Heritage Bank has blamed a 3.9 per cent fall in full-year profit to $43.28 million on the cost of its digital transformation.
Australia’s largest customer-owned bank ended the year to June 30 with total assets of $10.09 billion, up 5.9 per cent on the previous year.
Chief executive Peter Lock called it an excellent outcome, with growth across key metrics despite a constrained operating environment.
“”Our strong and steady growth is testament to our effectiveness in meeting customer needs,” Mr Lock said.
The bank approved $1.88 billion in loans, up 8.3 per cent, while retail deposits rose 5.5 per cent to $6.94 billion.
The balance of the bank’s loan books rose 109.8 per cent to $396.15 million, and it also lifted its capital adequacy ratio from 14.11 per cent to 14.42 per cent, as well as its liquidity ratio, from 14.74 to 15.5.
Customer numbers rose by 1.8 per cent.
“We achieved positive movement in all these metrics at a time of record low interest rates and generally subdued property markets, particularly in Sydney and Melbourne, which reflects our success in improving the underlying strength of our business,” Mr Lock said.
He said the drop in profit “reflected the investment we are making in our ongoing transformation process of converting the bank toward a digital bank with a physical presence”.
But Mr Lock said the bank was still “absolutely committed” to its physical bank network, with the opening of a new branch in Coomera on the Gold Coast in late 2018 bringing the number of its branches to 60, plus three mini-branches.
Heritage will this year open its first branches outside Queensland.
The first will be in the northwestern Sydney suburb of Castle Hill in late October, while the second will open in Parramatta in mid-December.