IMB Delivers Strong Interim Profit Result in First Half Year

Strong demand for home loans and a continued focus on costs has assisted one of Australia’s largest building societies, IMB, to deliver a strong interim result for the half year, ended 31 December 2009.

With a net profit after tax of $13.4M, an increase of 37% over the corresponding period last year, the result was influenced by IMB’s highly competitive loan product offerings, the First Home Buyers grant and a focus on the efficiency of the distribution network. Loan approvals increased to $383M, 50% above the previous corresponding period.

Due to high levels of liquidity, IMB funded loan growth partially through existing funding and was able to reduce its need to compete aggressively in the highly competitive retail deposit market. As a result, deposit growth was limited with total deposits closing at $3.16b.

IMB’s Chief Executive, Robert Ryan, said the half-year result was pleasing although he stressed cautious optimism for the recovering economy.

“IMB was in a strong position to maintain its growth and profit during the past two years of economic turbulence and I think our half-year result further confirms the organisation’s financial stability. All the signs are there that the worst is behind us and IMB is looking to positive results for our next half.

“IMB is approaching its 130^th year of providing our members with a viable alternative to the major banks. I’m particularly proud of the fact that our member satisfaction rating has increased from 95% to 97%. This rating is well above that of the major banks and undoubtedly a major contributing factor to our strong results this half-year,” Mr Ryan said.

Other factors contributing to the strong half included a focus on costs with minimal increases in expenses, resulting in the income to expense ratio down to 63.8%, compared to 69.1% in the previous corresponding period.

With liquidity at 25% and capital adequacy at 12%, these are both well above prudential limits.

During the period, merger negotiations with Community Alliance Credit Union have ceased and while disappointing, IMB continues to be interested in opportunities with other entities in the mutual sector that will complement its organic growth strategy.

Following consideration of current and expected performance and the capital needs of the business, the Board has declared an interim dividend of 10 cents per share fully franked, a 2 cents per share increase on the previous corresponding period. This dividend is payable on the 27 February 2010.

FURTHER INFORMATION:

Louise Di Francesco

VERVE

(0418) 617 869 

louised@vervecommunications.com.au