RACQ Bank has made a welcome return to profit in the 2021 financial year, reporting a profit before tax of A$10.8 million, compared to a loss of $12.1 million in the prior year and $16.9 million in FY2019.
Total loans and advances rose to $2.038 billion, an increase of 3 per cent. Total deposits rose 1.7 per cent to $2.134 billion.
RACQ Group CEO David Carter in his report noted that “RACQ Bank’s financial performance improved considerably in FY21, contributing positively to the group’s result, and the Bank’s total capital and liquidity holdings remained strong. This was underpinned by higher net interest income, lower operating expenses and lower impairment expense.
“Member deposits increased by $93 million to $2 billion and loans and advances increased by $61 million to $2 billion during FY21. RACQ Bank funded 1776 or $448 million in home loans, and 1,265 or $32 million in personal loans.”
During the year Michelle Winzer was appointed to run the bank, with her focus to “grow the active member base while delivering market leading customer service”.
The Financial planning arm of RACQ Bank was sold during the year to focus on core banking services. Carter also observed that “RACQ Bank now saves its bank members $1 million each year after we permanently removed most everyday transaction fees on deposit products, and focused on streamlining processes to reduce the time taken to make lending decisions”.
The capital ratio remained at 15.8 per cent, whilst net interest income rose from $40.5 million to $48.4 million. The impairment loss on loans was a paltry $18,000 in the year, compared to $1.9 million in the prior year. However, the value of impaired loans, net of the impairment provision, jumped from $566,000 to $1.476 million.