IMB Bank chair Catherine Aston
On the back of a robust full year result, IMB Bank’s board has reminded the sector that it is wide open to merger opportunities.
“Consolidation across the mutual ADI industry remains in view as many look to grow and deal with rising technology and regulatory costs through mergers,” chair Catherine Aston and CEO Robert Ryan wrote in the introduction to the bank’s 2023 annual report.
“IMB Bank is a compelling merger partner, and our merger capability is strong, incorporating proven strategies for managing the challenges that can arise when bringing unique technology and payments systems together,” they said.
“While our organic growth strategies are performing well, we remain open to considering merger opportunities where they deliver tangible benefits for our members and their communities.”
Net profit for IMB Bank increased 23 per cent to A$36.3 million over the year to June 2023.
Assets increased by six per cent to $7.5 billion while deposits increased seven per cent to $6.5 billion.
IMB’s unusual status as a mutual ADI with external shareholders may be progressively phased out.
“The board and management are ensuring strong capital levels are maintained in preparation for the change in the regulatory capital treatment of IMB ordinary shares, which occurs on 1 January 2025,” Aston and Ryan told members and shareholders.
“As previously advised, because of amendments to the prudential standards relating to capital adequacy, IMB’s ordinary shares will not be included in IMB’s regulatory capital ratios from that date.
“The significance of APRA’s determination is that the ordinary shares cannot be viewed as an efficient form of capital as there is an outflow of dividends on an instrument that from 2025, [and] has no regulatory capital value.”
IMB declared a final dividend of 11 cents per share, fully franked, taking the full year dividend to twenty 20 cents, up from 17 cents for the prior year.