Margin declines for bankmecu
Matching the market on deposit pricing took a toll on profits at bankmecu, a Melbourne-based mutual bank, over the half year to December 2012.Net profit for the half year was A$14.1 million, down from $14.9 million in the first half of the previous financial year.The interest margin fell to 2.42 per cent - down 28 basis points. The return on assets fell to 0.98 per cent from 1.10 per cent.Damien Walsh, managing director of bankmecu, said the contraction was partly a function of the falling interest rate environment and also because pricing pressure was so marked on the loan side.The bank said deposit growth over the last year was 8.6 per cent, which compares with system growth in deposits of 8.1 per cent.Loan demand increased, with the bank funding $280 million in loans over the half, 29 per cent more than in the previous period.Capital adequacy for bankmecu is among the highest in the sector at 19.56 per cent.