IMB Bank - half year result to 31 December 2018

IMB Bank today announced a net profit after tax result of $15.4 million for the half year to 31 December 2018, against $15.8 million for the previous corresponding period.

The consistency of the half year result reflects a focus on maintaining sustainable financial performance while supporting IMB’s commitment to achieve business growth. 

Commenting on the performance for the half year, IMB Bank Chairman, Noel Cornish said “The result is in line with expectations. Given we have been operating in a challenging market with significant competition for loans and deposits we are satisfied with the profit outcome and broader strategic progress achieved over the half year.”

“In a very competitive market, IMB was able to increase its total assets to just under $6 billion, and grow its loan portfolio by 3.6% since June 2018. APRA recently announced the removal of growth limits relating to investor lending and while demand in this market segment has materially declined, we expect to see performance for this part of the portfolio experience some growth in the second half of the year.” 

The continued effective management of IMB’s funding base and asset book resulted in a stable average interest margin of 2.12%. 

IMB Chief Executive, Robert Ryan said “the competitive market conditions and an overall softening in demand for housing lending mean that the challenging operating environment is expected to prevail. IMB is confident it will be able to manage its performance well in these circumstances, however there will be pressure on growth in the loan portfolio and margin, meaning we remain cautious about the overall outlook.” 

With capital adequacy at 15.8% at 31 December, Mr Ryan stated, “the Board and management are ensuring a balanced approach is taken so as to maintain appropriate capital ratios while supporting IMB’s longer term success. We are enabling the development of IMB’s digital systems and payments capabilities, planning for ongoing share buybacks, and providing capacity for strategic investment, including the new head office premises and simplification of core business processes.” 

In that context, the first half of 2018-2019 saw IMB commence the execution phase of its Lending Transformation project which will enable faster online mortgage lending across all distribution channels and provide easier access to IMB’s competitive range of lending products to borrowers Australia-wide. 

Mr Ryan also announced the location of the newest branch in IMB’s Sydney geographic expansion strategy, saying “I am delighted that IMB will open its 15th branch in the greater Sydney region with the IMB Bank Rouse Hill branch to open before the end of the financial year. We look forward to welcoming existing and new members in the north-west Sydney region with a full service branch that provides retail and business banking solutions.” 

“The Board and Executive are enthusiastic about the progress achieved towards our vision to be NSW’s Leading Mutual and are committed to maintaining this momentum. We are also mindful that a strong and proactive response to changes arising out of the soon-to-be released Financial Services Royal Commission Final Report is required and we are well placed to ensure we meet the evolving expectations of our members, regulators and the broader community”. 

Mr Cornish confirmed that the Board has declared an interim dividend of 9.5 cents per share, fully franked. The effective dividend payout ratio is 75.21% of shareholders’ interest in contributed funding. The dividend will be paid after the close of trading on 27th February, 2019 to shareholders registered at that date. 

Dated: 31 January 2019