St George Bank’s record profit announcement today of $717 million included a 25.3 per cent increase in managed funds under management to $24.8 billion and subsidiary Sealcorp growing its funds under administration by 27.6 per cent to $18.3 billion.
The net profit of $717 million for the year ending September 30 was an 18.3 per cent jump on the previous 12 month period, with the performance by Australia’s fifth largest bank at the higher end of market expectations ranging from $694 million to $722 million.
The bank said the profit result was driven largely by a 17.3 per cent increase in total receivables to $70.5 billion and a 22 per cent increase in commercial lending to $16.6 billion.
In addition, residential lending increased 16.5 per cent to $49.8 billion and retail funding lifted 6.6 per cent to $36.1 billion.
Revenue for the year was $2.57 billion, an 8.9 per cent increase on 2002/03, while cost-to-income ratio fell to 47.5 per cent from 49.6 per cent despite operating expenses increasing 4.4 per cent.
Earnings per share (EPS) for 2004 was just over $1.60 and up 13 per cent on 2002/03.
The bank is targeting a 10 per cent earnings per share growth in 2005, and double digit EPS growth for 2006, on the assumption that the Australian economy remains reasonably robust.
“We are approaching the 2005 year with confidence, as our revenue growth remains strong and we have a proven capability in driving continuous productivity improvements,” group chief executive and managing director Gail Kelly said.
Kelly also said that she expected interest rates to remain stable through 2005 although she anticipates home loan sector growth to slow, potentially leading to more competition in the industry.
However, she expected the bank to keep pace with residential lending and be ahead of system growth in commercial lending.
St George declared a fully franked final dividend of 62 cents, up from 50 cents previously, to lift total dividends for the year to $1.22 against 95 cents in the prior year.
