Mortgage Portfolio

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Heritage Bank, the more than 135-year-old customer owned lender, said on Wednesday profit and loan volumes showed solid growth in the first half of the 2015/16 financial year.
Pre-tax profit for the six months to December 2015 was $25.326 million, up 9.3% on the corresponding period the previous year. Profit after tax was $17.184 million, an increase of 9.8%. 
Loan approvals grew 2.2 percent to $810.50 million for the six-month period. Retail deposits grew by $111 million, up 60% on the $69 million in the same period the previous year. 
“Heritage has a great story to tell, and we are determined to make that story better known right around Australia,” CEO Peter Lock said in the earnings announcement.
“Customers have more money in their pockets when they bank with us, instead of the big four, as shown in independent research by CANSTAR. They also get to enjoy the personal service and community-minded approach that’s part of our culture.” 
But though the total loan book grew by $21 million to $6.822 billion, the bank’s total consolidated assets fell 2.6% to $8.332 billion in the reporting period.
Capital position improved, with the bank lifting its Tier 1 capital ratio to 12.40% from 11.76% in the six months. The total capital adequacy ratio also increased to 14.04% from 13.37%. 
The liquidity ratio decreased from 19.39% to 16.77% in the same period.
Heritage chairman Kerry Betros said the results reflected the need to balance tougher prudential requirements against the need for increased funding to support lending growth. 
“We have moderated our previous high levels of liquidity to more normal levels as our lending volumes have grown,” he said. 
Mortgage loan arrears greater than 30 days sat at 0.37% of the total mortgage portfolio balance as of December-end, around a third of the industry average, the announcement said.  
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