BNK posts record loan book growth

The bank's NPAT also grew 30% year-on-year

BNK posts record loan book growth


By Mina Martin

BNK has had a transformational 2023 financial year as the company’s strategic expansion into higher margin lending is starting to deliver in a less favourable environment, according to the bank’s chief executive. 

While the bank reported a $1.5 million loss in its cash net profit after tax results, it was still a 30% jump compared to the previous finanical year. 

Combined with record-high growth in its loan books, up 37% year-on-year to $1.3 billion, and the bank achieiving cash NPAT profitability in the last quarter of the financial year, BNK looks set to continue on its pathway towards profit in FY24. 

Below are the other highlights for the 12 months ended June:

  • Deposit book at a record high of $1.3b, up 30% YoY, reflecting competitive product mix, with direct loan-to-deposit ratio of 88%
  • Net interest income of $18.8m, up 46.9% YoY
  • NIM up 6.0 basis points to 1.32%, with a year-end NIM of 1.57%
  • Higher margin lending portfolio of $195m exceeds $100m target
  • Capital adequacy ratio of 22.84%

“Our promise from a year ago to achieve cash NPAT profitability in Q4 FY23 – ahead of our initial guidance of FY24 – and our expansion into higher margin assets, were both achieved,” BNK CEO Allan Savins (pictured above) said.

By deepening its alliance with Firstmac via the expansion of the private non-bank lender’s stake in the bank to 19.9%, BNK strengthened its shareholder base.

“BNK’s specialist wholesale funding arrangement with Goldman Sachs saw the acquisition in March 2023 of $150m of these high-margin residential mortgages, which has been a key driver of our cash NPAT profitability,” Savins said.

Moving forward, the BNK chief said the bank will continue its transformation to achieve sustainable profitable growth in the current financial year, with its strong residential portfolio continuing to be the cornerstone by which to build its business.

“Our expansion into the higher margin lending space is on track, and we are targeting a further 20% of our FY24 settlements in higher margin assets,” Savins said. “We are also focused on improving the bank’s cost of funds as this is a critical measure for generating sustainable profitability and achieving our medium-term goal of >2% NIM.”

BNK also committed to continue its investment in process, services, and people to “enhance our capability in areas such as technology, risk, and financial crime and to keep pace with the changing regulatory environment.”

“BNK embarked upon an ambitious business model change in mid-2022 in a drive for sustainable profitability, and we have begun to deliver on our strategy. As we grow and evolve, we expect to keep increasing shareholder value,” Savins said in a media release.

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