Growing well above system, The Mutual Bank in Maitland grew its expense line even faster over the year to June 2023.
The Mutual reported a 20 per cent rise in net profit to A$5.8 million over the year.
Staff costs soared 35 per cent to $10.9 million.
Mark Williams, the recently appointed CEO of the bank told Banking Day: “In the lead up to Geoff Seccombe’s retirement [at the end of June], a significant investment was made by the organisation in the executive team with several new appointments, being the chief member officer, chief of corporate services, corporate governance manager and a new chief risk officer to bring new capabilities and experience into the organisation.
“Despite this additional investment, The Mutual Bank was able to keep its cost to income ratio at 70.8 peer cent for the year ended June 2023 compared to 70.2 per cent for 2022, positioning us toward the better end of the customer-owned banking sector.
“The customer-owned banking sector is challenged by its need to invest in digital capabilities and technology as well as the increasing risk and compliance obligations and this is likely to continue.”
Asked to reflect on industry consolidation and scale Williams said the bank viewed “financial resilience and sustainability as our key indicators of financial strength rather than asset size.
“We very much believe in our strategy – we are positioned in the sixth largest banking market in Australia [the Hunter region of NSW] with a population which has increased from 620,000 to 680,000 over the last five years, as well as being based in the fastest growing local government area outside of western Sydney, and we believe there is opportunity in this growth market.
“In terms of industry consolidation, we continue to believe in our strategy, but that like all businesses, we need to remain open to possibilities given the changing operating environment.
“Our loan portfolio grew by 15 per cent, our profitability grew by 20 per cent and our cost-to-income ratio was among the better end of the sector and we will continue to focus on our financial sustainability as we move forward.”