IMB Bank Reports on six month performance and progress on strategic goals

IMB Bank has made good progress on its key strategic goals, and has continued to deliver solid results in what has been a challenging period for financial institutions.

The 2016-17 financial year opened with the successful completion of the merger with Sutherland Credit Union (“SCU”). IMB Chairman, Noel Cornish, welcomed the former SCU members to the IMB community, and said that he “looked forward to IMB delivering more benefits and value across the combined membership.” The merger has taken IMB’s membership to 190,000 and assets are now in excess of $5.4bn. With an additional four branches in operation, the merger has enhanced IMB’s position as a strong mutual banking alternative to the major banks in the Sydney region.

In December 2016, a fourth off-market share buyback was completed, supporting the strategy to provide the Bank with the most effective capital structure to support growth, and to underpin its status as a strong mutual financial institution. The buyback resulted in the cancellation of 3.49 million shares at a total buyback value of $16.5 million. The Chairman advised that the buyback “had been very well subscribed and that IMB is firmly committed to conducting more buybacks, with the ultimate objective being to buy back all shares on issue over time.”

For the half year ended 31 December 2016, IMB Bank recorded a net profit after tax of $12.8million. While this is an 8% decrease on the previous corresponding period, CEO, Robert Ryan commented that this result is in line with previously communicated expectations and “is an acceptable result in the current environment, having regard to RBA rate reductions, continued competition for lending and deposits, and the effects of the initial consolidation with SCU”. 

“Results in other areas continue to point to IMB’s strengths” said Mr. Ryan. “During the period, IMB received strong support from existing and new members welcomed through the SCU merger, with total loans lifting by $237 million or 6.7%, and net deposit growth lifting by $275 million or 6.5%”. He confirmed that IMB’s capital and liquidity ratios remain well above prudential requirements and that IMB’s level of mortgage arrears continue to outperform national averages.

Within the current environment, the Chairman said that IMB Bank will continue to focus on margin management and cost control, without compromising on member experience. Mr. Ryan added that “as always, IMB remains committed to providing members with a genuine alternative to the big banks which is reflected in our competitive loan rates, high level of customer care and ongoing investment in digital assets such as internet banking, online product availability and digital payments.”

Mr. Cornish repeated the sentiment of previous communications to members, saying that “While conditions may improve in the second half and we expect our mitigating actions to take effect, the ability to achieve a profit at the 2015-16 level will be a challenge.” 

The Board has declared a fully franked interim dividend of 9 cents per share. As announced in September 2016, the Board’s dividend guideline is that while IMB’s capital adequacy ratio is above 14% and profits are maintained or increased, the Board’s current intention is to pay a full year dividend of 20 cents per share for 2016/17.  The dividend will be paid on 27th February, 2017and is payable to shareholders registered at the close of trading on that date.

Wednesday, 1 February 2017

For more information, please contact:

Louise Di Francesco 

M: 0418 617 869

E: louise@louisedifrancesco.com