IMB Bank has recorded a net profit after tax of $30.8 million, up 17 per cent, this week for the 2020/21 financial year.
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Total assets improved by 2.6 per cent to $7 billion, a new record was set for loan approvals of $1.3 billion and retail deposits grew by 14.6 per cent to $5.3 billion.
Chief executive Robert Ryan said the result was reflective of good underlying business performance.
"It is very satisfying looking back on the 2021 financial year," Mr Ryan said.
"We took advantage of the opportunities that arose through strengthening economic activity levels, we executed on a number of strategic projects and provided continuous support to our members and communities throughout periods of significant disruption.
"By delivering these strong results, we are well positioned to do what is needed to be there for our members as we again face into the impacts of one of the most significant pandemics experienced in Australia.
"We have continued to provide a range of support measures for members requiring financial assistance and are working closely with our small business members to tailor their banking arrangements to help them withstand the ever-changing market conditions.
"Our people have shown incredible resilience in keeping branches open under the highest of community restrictions and developing solutions to minimise any disruption to member service.
"We are also very proud to have been able to allocate IMB Community Foundation grants of $600,000 to support community organisations, assisting them to reach those in our areas of operation that are most in need. We are currently assessing the applications received for FY2022 grants and look forward to announcing the successful projects later in the year."
Mr Ryan said despite the disruption of the past year IMB Bank showed disciplined execution on a high volume of key strategic and regulatory change priorities.
"We brought our new lending platform to market, completed the systems integration to achieve the full benefits of the merger with Hunter United, and continued to improve our digital capabilities with enhancements to our internet banking application," he said.
"As we saw in the last financial year, our members' preferences are shifting, and we know that they want to connect with us through a combination of physical touchpoints and secure online banking options. Many that previously did their banking solely in branches are now comfortable with digital engagement and the speed and convenience of digital channels and payments tools.
"Like all ADIs, IMB Bank has also dedicated extensive resources to addressing legislative reforms flowing from both the Financial Services Royal Commission and emerging industry obligations. Many of these projects will be delivered in the first half of FY2022 and build on our proven track-record of doing what is right for our members and our commitment to continuous improvement in line with community expectations.
"In recognition of our inclusive culture and the values that underpin everything that we do at IMB, we were exceptionally proud to be awarded Employer of Choice for Gender Equality by the WGEA in FY2021.'
The key results for the 2020-2021 financial year were;
- Net profit after tax: $30.8 million, up 17 percent, reflective of good underlying business performance and the release of some provisioning raised in FY2020.
- Net interest margin: 2.13 per cent, up four basis points on the prior corresponding period, as a result of a higher proportion of retail deposit funding.
- Bad and doubtful debts: A $0.6 million reversal, which primarily incorporates a COVID-19 collective provision of $2.9 million reduced from $4 million for the prior corresponding period given economic conditions were more favourable than expected
- Capital adequacy: increased to 17.4 per cent from 16 per cent and with high quality liquid assets at 18 per cent both sit comfortably above required regulatory ratios
- Total assets: improved by 2.6 per cent to $7 billion.
- Loan approvals: A new record $1.3 billion was achieved
- Retail deposits: Grew by 14.6 per cent to $5.3 billion.
Mr Ryan said IMB's financial results for the year are reflective of its continual focus on maintaining the strength and sustainability of the underlying business.
"The improved profit outcome is because of attention given to margin management, maintenance of efficient operations and the reduction in COVID related provisioning levels based off more optimistic economic forecasts," he said.
"Total operating expenses were $110.8 million for the year. While this represents an increase of 10 per cent on the previous year, non-interest expenses as a proportion of average total assets for the group improved slightly to 1.58 per cent.
"The increase in expenses reflects the full year impact of the merger with Hunter United Employees' Credit Union as well as the costs of implementing our digital strategy which underpins our ability to compete as an alternative to the major banks.
"We are focused on maintaining our peer leading efficiency, with the ratio of non-interest expense to operating income for the group also improving to 71.5 per cent, down from 72.8 per cent for FY2020.
"We are very pleased to report that as 30 June 2021, only 0.01 per cent of the total loan portfolio was in receipt of financial hardship assistance in the form of loan repayment moratoriums arising from COVID-19, significantly down from 4.8 per cent at the previous year end.
"We recognise however, that there is likely to some deterioration in this metric, as our members call on us to support them in dealing with the challenges that are resurfacing with the unfortunate outbreak of the Delta COVID variant."
Mr Ryan said the Board has declared a final dividend of 9 cents which will be paid to registered shareholders at the close of trading on September 1, 2021.
He said that brought the full year dividend to 18 cents, which based on shareholders' interest in the contributed funding of IMB Bank, represents a 78.4 per cent payout ratio.
"In making this decision the Board has had regard to a range of factors including the level of financial performance, renewed economic uncertainty and the difficulty in forecasting the impacts of the latest COVID-19 outbreaks on the economy and the organisation."
Looking ahead Mr Ryan said the latest restrictions are affecting locations where IMB Bank has a strong presence.
"We are cautious about the rate at which the economy will re-open, with lockdowns and the success of the vaccine roll-out being key to increased levels of economic activity," he said.
"Our sustainable financial performance and proven track record of delivering on our strategic ambitions in difficult circumstances gives us confidence that IMB Bank is well placed to withstand the challenges that have resurfaced."
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