A surge in fee income and net interest revenue has propelled Australian Settlements Limited to a 50 per cent leap in full year profit.
The settlements and payments services provider, which is owned by more than 20 financial institutions including Heritage Bank, Volt and IMB Bank, posted full year earnings of A$1.1 million for the 12 months to the end of June.
The result eclipsed the 2019 bottom line by $381,000 amid heightened demand from financial institutions for NPP and other payments services.
ASL’s core business is to facilitate access to payments platforms for subscriber institutions.
It provides settlement services to credit unions and small banks that transact through ATM networks, Eftpos Australia, Visa, Mastercard and the NPP.
ASL, which holds a full banking licence, is emerging as a major beneficiary of the digital payments revolution.
While most banks have experienced sharp declines in fee revenue in the last five years, ASL’s fee income has been surging.
In the 12 months to the end of June, fee revenue grew by more than $3.4 million to $16.7 million – a likely reflection of the company’s diversifying operations and escalating NPP activity.
In a brief commentary on the company’s performance contained in financial accounts lodged last week with ASIC, directors said the impact of the recent economic disruption had been limited.
“At this stage, the impact on the ASL business and results is limited, and future operations are expected to remain profitable, though there remains considerable uncertainty about the course of the pandemic and its economic effect,” the board told shareholders in the annual report.
“The company will continue to follow the government guidelines, policies and advice and endeavour to continue the ASL operations in the best and safest way possible while maintaining the health and safety of our people.”
Sydney based In1Bank, which secured a restricted banking licence last December, is the latest financial institution to join the ASL shareholder register.