Fixed rates fuel ME Bank

Underlying net profit is the profit measure pushed at ME Bank and the 2014 story is a good one.

After tax profit increased 28 per cent to A$47.4 million in the 2013/14 financial year.

CEO Jamie McPhee said the Bank achieved a home loan settlement record in June 2014 with $409 million in settlements, the first time the bank exceeded $400 million in home loan settlements in a single month.

Total on and off balance sheet assets grew nine per cent to $21.7 billion, with total loans on the balance sheet growing 19 per cent to $14.9 billion, largely driven by what the bank took to be a leading position in the fixed rate home loan market.

ME said that, since establishing its broker offering in December 2011, it had partnered with 18 of Australia's largest aggregation groups and accredited nearly 5000 brokers, delivering $1.2 billion in home loan settlements (up from $500 million the previous year).
 
Over the last financial year, ME Bank grew its customer base by ten per cent, from 284,000 at the end of June 2013 to 312,000 in June 2014. Total customer deposits grew by 17 per cent, way ahead of system growth.
 
McPhee said the bank was focused on a strong growth trajectory and home loans would continue to be the most important source of asset growth over the next three years.
 
"Since converting our business model to a more traditional balance sheet model, we've split customers into three deposit categories," he said.

"The secret is a good rate, we've been competitive" in retail, McPhee said.

"It's the same outcome for business, we priced the same."

On "super deposits", ME elbowed UBS aside on the cash hub choice platform of Australian Super. ME now stands alongside NAB on this hub and generating flows.

"We managed to get our cash hub into eight or nine super funds. The fund makes the decision to list [the bank, and] the member makes the decision on which term."

 The IT genie mostly smiled on ME's journey on to the Temenos T24 banking platform, one underpinning a plausible service story.

"The big deployment was on 14 July," McPhee said.

"The last piece in January 2015 is the home loans origination piece, so we're 90 per cent of the way through the deployment. It's a $70 million investment.

"We completed five pieces of work pretty much on scope, on time, on budget," he said.

"The last four years we built the organisational capability."