Heritage records jump with new broker loans

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The loans granted via the broker channel at the non-major bank rose by 26 percent as of December 31, 2020, according to their results.

Heritage Bank released its half year results for FY2021 (1HFY21) and reported a decline in the growth of its loan portfolio compared to previous periods.

The subdued growth was attributed to higher-than-budgeted repayment rates due to low interest rates and the impact of stimulus payments on the coronavirus pandemic, according to Heritage Bank.

Net loan growth of $ 59.6 million as of Dec.

Funded loans were up 14.68 percent to $ 1.064 billion in the 1st HFY21 period.

As of December 31, 2020, total loans under management had increased by $ 60 million from June 30, 2020 to $ 8.702 billion.

In the six months ended June 30, 2020, the loan portfolio was $ 71 million, from $ 8.571 billion to $ 8.642 billion, while the portfolio increased by $ 100 million in the six months ended December 31, 2019 From $ 8.4712 billion to $ 8.571 billion.

The bank made $ 595 million in loans through the broker channel in the first half of the year, an increase of 26 percent over the same period last year.

Commenting on the broker channel’s contribution, Heritage Bank Chairman Kerry Betros said:

“That was an increase of 56 percent in the corresponding period before.”

“We have made our home loan valuation process more efficient, resulting in an improved broker experience and faster turnaround times, even in times of high volume.

“The broker channel is and will be critical to Heritage Bank. While we have a network of branches in Queensland and two branches in Sydney, we rely on our broker partners to generate nationwide home loan business. “

In the retail customer deposits segment, Heritage Bank passed the € 11 billion milestone for the first time on December 31, 2020.

Heritage Bank saw retail deposits grow by $ 1.105 billion in the six months ended December 30, 2020, up 210 percent from a growth of $ 357 million for the same period in 2019.

As a result, Heritage posted total consolidated assets of $ 11.354 billion at the end of December 2020.

Meanwhile, the non-major bank posted after-tax profits of $ 23.20 million, down 2.64 percent from the same period last year.

Commenting on the overall results, Heritage Bank CEO Peter Lock said, “We are very pleased that our results exceeded the expectations we had when we set our budget for the year that COVID-19 would severely affect the economy.

“COVID was still having an impact, but not as strong as we expected.

“It is gratifying that our earnings and lending have held up well under the circumstances and disruptions. It is all the more gratifying that we were able to record such strong growth in retail customer deposits. The immediate measures that the federal government has taken to combat COVID have resulted in a lot of money flowing into the economy. “

With travel restrictions in place and uncertainty surrounding the COVID-19 crisis lingering, Mr Lock said borrowers are repaying loans faster than normal while customers choose to save instead of spend.

“With such strong deposits, we are in an excellent position to be more aggressive in credit growth for the remainder of the year,” said Lock.

“We are already offering sharper rates to expedite the acquisition, with a reduction in many of our variable home loan rates announced earlier this month.”

Mr Betros said the bank’s mortgage arrears rate was 0.31 percent as of December 31, 2020, compared to 0.40 percent on June 30, 2020.

Fortunately, COVID has not had the impact on our credit performance that we feared. In our budget for this financial year we have provided for a significant increase in loan arrears, ”he said.

“More than 95 percent of our members who received hardship assistance at the beginning of 2020 were able to return to normal repayment rules after the first six months.

“This is a great result for our members and for Heritage as a whole.”

[Related: Heritage to introduce new origination platform]

Heritage records jump with new broker loans

Mortgage business

Last updated: February 25, 2021

Published: February 26, 2021

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Malavika Santhebennonly

Malavika Santhebennonly

Malavika Santhebennur is the features editor for mortgage titles at Momentum Media.

Prior to joining the team in 2019, Malavika held positions at Money Management and Benchmark Media. She has been writing about financial services for six years.

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