MyState’s profit flatlined in financial year 2019, as the group reported it is looking to further grow its wealth management business, planning to launch a new funds management platform.
MyState recorded a net profit after tax (NPAT) of $31 million, staying somewhat steady from its $31.5 million the year before.
MyState managing director and chief executive Melos Sulicich said the company had delivered on its guidance of a full-year net profit of around $30 million, which had been boosted by the company’s exit from its retail financial planning business.
The sale of the planning segment in June, part of an effort by MyState to simplify its bank, contributed $1.2 million post-tax to the group’s profit. The bank reported the transaction now leaves the bank free to invest and grow its remaining wealth management segment.
MyState’s wealth management business produced a NPAT of $5.1 million, increasing by 11.9 per cent from the prior year.
Funds under management increased to $1.17 billion, the highest MyState has reached in a decade, and up by 1 per cent from FY18.
Funds management income came to $10.2 million, slightly up by 1 per cent while income from other fees and commissions fell by 13 per cent to $5 million.
MyState’s cost-to-income ratio increased to 64.8 per cent from its prior 62.7 per cent the year before, which it said reflected among other costs, increased investment into funds management administration and product systems.
Mr Sulicich said the bank’s digital platform is a key driver of organic customer growth outside of its traditional areas.
“In our wealth business we will soon be launching a new funds management platform that will enhance customer experience and provide an avenue for significant growth,” he commented.
Group subsidiary Tasmanian Perpetual Trustees is also expected to continue to provide further revenue as the group reshapes its funds management platform, with MyState saying it will introduce new services and improve returns for investors.
The bank added new digital services during the year, adding a full online banking proposition, including all its products.
“After a challenging start, which was adversely impacted by elevated wholesale funding costs, MyState benefited in the second half from above system lending growth, ongoing disciplined cost management and lower funding costs,” Mr Sulicich said.
Other costs the bank cited were heightened investment in marketing activities, increased competition in the banking business and higher funding costs.
Customer deposits increased 12.1 per cent to $3.7 million for the year, representing 68.6 per cent of the group’s funding mix and bolstered by strong retail term deposit growth, MyState said, particularly online origination.
The board declared a final dividend of 14.5 cents per share, fully franked and consistent with the previous year.
Earnings per share were 34.17 cents, down by 2.31 per cent.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].