ME Bank profit up 34 per cent

ME Bank profit up 34 per cent

Industry super-owned ME Bank has reported solid growth of its half-year profit for the second half of last year.

The bank’s net profits after tax climbed to $40.4 million in the six months to 31 December 2016, up 34 per cent on the prior corresponding period.

Over the same period of time, the bank’s home loan settlements also climbed, the bank said, reaching $3.2 billion – 54 per cent higher than the second half of the previous year.

“ME’s statutory profit after tax, which includes the amortisation of realised losses on hedging instruments, a loss on the sale of the business banking portfolio and transition costs associated with a significant new technology partnership with Capgemini, was $29.3 million,” the bank said.

“Net interest margin declined 3 basis points to 1.46 per cent relative to the previous corresponding period due to competition for new customers and higher funding costs; however, the impact on earnings was offset by increased home loan sales.”

Customer numbers also grew by 8 per cent, the bank said, reaching 393,416 by the end of the year, and recently passing the 400,000 mark in early March 2017.

“ME remains very well capitalised at 31 December 2016, with a Common Equity Tier 1 ratio of 10.40 per cent and a total capital ratio of 14.84 per cent,” the bank said.

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