Branch closures during the 2020/21 financial year have not had any impact on MyState Ltd’s ability to source new business.
The company closed six branches during the year, citing a growing customer preference for digital transactions in both its banking and wealth businesses.
Two of the branches were in Tasmania and four in Queensland. There was also a consolidation of some offices in Tasmania.
The Queensland branches were a legacy of MyState’s takeover of The Rock Building Society in 2011.
The closures leave MyState with no branches in the state and with just seven branches remaining in its network.
Despite its smaller physical footprint, MyState grew its mortgage and deposit books above system. The mortgage book grew 6.8 per cent over the year to A$5.4 billion, which was 1.3 times system growth. Business and personal loan balances both fell, with the result that the total loan book grew 6 per cent to $5.6 billion.
Customer deposits increased by 13 per cent, with the majority of deposit customers acquired via online channels. MyState attracted 17,000 new customers during the year.
MyState chief executive Melos Sulicich said the company achieved this growth by investing in its digital capabilities, distribution and marketing.
Digital capabilities include the introduction of artificial intelligence to generate financial management insights for customers using the MyState Bank app, the launch of a home loan retention tool and “multiple improvements” to the internet and mobile platforms.
Sulicich said the benefits of digitisation included a reduced error rate, simple and fast origination, and better analytics.
MyState reported a net profit of $36.3 million for the year to June – an increase of 20.9 per cent over the previous corresponding period. The banking division accounted for $34.9 million of group profit.
Interest income fell 12.7 per cent, while interest expense fell 41 per cent, resulting in a 12.5 per cent increase in net interest income to $111.9 million. The funding mix was helped by a big shift from term to at-call deposits, which grew 49 per cent.
The bank drew all of its $184 million RBA term funding facility allowance.
The net interest margin grew by 10 basis points to 1.96 per cent, thanks to the big fall in interest expense.
Impairments went from a $4.9 million expense in 2019/20 to a $995,000 release in 2020/21.
Since the beginning of COVID, the bank has assisted 1900 customers with loan deferrals or restructures. At 30 June 2021, it has 35 customers (accounting for 0.2 per cent of home loan balances) on some form of assistance.
The wealth division had a poor year, with income down 14 per cent.