ME Bank says mid-year profit up 8 percent, forecasts further growth

ME Bank says mid-year profit up 8 percent, forecasts further growth
ME Bank says mid-year profit up 8 percent, forecasts further growth

Industry super fund-owned bank ME reported a rise of 8 percent in underlying net profit for the six months ended December 31, 2015 at $30.2 million on the previous corresponding period and forecast further profit growth in the second half. 

“Net interest margin in the next six months will benefit from recent rate increases following regulatory capital changes imposed on the banking sector, although this will be partially offset by the increased cost of funding that is putting current margins under pressure,” ME CEO Jamie McPhee said in a media release. 

ME’s statutory profit after tax, which includes gains on hedging instruments, was $34.5 million (HY15:$39.1 million). Net interest income rose 9 percent to $149.3 million.

But the bank's total operating expenses were up 7 percent to $133.2 million due to its investments in technology and the brand.

It said brand awareness rose 11 points to 51 percent since the bank rebranded in July 2015, resulting in customer numbers growing to 347,000.

ME’s new mobile app, launched in July 2015, has increased mobile-based transactions threefold.

The bank is close to finalising the technical infrastructure to display industry super member balances on its online and mobile banking platforms through a joint partnership with Link Group, it said.

The bank launched co-branded low-rate credit cards with AustralianSuper, Hostplus, and Cbus in late 2015, which are being marketed directly through the funds. 

McPhee said more regulatory changes were required in 2016 to further level the playing field between the regional and major banks, including the amount of capital held by the advanced model banks.

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Company Profit Banking Sector

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