IMB Bank today announced its interim financial results for the half year ended 31 December 2023.
IMB Bank’s Chief Executive, Robert Ryan, said: “Our performance in the first half highlights IMB’s financial strength and resilience amid the ongoing challenges posed by current market conditions, which are impacting margins and increasing funding costs across our industry.
“Against a backdrop of persistent inflation and ongoing cost of living pressures, we recognise that this is an uncertain period for our members, and we remain focused, as their bank, on helping them manage through these challenges. We are encouraged that to date, we are not seeing any concerning movements in the level of arrears or need for hardship assistance, with 90-day home loan arrears of 0.2% to 31 December, remaining well below long-term industry averages.
“Net profit of $12.3m, down 36% on the previous half-year profit outcome, and similarly the contraction in margin to 2.05%, are as a result of ongoing increases in the cost of funding and intense competition for home loans and deposits where there has been a marked shift of funds from lower cost transactional saving accounts to higher yield saving and term accounts.
“Given the difficult environment, we are pleased to report above-system lending growth at 9.3% and an increase in total deposits of 6.5%. These results have been supported by ongoing investment in our digital channels and marketing capabilities, which have improved IMB’s geographic reach and provide an enhanced digital experience for our members. Loan approvals of $1.035Bn is a record result for IMB Bank in an interim period.
“In the half year to 31 December, we also commenced the work to enhance our digital onboarding processes with additional layers of biometric verification and fraud detection, together with an upgrade to our digital deposit account opening platform. Once completed, these upgrades will allow members to access more of IMB products and transactional capabilities from anywhere, anytime.
“Despite the need to invest in initiatives that support IMB Bank’s, long-term competitive position, we have been disciplined about how we do this, and operating expenses increased by only 4.6%, being well controlled despite inflationary pressures.
“We achieved two important milestones in our ESG roadmap, receiving independent certification by Climate Active of IMB Bank’s carbon neutral status and seeing our first ‘Reflect’ Reconciliation Action Plan obtain endorsement from Reconciliation Australia.”
IMB said it is well provisioned for the challenging market environment, which will continue to put pressure on overall margins, operating costs, and profits. Capital adequacy and liquidity were stable at 15% and 18.5% respectively.
“We are ensuring our balance sheet settings are strong, recognising that intense competition for home lending and increasingly for deposits will continue and increased funding costs will remain a key challenge.
“IMB is prudently navigating the prevailing economic challenges and expects that margin pressure may ease slightly, particularly with the large volume of low-rate fixed loans that will adjust to the current market position, which would support an improvement in the key outcomes for the second half.
“We are focused on maintaining momentum on our strategic initiatives through which we aim to make banking simpler, safer, and digitally accessible for our members. In doing this, we are committed to enhancing the member experience, increasing IMB’s productivity, and delivering further grow in our key markets.” Mr Ryan said.
In line with the financial outcomes for the period, the Board has declared an interim dividend of seven (7) cents per share, fully franked. The dividend will be paid after the close of trading on 28 February 2024 to shareholders registered at that date.
For more information, please contact:
Karina Lamb, Res Publica
T: +61 402 128 161
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