ME Bank has experienced subdued home loan growth in the financial year to 30 June 2020.
The company announced that it has settled $5.5bn in home loans during the financial year, down 15% on the previous year, with the home loan portfolio growing by only 2% to $25.5bn.
“After strong system growth in the first half of the year, overall home loan growth finished at 0.7 times system,” ME Bank said in a statement.
“In the hyper-competitive home loan market in the second half of the year, new business slowed, and we experienced outflows as a result of the ultra-low rates and large cash-backs being offered by some competitors,” said Adam Crane, acting chief executive officer at ME Bank.
“We made the decision to pursue profitable growth in this segment in order to maintain net interest margin and focus on longer-term, sustainable home loan growth.”
Adam said that, with ongoing economic uncertainty and the impacts of the COVID-19 pandemic still playing out, ME Bank will “continue to take a cautious approach to ensure we actively manage our capital, liquidity and funding.”
“Our balance sheet has strengthened during the year and we are in a strong financial position,” he said.
“The COVID-19 pandemic is causing disruption and considerable distress to many Australians. During this time, ME’s priority has been on the welfare of our people and our customers. ME is a purpose-driven organisation with a mission to help all Australians to get ahead. In the face of significant economic uncertainty and financial stress, our people have stepped up admirably to support our customers in this time of need, and we will continue to do so.”