IMB Bank delivers improved performance for the six months to 31 December 2017

IMB Bank is pleased to announce that the group recorded a net profit after tax of $15.8 million for the half year to 31 December 2017, being a 23.4% increase on the previous corresponding period.

IMB Bank Chief Executive, Robert Ryan attributed this performance primarily to growth in the loan and deposit portfolios and the improvement in the average margin to 2.14%.

“We are very pleased with the result, however the uplift in key metrics should be considered in the context that the previous corresponding half year period was particularly challenging given the impacts of multiple rate reductions,” said Mr Ryan.

He commented that the improved half year result provides a good platform for the remainder of the year, however the result for the upcoming second half is unlikely to see performance above the corresponding comparative period to the same magnitude.

Total assets slightly increased over the six months to $5.8 billion, with growth constrained by capital management and macro prudential controls including the requirement to adhere to the regulatory cap of 10% per annum for growth in loans for an investment purpose.

Mr Ryan said “The limits set by the regulator, APRA, have seen subdued lending growth for IMB and many of our banking peers, and has required careful management to comply with our obligations, while assisting IMB’s members seeking investment loans, where possible.”

IMB Bank Chairman, Noel Cornish, commented that a successful fifth off market share buyback had been completed in December, with 2.4 million shares being bought back and cancelled at a value of $11.8 million. He said “After the most recent share buyback, the capital adequacy ratio at calendar year end was 16.2%, comfortably above IMB Bank’s stated goal of 15% and prudential requirements. We look forward to completing further buybacks, in line with the Board’s strategy to buy back all shares on issue.”

Mr Ryan highlighted the progress made on key strategic initiatives in the period to 31 December, including, he said “the establishment of a new branch at Menai, the placement of additional mobile lenders in the Central Coast and Hunter regions and ongoing digital banking enhancements, with IMB Bank the first to launch an authenticated ‘in-App’ bank messaging service for members to engage with IMB via their mobile phone.”

Mr Cornish acknowledged the announcement of the Royal Commission into Misconduct in the Banking, Insurance and Superannuation Industry and said “IMB Bank will contribute to this inquiry as required by the Commissioner, and welcomes initiatives aimed at producing better customer outcomes and confidence in the industry as a whole.”

The IMB Board has declared an interim dividend of 10 cents per share, fully franked. As previously communicated, it is expected the effective dividend payout ratio based on shareholders’ interest in contributed funding, to be between 65% to 80%.

The dividend will be paid on 27th February, 2018 and is payable to shareholders registered at the close of trading on that date.

Date: 1 February 2018