People First Bank CEO Peter Lock on Friday
Earning as much profit over the half year to December 2023 as it did over the full year to June 2023, the newly rebranded People First Bank has made a decent fist of its first year since the biggest merger in Australian mutual banking history.
People First said it recorded a net profit of A$31 million over the half year. Its NPAT was $32 million over the full year.
Loans and advances increased 2.7 per cent over the half year to $19.6 billion, a little ahead of system. Total assets at December were $25 billion.
People First Bank is the recently introduced name for the merged Heritage Bank (based in Toowoomba) and People’s Choice Credit Union (based in Adelaide).
The new People First Bank logo is initially being introduced through the bank’s high-profile sponsorship of the People First Bank stadium on the Gold Coast and its long-term Western Bulldogs AFL team partnership.
Its two existing retail brands remain in the market while the brand transition is completed.
“We anticipate the rebranding of People’s Choice will be largely completed by the end of this year, with Heritage Bank to follow, consistent with the integration of our products and technology,” CEO Peter Lock said.
There is a vast amount of work still to be undertaken for People First to begin to fully realise the synergies and savings from amalgamating the two banks.
“We’re not at the stage of booking merger savings yet,” Lock told Banking Day.
“It’s only when you move to single systems, when you start to get to significant savings.
“We’re moving through that now - for example, payroll and finance.”
The biggest and most sensitive project will be the transition to a single core banking system.
“The main spine that moves over, that will take a couple of years to do,” Lock said.
The bank will be using Fiserv’s Signature platform, already rolled out (pre-merger) by People’s Choice.
“Independently, that was the one that Heritage chose to move to before the merger.”
One priority tech project in the early days of testing is a snazzy new (unified) banking app powered by Backbase. If all goes well this will be in market around September.
Commenting on trading conditions, Lock said: “the NIM, we’re keeping it steady but the indications are that it will be under pressure.
“We pulled back in cashbacks [on home loans].
“It was a tricky slope on that one, while always maintaining competitive prices.
“The mortgage cliff hasn’t really played out fully yet.
“We’re seeing a very slight pick-up in arrears, probably in 60 days and not transitioning to 90 says, from a very low base.
“Deposits are going well, though most of that deposit flow goes into higher yielding at-call accounts.”
People First Bank, Lock said, “is a national bank now. The dual head office structure works.
“There’s no reason we can’t be Australia’s first member-owned bank to have a million members.”