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Teachers Mutual Bank sees strong growth in membership, assets, home loans

17 October 2017

Teachers Mutual Bank has achieved strong growth in assets, home loans, deposits and memberships for the 2016/17 financial year, with the bank’s asset base growing by 20.6% to $6.7 billion.

Net profit after tax of $27.9 million is marginally down on last year.  Factors impacting profitability included tighter margins, merger costs, and investment in UniBank and Firefighters Mutual Bank rebrands as well as implementing technology such as Apple, Android and Samsung Pays.  

The bank continues its excellent home loan performance in both first and third party channels, growing by 20.6% to $5.2 billion, and continues to outstrip system.  Its total loans to households grew by 19.23% compared to system average growth of 6.03%. 

This despite the investor lending moratorium that was applied at the beginning of the financial year, which restricted growth in line with the regulator’s expectations.  
“During 2016/17 we grew our membership by over 7%, half of which was achieved organically,” said Steve James, Chief Executive Officer of Teachers Mutual Bank. 

“The membership growth reflects our strong customer service culture, adoption of innovations such as Apple Pay, and our competitive products.”

In deposits from households the bank achieved growth of 17.6%, well above system which was 6.82%.  Consequently, the bank is relatively matched, with the right amount of deposits to support loan growth.

“The strong growth means better utilisation of our surplus capital, bringing capital adequacy down to 15.09%, within our targeted range,” said Steve James.

“This was topped back up with a Tier 2 capital raising of $20 million in September 2017.”

Although Teachers Mutual Bank’s cost to income ratio increased, it still compares favourably with other mutual banks. Expenses to average assets fell indicating continued efficiencies, however not sufficiently to fully offset the 20bps reduction in margin. 

“We are delighted with these results, especially in a year when we undertook another merger and restricted investment lending in line with APRA requirements,” Steve James said.  

“Our multi-brand strategy is maturing successfully. The rebranded Firefighters and UniBank brands are being exposed to new audiences and gaining members, especially via the broker channel.”

“It’s especially pleasing that our customer service has never wavered during the merger process and regulatory restrictions during the last year.  Teachers Mutual Bank continues to be recognised for its customer satisfaction, as evidenced by our high scores in independent surveys such as Roy Morgan Research; and in being named 2017 Mutual of the Year at the Australian Retail Banking Awards,” said Steve James.

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Amanda Resurreccion
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Gillian Tatt
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