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Teachers Mutual Bank profit up over 21%
In its first full year as a bank, Teachers Mutual Bank reports a 21.7% increase in profit for the year to June 2013, and a return on average assets of a healthy 0.72%.
Becoming a mutual bank has proved highly beneficial for the former Teachers Credit Union, which became a mutual bank in April 2012. The 2012/13 year saw the mutual bank’s total assets reach $4.09 billion, and it earned a net profit of $28.1 million.
“This is in line with our strong home loan growth, which was up by 8.95%, significantly higher than the system average at 5.72%,” said Steve James, CEO of Teachers Mutual Bank.
The mutual bank’s interest margin grew to 2.53%, up from 2.47% the previous year. “It’s particularly pleasing that we grew our margins, despite a series of interest rate decreases.”
Teachers Mutual Bank changed its funding profile as a result of becoming a mutual bank eighteen months ago. “This enabled new funding arrangements and capabilities, which have allowed us to reduce our liquidity holdings and become more efficient, thus increasing our margin in a highly competitive environment,” Steve James said.
The mutual bank’s impairment losses, which are consistently low year on year, have fallen further to 0.047% of average assets, its lowest level in over 4 years, pointing to the continuing quality of credit being written by the mutual bank.
Administration expenses increased by just 2.3%, and transaction expenses dropped by 1.9%. “We achieved savings due to process improvements, cost control and continued investment in IT and Business Intelligence,” said Steve James.
View Teachers Mutual Bank’s annual report.
Gillian Tatt, PR and Corporate Affairs Specialist, Teachers Mutual Bank on 02 9735 9825 or 0448 259 942.