Business

Heritage announces 'strong' profit

HERITAGE Bank today announced a strong pre-tax profit of $21.05 million for the six month period to December 2011, an increase of 5.4% over the same period the previous year.

The after-tax profit of $14.74 million was also up 1.9% on the same period last year.

Chairman Mr Brian Carter said the results came despite extremely tight market conditions and at a time when Heritage had taken important steps to position itself for future growth.

"Heritage Bank continues to develop as a modern financial institution and we have made significant evolutionary changes in the last six months that will position us better for ongoing success," Mr Carter said.

"Our name change to Heritage Bank in December last year was an important milestone. It better reflects our role and will improve our cut-through in the market place.

"Late last year we also announced the expansion of our mortgage broking network throughout Australia, making us a truly national player in the mortgage market and providing geographic diversification.  With plans also developed to open two new branches Queensland in 2012, the last six month period has been one of key strategic achievements."

Loan approvals for the half-year were $568.94 million, down 29.4% from the $806.41 million for the same period the previous year.  Retail deposits grew $205.32 million in the six-month period, compared to $183.40 million in the same period in 2010.  Consolidated assets grew 0.42% to $8.078 billion compared to 30 June 2011.

"Our loan approval levels reflect the overall contraction of the mortgage market, as well as strong competition in this sector. Our solid profit performance in this environment demonstrates the excellent financial management that is a hallmark of Heritage," Mr Carter said.

In January, ratings agency Moody's confirmed Heritage's rating of A3/P-2 with a Stable outlook, despite the decision by Standard & Poor's in December to lower its rating for Heritage.

"That rating downgrade was inexplicable to me, and to many others in the industry, particularly as Moody's reaffirmed our strong rating just a few weeks later," Mr Carter said.

CEO Mr John Minz said Heritage delivered another notable achievement in December with its highest-ever customer satisfaction rating in the monthly Roy Morgan Research Consumer Finance Survey.

Heritage's satisfaction rating of 97.1% is not only its best since the surveys began in 1996, it gives Heritage the highest satisfaction rating of any bank in Australia.

"Heritage's promise to our customers is to put People first, and our best-ever customer satisfaction rating in December clearly shows that we are delivering on that promise," Mr Minz said.

"Not only are we Australia's largest customer-owned bank, but also we have the most satisfied customers in the country."

Mr Minz said Heritage's People first philosophy was reflected in its approach to interest rates.

"In recent times there has been a scramble from many other ADIs to increase their variable home loan rates, independent of any RBA increase," he said.

"Heritage has resisted that move and kept our rates the same.  However, we will keep monitoring our margins, as well as what's happening in the marketplace, and may need to adjust our rates in future.  As always, we will be guided by the best long-term interests of Heritage and our members."

Heritage's capital adequacy ratio of 12.99% and liquidity ratio of 19.09% remain well above regulatory requirements.

The capital ratio was down slightly compared to the same period last year.

"This reflects a number of factors, including the redemption of a $35 million term subordinated debt transaction and the fact that we are still waiting on a final capital adequacy ratio standard from the Australian Prudential Regulation Authority (APRA)," Mr Minz said.

"Once APRA does release the standard and we know the requirements, we intend investigating options to issue a qualifying instrument."

Loan arrears greater than 30 days increased slightly but still represent only 0.53% of the total mortgage portfolio balance. This increase came off an extremely low base and the result is still the envy of most other banking institutions.

 

Topics:  chronicle, heritage, profit, toowoomba


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

$4 million announced for Ballina airport expansion

North Coast Nationals MLC Ben Franklin and Minister for Regional Development John Barilaro announced the funding at Ballina Byron Gateway Airport this morning.

Airport among 10 projects to receive vital infrastructure upgrades

New Ballina chamber board looks to the future

The full Ballina Chamber of Commerce board at the Ballina Coast & Hinterland Northern Star Business Excellence Awards in 2015.

A new board have been elected for the Ballina Chamber of Commerce

Bring home the bacon at Northern Rivers festival

PIGS WILL FLY: A giant pig was joined by Alstonville Lions Club’s Les Wiles and Summerland Credit Union’s Belindar Cordery and others to promote this Sunday’s Alstonville Family Festival.

Get piggy at the Alstonville Family Festival

Latest deals and offers

GAME FOR ZANE: Under-18s to honour fallen clubmate

“IT IS one of the most important days for our club. Zane died on the field doing what he loved for the club he loved."

$4 million announced for Ballina airport expansion

North Coast Nationals MLC Ben Franklin and Minister for Regional Development John Barilaro announced the funding at Ballina Byron Gateway Airport this morning.

Airport among 10 projects to receive vital infrastructure upgrades

New Ballina chamber board looks to the future

The full Ballina Chamber of Commerce board at the Ballina Coast & Hinterland Northern Star Business Excellence Awards in 2015.

A new board have been elected for the Ballina Chamber of Commerce

Bring home the bacon at Northern Rivers festival

PIGS WILL FLY: A giant pig was joined by Alstonville Lions Club’s Les Wiles and Summerland Credit Union’s Belindar Cordery and others to promote this Sunday’s Alstonville Family Festival.

Get piggy at the Alstonville Family Festival

Welcome to Northern Rivers’ first golf course of its kind

IT’S OPEN: The Ballina Disc Golf Course at Bicentennial Gardens was officially opened last week by US-born disc golf player Jesse Amos, who pushed for the course, and Ballina Shire councillor Jeff Johnson.

Reports of at least one hole-in-one already

Who wants to be an engineer?

Sparks flly as the laser cutter slices through a 3/4 in sheet of steel at Adnought Sheet metal Fabrications. Photo: Chris Ison / The Morning Bulletin

Calling young people who have thought about an engineering career

The best retro movies of the week? May 27 - June 3

Gregory Peck Photo Contributed

This week TV fan get to see Tom Cruise in a 1980s classics

Barnaby Joyce talks Johnny Depp's dogs in Tweed

Deputy Prime Minister Barnaby Joyce talks about Johnny Depp's dogs Pistol and Boo...

Road rage caught on Dashcam

Attack with a baseball bat caught on Dashcam

Video of a violent road rage incident in Orange last December.

Malcolm Turnbull and Barnaby Joyce tour Rockhampton sweet potato farm

Prime Minister Malcolm Turnbull and Deputy Prime Minister Barnaby Joyce visit a...

Perfect time to invest in Northern Rivers property

The Northern Rivers rental market is tighter than Sydney making it the perfect time for investors to get better returns out of property than superannuation or banks deposits.

Low interest rates and tight rental market are prime time to invest