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IMB Building Society has today announced a solid result for the year ending 30 June 2012, with operating profit after tax of $30.1 million, slightly down on the last year’s result of $31.0 million.

Chief Executive, Robert Ryan said IMB’s performance was solid in a decreasing interest rate environment coupled with continued competition for deposit funds creating higher funding costs. Other challenging market conditions included a contraction in demand for credit and costs associated with an increased capital base in preparation for Basel III.

“During these ongoing uncertain times, we continue to take a disciplined approach to cost management while ensuring we are reinvesting into the business to provide our members with competitive pricing and a full-service platform,” Mr Ryan said.

“Lending approvals of $701 million were down on the previous year, reflecting the subdued housing market, however following recent rate reductions, we have seen an increase in loan applications.”

“Our residential loan book continues to perform among the best in the Australian banking sector, a view confirmed in the current quarterly review by QBE Mortgage Insurance Ltd. Credit quality remains exceptional across IMB’s secured and unsecured loan portfolios.”

“Liquidity and capital levels remain well above regulatory requirements, with liquidity at 25.6%. IMB’s capital adequacy ratio also increased from 12.0% at 30 June 2011 to 15.8% at 30 June 2012,” he said.

IMB’s Chairman Michael Cole said: “We indicated last year we had set a target capital ratio of over 15%. We have more than met that target and it is the Board’s intention that the capital ratio remains above 15%.”

“We have significantly strengthened the balance sheet to ensure we are well capitalised, having regard to regulatory requirements and volatile market conditions. We will also be looking to increase Tier 1 capital levels over the longer term, as well as supporting IMB’s mutual structure, by undertaking a series of share buybacks, the first of which is currently underway,” he said.

“The Board considers that a mutual structure will best deliver IMB’s aims of longer-term growth and viability in an increasingly competitive environment.” Mr Cole said.

Mr Ryan concluded that as IMB entered its 133rd year, it remained a strong and secure mutual financial institution.

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

The Board declared a final fully franked dividend for 2011-12 of 15.0 cents per share, taking the full year dividend to 25.0 cents. The dividend will be paid on Friday 07 September 2012.

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

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Why choose IMB Bank?

Established in 1880, IMB has been helping people achieve their financial goals for 138 years. IMB offers a full range of banking solutions including home and personal lending, savings and transaction accounts, term deposits, business banking, financial planning and can arrange a wide range of insurance and travel products.

IMB has a growing branch network throughout the Illawarra, Sydney, NSW South Coast, the ACT and Melbourne. We have a lending specialist in every branch and a team of mobile lending specialists who will come to you. IMB members enjoy access to free automated phone and internet banking and a team of professionals who are just a phone call away at our locally based call centre.

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