St George Bank profit highlights

• Net profit for the year to September was $1.163 billion, an increase of 11 per cent over 2006. After adjusting for hedge fund accounting, cash profit was $1.160 billion, an increase of 13.1 per cent over the previous year.
• Earnings per share rose 11.8 per cent from 195.8 to 218.9 cents. The final dividend was 86 cents a share, up 11.7 per cent.
• Return on equity rose from 22.9 to 23.2 per cent but return on assets fell 1.05 to 1.04 per cent. Risk weighted assets increased by 19 per cent.
• The expense to income ratio fell from 44 to 42.5 per cent.
• The net interest margin contracted by 10 basis points from 2.11 to 2.01 per cent. The bank said it expects margin contraction to continue at a rate of about 10 basis points a year.
• The retail banking division made the biggest contribution to overall earnings, at 46 per cent. The division's revenue was up nine per cent and profit before tax of $773 million was 10 per cent higher than the previous year.
• Wealth management had the biggest pre-tax profit growth, up 21 percent. Pre-tax profit for institutional and business banking was up 15 per cent.
• Credit quality was sound. Gross non-accruals to net receivables was seven basis points, compared to an average of 20 basis points for the major banks.
• Specific provisions for bad and doubtful debts rose 28 per cent from $121 million to $155 million. Bad and doubtful debt expense as a percentage of average assets rose from 0.14 to 0.16 per cent.
• The capital management program includes plans for an underwritten divided reinvestment plan that is expected to raise $458 million and a non-innovative tier one issue expected to raise $400 million.
• APRA granted St George approval to manage the bank on a slightly lower core capital ratio of 6.5 per cent down from 6.7 per cent previously.