IMB Delivers a Solid Result for 2012/13

August 28, 2013

This is some text inside of a div block.

In a market that continues to be challenged by low consumer sentiment and strong competition for retail funds and lending, IMB Building Society has reported a solid result for 2012/13 with operating profit after tax of $28.5 million. The result is in line with Board and management’s expectations as indicated in the half-year financial results.

Chief Executive, Robert Ryan said that despite the slight decrease in net profit after tax, the underlying fundamentals of the business remained strong.

“Throughout the year we have maintained an interest margin of close to 2%, despite the cuts in official rates and continued competition in the retail funding market,” he said.

“We have continued with our disciplined approach to cost management and this has assisted in compensating for the reduction in net interest income associated with reductions in official rates and costs associated with IMB’s increased capital position.”

Excluding land development expenses, non-interest expenses were $64.5 million, the same level as last year and the efficiency ratio was 60.9%.

“Our bad debts expense for the year was $0.9 million, less than half of last year reflecting the exceptional quality of IMB’s loan book across both the secured and unsecured loan portfolios,” Mr Ryan said.

IMB’s Chairman, Michael Cole, said the Board was satisfied with the financial results for the year.

“The current economic environment, although showing signs of slight improvement, has impacted IMB’s results, particularly the lower demand for credit which has led to a reduction in our loan writings for the year.

“The financial result has also been impacted by additional costs associated with the higher capital target adopted by IMB. The Board remains committed to a target of over 15%, which ensures we are well capitalised having regard to regulatory requirements and uncertain market conditions,” Mr Cole added.

Mr Ryan concluded that as IMB entered its 134th year, it remained a strong and secure mutual financial institution supported by its loyal members.

“IMB is committed to our mutual structure, achieving its vision of being the alternative to banks and to giving our members better service and better products,” he said.

The Board declared a final fully franked dividend for 2012-13 of 15.0 cents per share, taking the full year dividend to 25.0 cents. The dividend will be paid on Thursday, 05 September 2013.

The Chairman also said “IMB’s Board is committed to the strategy of buying back the ordinary shares on issue. However, the Board has not yet determined the timing of the next buyback. It remains the Board’s intention to undertake a program of share buybacks over the medium term. The optimum timing and frequency of each buyback will be determined having regard to all relevant circumstances including that initiating a buyback action will result in a more efficient cost of capital outcome for IMB.”

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

More Market Announcements