Co-operative Bank grows mortgage book, gains new CEO
The Co-operative Bank's mortgage book grew by about the same as it market share in the March quarter while its profitability improved as charges against profit for bad loans receeded.
Wednesday, June 20th 2012, 4:42PM
by Jenny Ruth
The former PSIS also gained a new chief executive, Bruce McLachlan, who was previously a senior Westpac executive for the last 10 years, including nine months as acting chief executive and periods heading both the business and retail divsions.
"The potential of this business is huge," McLauchlan says, adding he really likes the fact the bank is a co-operative.
While Co-operative is clearly much smaller than Westpac, "a lot of the banking challenges are the same, regardless of scale."
The previous acting chief executive Gareth Fleming has returned to his role as marketing and products general manager.
The bank's March quarter disclosure statement shows the mortgage book grew by $9.4 million to $1.1 billion in the three months and by $54.4 million in the year ended March.
Using Reserve Bank figures as a proxy for the market, Co-operative's claimed 0.64% of mortgages written by registered banks at both March 31 and December 31.
The bank's loan-to-valuation ratios (LVRs) above 80% jumped sharply to 11.7% at March 31 from 7.03% at December 31 with most of that growth coming from loans with LVRs between 80% and 90%. The latter rose to $76.2 million at March 31 from $55 million at December 31.
Co-operative's net profit jumped to $2.26 million in the three months ended March 31 compared with $0.29 million in the same three months last year, although the costs of becoming a bank in October last year helped drag annual net profit down 20.1% to $5.59 million.
Charges against profit for bad loans fell to $0.6 million in the latest quarter compared with $1.9 million in the March quarter last year.
Net interest income fell 1.9% to $9.78 million in the latest three months and was down 7.l3% at $39.87 million in the year ended March.
Comments from our readers
No comments yet
Add your comment:
Compare Mortgage Rates
Find a Mortgage Broker
The OCR ain't going anywhere
The new Reserve Bank governor, Graeme Wheeler, predicts that the official cash rate won't by going anywhere until 2014.
This is clear from the 90-day bank bill forecast graph in the December Monetary Policy Statement. It shows clearly how over the past year forecast increases kept getting pushed down each quarter.
A year ago the bank was predicting the 90-day bill rate would be up at 4.00% by March 2014. That forecast was wound back to 3.3% in March, 3.2% three months later and is now down at 2.8%.
The good news for borrowers is that, asssuming things pan out as forecast, then home loan rates aren't likely to be going up any time soon either.