MyState posts modest result
Tasmanian-based financial services group MyState Limited has reported a 11.7 per cent rise in net profit after tax (NPAT) for the year to 30 June, despite a suffering a reduction in new business for its 2011 acquisition, The Rock Building Society.
Finishing the year at $28.5 million (normalised after adding back acquisition costs of $2.1 million for The Rock Building Society), the group managed to cut its cost-to-income ratio to 68.3 per cent, compared with 70.3 per cent for the 2012 financial year, managing director John Gilbert said.
“Meanwhile, good progress was made with the upgrade of our core banking system, which will become operational later this year, providing the platform [with the ability] to further increase productivity and reduce costs,” he said.
MyState Financial saw an after-tax profit of $22.3 million, up by 8.5 per cent on last year’s results, with loan portfolio increasing by 4 per cent to $2.1 billion.
For its first full year contribution the group’s results, The Rock reported an after-tax profit of $2.9 million, down from $3.3 million last year.
According to MyState, the business was impacted by a significant reduction in new business from the third party broker channel due to price and product competition, which resulted in a 9.7 per cent reduction in the loan portfolio to $0.9 billion.
“Slowing demand for credit and pressure on margins, driven by declining interest rates and competition for new business, resulted in a very challenging year,” Gilbert said.
MyState directors said that the coming financial year would be another challenging one for the banking and wealth management industries, with signals from Australian businesses - and the Reserve Bank of Australia’s interest rate reductions over the past two years - suggesting a lack of confidence in the economy’s growth.
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