Strong ties with industry funds boosts ME profit
Industry superannuation fund-owned ME Bank has reported a 29 per cent rise in net profit after tax (NPAT) on the back of establishing deeper relationships with industry super fund partners.
The bank reported NPAT of $74.7 million for the 2016 financial year, and attributed it to a six per cent increase in total assets to $24.7 billion combined with stable net interest margin of 1.55 per cent.
"The Bank's Member Benefits Program, which capitalises on its unique relationship with its industry super fund and union network, grew to a record participation of more than 100 industry super funds and unions, and is now generating over 10 per cent of ME's home loan settlements," the bank said.
ME Bank settled over 16,000 new home loans totalling $4.6 billion in the 2016 financial year, with the bank settling home loans worth $2.6 billion in the second half of the year, which the bank said was a record. The bank's external brand campaign activities across television, outdoor, radio, online, social media, and cinema advertising resulted in a 10 point increase in awareness to 50 per cent, the bank said.
ME Bank chief executive, Jamie McPhee, said: "Growth has been achieved by improving systems and processes, increased brand awareness and digital capability, and a deeper relationship with our industry super fund partners". Cost-to-income ratio continued to dip, reducing 270 points to 65.8 per cent, with McPhee saying the ratio continued on its downward trajectory since June 2009 (from 84.5 per cent), and would further improve due to efficiencies gained from technology. But he said there was more work to do.
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