MyState Ltd continued to invest in distribution capacity, brand and marketing in 2021/22 as it pursued its strategy of creating scale. The results were there in terms of strong growth in lending, deposits and customer acquisition but at the cost of a drop in earnings.

MyState Bank grew its home loan book by 25.5 per cent to A$6.8 billion and its total loan book by 24.1 per cent to $6.9 billion in the year to June.

This was matched by 25.1 per cent growth in customer deposits to $5.6 billion.

The bank attracted 19,500 new-to-bank customers – an increase of 14.8 per cent over growth in the previous year.

MyState Ltd reported net profit of $32 million for the year to June – a fall of 11.9 per cent compared with the previous year. The bank accounted for $29.8 million of group earnings and wealth management $2.2 million.

Net interest income fell 1.5 per cent to $110.2 million, while income from wealth management rose 8.8 per cent to $14.8 million. Total operating income rose 1.2 per cent to $140.2 million.

The net interest margin fell 29 basis points to 1.67 per cent, reflecting competition in the home loan market.

The bank wrote off $745,000 of bad debts. This was offset by a bad debt recovery of $539,000 and a reduction if $918,000 in the collective provision, resulting in an impairment benefit of $762,000.

Operating expenses rose 9.6 per cent to $95.8 million. Personnel, technology and marketing costs all rose.

Home loan arrears (30 days or more past due) fell by 14 basis points to 41 bps.

MyState chief executive Brett Morgan said the group would continue with its current strategy, aimed at growing share in deposits, lending and funds under management.