Teachers Mutual Bank made some missteps with its investment in banking technology over the past year, which it can ill afford given its high cost-to-income ratio of more than 70 per cent.
In June last year it launched digital-only brand Hiver to implement a new digital banking platform. It hoped the positioning of Hiver would attract a younger cohort than currently banks with its existing brands, Teachers Mutual Bank, UniBank, Firefighters Mutual Bank and Health Professionals Bank.
But in its first year of operation Hiver attracted just 1776 members – a tiny fraction of TMB’s total membership of more than 230,000.
Then in June this year it launched a new mobile banking app that did not work properly for weeks after it went live. TMB chief executive Steve James wrote to customers a month after the launch apologising for “recent mobile banking app, internet banking and payment service outages”.
Despite these snafus, the mutual bank made progress on other fronts in 2021/22. Home loan balances grew 9.9 per cent to A$8.5 billion (compared with system growth of 7.9 per cent) and member deposits grew 7.6 per cent to $8.4 billion.
Membership grew 4.3 per cent to 230,344, although the bulk of the increase was the result of a merger with Pulse Credit Union.
Net interest revenue rose 6.5 per cent to $162.6 million. Impairment losses fell from $897,000 in 2020/21 to $765,000 in the year to June.
Expenses were steady at $138 million and the cost-to-income ratio was 76.5 per cent. The net interest margin fell 10 basis points to 1.61 per cent.
Profit after tax rose 8.2 per cent to $30.4 million.
During the year the bank bolstered its ESG credentials, attaining B Corp certification, an internationally recognised assessment of socially responsible banking credentials.