IMB Bank Reports Record Results for 2014-2015

August 27, 2015

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As IMB celebrates 135 years of operations and the change to IMB Bank on August 1, it has reported a strong performance for the year ending June 2015, with a result which is $3.4 million (or 11.8%) higher than the previous year’s profit result.

In a market that continues to see historically low interest rates, subdued consumer confidence and strong competition for loans and deposits, the Group operating profit after tax was $32.5 million.

This result included a profit on the sale of IMB Bank’s head office building of $2.9 million. Excluding the profit on the sale, IMB’s profit increased by $0.5 million or 1.9%.

IMB Bank CEO Robert Ryan said the increase in operating profit was supported by an improvement in net interest income during the previous year, maintenance of non-interest income levels and a modest increase in non-interest expenses.

“Despite strong competition, our average interest margin for the year was maintained at 2.04% and this reflects our strong management of interest margin and balance sheet growth.

“We expect the interest margin will continue around this level over the coming financial year, although this will be dependent on movements in official rates and pressures arising from the highly competitive deposit and lending markets.

“Bad and doubtful debts expense was $0.4 million, the lowest result for IMB more than 20 years and a significant reduction on the previous year.

“This is an excellent result, reflecting the quality of our loan book across both the secured and unsecured loan portfolios,” Mr Ryan said.

“IMB Bank’s home loan products remain some of the most competitive in the market, with our standard variable interest rate lower than that of the major banks for several years.”

Chairman Michael Cole said the Board was pleased with the financial performance and stability of IMB as a new chapter begins for the institution as a Mutual Bank.

An increase in loans was funded largely from growth in deposits, which increased by $283 million, or 7.5%, during the year, which was ahead of system growth and reflected IMB’s attractive product suite, he said.

“Retail funds grew by $160 million, or 5.7% and IMB’s liquidity ratio remains well in excess of regulatory requirements.

“In addition to our retail deposit base, IMB also has a diverse range of middle markets clients and a wholesale funding capability via a $2 billion debt issuance programme.

“In March, we completed the third of our voluntary off-market share buybacks. We have now bought back just over 8 million shares, or 20% of the shares on issue prior to the first share buyback.

“It has been an interesting period in the history of IMB as we celebrate 135 years and make the change to become IMB Bank and we look forward to an exciting future,” Mr Cole said.

A key component of IMB’s strategy during the coming period is a focus on a new digital platform, with new technologies to be introduced in the coming months.

“The banking sector has seen significant development in digital technologies in recent years,” Mr Ryan said.

“IMB has implemented, and will continue to implement, a range of initiatives to not only enhance our members’ banking experience and support our multi-channel distribution, but also provide IMB greater opportunity to grow our member base outside of our traditional ‘bricks and mortar’ representation.

“We will introduce a more efficient online deposit account opening process in the next few months, allowing both current and new members around Australia to open a new savings or investment account, on the device of their choice, in just a few minutes. We are also planning on launching an online mortgage loan process,” Mr Ryan said.

The Board declared a final fully franked final dividend for 2014/15 of 15 cents per share, taking the full year dividend to 25.0 cents. The dividend will be paid on Thursday, 03 September 2015.

IMB’s full results will be available on IMB’s website today and IMB’s Annual Report will be issued at the end of September.

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