made a $2.9 million profit on the sale of its head office.
IMB Bank chief executive Robert Ryan said the result was made against the backdrop of an historically low interest rate environment and intense competition for both loans and deposits. But even so IMB’s balance sheet increased by 5.0 per cent on the previous year to $5.2 billion.
Mr Ryan said loan approval levels for the year 19.1 per cent higher than the previous year at $1.011 billion. Growth in members’ deposits continued in 2015/16, with total deposits increasing by $230 million to $4.3 billion. Retail deposits grew by seven per cent during the year.
Mr Ryan said the result was supported by maintenance of the margin, lower levels of bad debts and a modest increase in expenses to allow for investment in a number of initiatives, including IMB’s digital offering which has changed significantly during the last 12 months.
That includes the launch of an online personal loan application system and a digital on-boarding and deposit account opening platform. Internet banking has also been redesigned. And IMB Bank started rolling out a new fleet of ATMs that include Smart ATMs that accept both cash and cheque deposits.
Chairman Michael Cole said IMB Bank was delighted to have completed the merger with Sutherland Credit Union on July 1, 2016 and welcomed a further 10,000 members in the Sutherland Shire.
That has added four more branches to the IMB network.
Mr Cole did warn though that following two recent RBA reductions to official interest rates and continuing pressures from competition for loans and deposits the ability to maintain profits at present levels will be challenging.
The board has declared a final fully franked final dividend for 2015/16 of 15 cents per share, taking the full year dividend to 25 cents per share.
The dividend will be paid on September 2, 2016.
The latest news comes after IMB Bank recently announced it would reduce the interest rate on its owner occupied and investment home loan standard variable rate (SVR) and business loan rates by 0.10 per cent per annum.
That coincided with the announcement of an increase of 0.60 per cent in the interest rate on a one year term deposit to 3.00 per cent.
At the time Mr Ryan said IMB Bank was committed to providing better value banking to members.
“Our Standard Variable Interest rate has been lower than that of the four major banks for more than five years,” he said.
“IMB’s new owner occupied SVR of 4.99% will now be more than 0.25% lower than the average of the major banks.
As of August 24 IMB’s new Owner Occupied SVR is 4.99 per cent per annum and the new Investment Loan SVR is 5.31 per cent.
IMB’s 1 year Term Deposit of 3.00 per cent took effect from August 19, 2016.