A focus on greater process efficiencies has helped Heritage Bank post a record half-year profit in the six months to December 2017. Heritage's pre-tax profit for this six-month period was A$37.6 million, up 26 per cent on the $29.9 million earned in the previous corresponding period. Likewise, profit after tax was $26.3 million, up 26 per cent on the PCP.Heritage said in a media release outlining its half year result that it has "maintained its standing as the largest customer-owned bank in Australia in this period", growing its total consolidated assets by 1.5 per cent to $9.5 billion.  Prudential ratios were also strong, with the capital adequacy ratio up from 13.44 per cent at 30 June 2017 to 14.31 per cent six months later. The bank's liquidity ratio increased from 15.43 per cent to 16.45 per cent in the same period.Loan volumes totalled $801 million, a decrease of 29 per cent on the previous comparable six-month period, leading CEO Peter Lock to observe how the bank's main business had been adversely affected by APRA's imposition of caps on investor and interest-only lending, "even though the primary targets of the measures were the big banks". Lock said this was "a perfect example of the Productivity Commission's draft report into competition in the banking sector, which found that APRA's macro-prudential intervention in the home loan market was too blunt and did not take into account impacts on competition or differences between mutuals and the big banks."Retail deposit growth was also lower at $123 million, due to two main factors: a reduced need for retail funds in the subdued lending environment, and a successful foray into longer-term wholesale funding markets to raise $750 million, at favourable pricing.