Auswide Bank (ASX:ABA) talks FY17 results

Interviews

by Jessica Amir

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Last Updated: 19/06/2019 2:58 PM

Commentary

• The YCU merger was a strategic acquisition for Auswide and has resulted in the realisation of financial synergies.

• Loan book growth of 4.0% achieved primarily in H2 (implementation of new LendFast origination system restricted H1 growth).

• Customer numbers increased from 79,508 at 30 June 2016 to 84,101 at 30 June 2017 (increase of 5.8%) under the appointment of Chief Customer Officer.

• Cost to Income Ratio down due to strict expense control and management.

• NIM declined by 6 basis points over the financial year - a good performance in the current environment of intense competition.

• MoneyPlace funding at $14.042m. Average net margin 7.4%.

Increasing regulatory pressures

• Introduction of initiatives around Investor, High LVR and Interest Only lending ensured that Auswide was well placed to manage lending portfolio risks well ahead of APRA tightening regulatory controls over residential mortgages.

• APRA’s announcement of ‘unquestionably strong’ capital benchmarks in July 2017 is expected to lead to an increase in Auswide’s capital requirement of around 50 basis points, however Auswide is already in a strong capital position.

• APRA’s BEAR (Banking Executive Accountability Regime) to enhance the responsibility and accountability of ADIs and their directors and senior executives, includes changes around:

- Registration of senior executives
- New APRA powers and penalties
- Remuneration. 

Jessica Amir

Finance News Network
Jessica joined FNN in January 2017 after having worked in financial advising for seven years and in TV journalism for seven years, specialising in finance, equities and analysis. She has interviewed former Prime Ministers of Australia, Tony Abbott, Julia Gillard and Kevin Rudd and ex Treasurer Jo Hockey. Jessica has worked as a journalist with Sky News Business, ABC 1, ABC's The Business, ABC24 and has also been a regional Channel 7 and 9 TV reporter with Prime7 and Win News.