Solid Performance In First Half Sets IMB Up For Growth

MEDIA RELEASE

Friday, 28 January 2011

Increased lending and strong deposit growth have assisted one of Australia’s largest building societies, IMB, to deliver a net profit after tax of $15.1m for the half year ended 31 December 2010.

Chief Executive Robert Ryan said this represented a 12% increase over the corresponding period last year, a pleasing result given the higher cost of attracting funds and a rising interest rate cycle which had impacted on new loan demand.

“IMB’s focus on member service in conjunction with our highly competitive loan product offering enabled us to achieve loan approvals of $419.1 million, an increase of 9% above the previous corresponding period.

“We have attracted considerable interest from new members who have realised how much they can save on their home loan with IMB,” he said.

“Our high liquidity levels have contributed to an increase in lending and new deposit growth has lifted total deposits to $3.5 billion, an increase of 3.8%,” he said.

“With a raft of initiatives planned for the second half including new branches, upgrades to IMB’s internet banking and the introduction of mobile banking, we remain focused on providing members with a better value banking experience.

“Our recent member satisfaction score of 96% is evidence that our members believe we are moving in the right direction and these latest financial results provide the means to continue to meet member needs, deliver highly competitive banking solutions and support the communities in which we operate,” Mr Ryan said.

Mr Ryan said operating expenses were maintained at similar levels to the prior period at $31.9 million and this, together with the stabilisation of net interest income and low bad debts, combined to deliver a significant reduction in the expense to income ratio to 59.9% from 63.8% in the previous corresponding period.

IMB’s Chairman Michael Cole said IMB welcomed the Government’s recent initiatives in the banking sector, levelling the playing field for mutual organisations.

He said the half-year result was delivered as part of IMB’s strategic growth plan and reflected a commitment by the Board and senior management to the delivery of competitive products and services.

“Housing lending growth continues to be positive but tempered by consumer caution because of recent interest rates rises and broader economic conditions.

However, we expect interest margins will continue to be stable over the next half year.

“We are positive but cautious on the outlook for the results for the remainder of the financial year and we anticipate a solid profit for the financial year ending 30th June 2011,” he said.

Mr Cole also confirmed the continuation of IMB’s Community Foundation in 2011, with another $500,000 being pledged to sustainable community-based projects taking total Community Foundation contributions to $5.7m since its inception.

The Board has declared an interim dividend of 10 cents per share fully franked in line with the interim dividend of the previous corresponding period. The dividend will be paid on 27th February, 2011.

IMB was established in 1880 and is one of Australia’s largest building societies with more than 180,000 members.

For more information on IMB’s products visit www.imb.com.au or call 133 462.

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