Diversified financial services provider MyState Limited continued to benefit from its digital make-over, announcing a net after tax profit of A$15.1 million for the half-year to December 2019, up 5.4 per cent on the previous year."The benefits of process re-engineering and increased use of process automation, including robotics, are beginning to flow, enabling us to serve greater numbers of customers and transactions while reducing average cost," said managing director and chief executive officer, Melos Sulicich. "Income growth has outpaced expenses with the cost-to-income ratio improving 116 basis points to 64.9 per cent," Sulicich said. Net interest income increased 9.1 per cent to $48.2 million, with MyState's wholesale funding costs following the RBA cash rate downwards over the period. MyState's banking business continued with its strategy of low-risk lending to owner-occupiers with a loan-to-valuation ratio of less than 80 per cent during the half year to December 2019. Additional investment of $0.8 million was allocated to marketing, up 39 per cent on the previous corresponding period, to help grow the customer base. In December 2019, MyState was selected for the initial panel of residential mortgage lenders under the Australian government's First Home Loan Deposit Scheme. During a media call to explain the results, Sulicich disclosed that MyState had expected to lend to 200 borrowers under the scheme but has already passed that mark, and is on target to lend to 1000 borrowers, the maximum allowed to any one bank.Net interest margin improved, increased to 1.82 per cent at 31 December 2019, up 3bps on the previous half-year results. The bank reported a non-cash credit impairment expense of $0.6 million, which reflects changes in total and 90+ days arrears balances in its home loan portfolio. Sulicich said the arrears related to two large borrowers with high value loans and LVRs of 65 per cent.MyState's wealth management operations were rebranded as TPT Wealth. Revenue increased to $8.2 million, up 5.1 per cent from the previous corresponding period. Funds under management were $1.19 billion at 31 December 2019, a decade high, up 1.3 per cent on the 30 June 2019 result. MyState's balance sheet disclosed a total capital ratio of 13.2 per cent at 31 December 2019, and a Common Equity Tier 1 capital ratio of 11.4 per cent. The group's return on average equity increased to 9.3 per cent at 31 December 2019.An interim dividend of 14.25 cents per share, fully franked, was declared by the MyState board, and will become payable on 15 April 2020 to shareholders on the register at the record date of 2 March 2020, with a 2.5 per cent discount for shares issued under the dividend reinvestment plan.