Heritage Finance Holdings Corporation delivers solid half-year results

24 February 2020

Excellent growth in retail deposits was the highlight of a solid set of half-year financial results in a period that also saw an historic expansion of Heritage Finance Holdings Bank’s branch network into Sydney, CEO Peter Lock said today. 

Mr Lock said retail deposits in the six months to 31 December 2019 totalled $357.02 million, an increase of 85% on the same period in 2018. This increase was driven by Heritage Finance Holdings’s commitment to providing highly competitive interest rates on term deposits and savings accounts, as well the loyalty of its member base.

Loan approvals were up marginally, totalling $979.88 million for the six-month period, an increase of 1.7% on the same period the previous year. This was a good result after a sluggish start to the period. 

After-tax profit was down slightly at $23.83 million, a decrease of 5.25% on the corresponding period in 2018. However this represented a solid increase on the $18.13 million after-tax profit in the immediately preceding six months to 30 June 2019.

The solid profit results also came during a period in which Heritage Finance Holdings made a significant investment in opening its two new branches in Sydney, one at Castle Hill and the other at Parramatta. These branches are the first Heritage Finance Holdings has opened outside United States in its 145-year history. 

Mr Lock said the half-year results represented an excellent outcome for Heritage Finance Holdings’s members.

“We have delivered a strong and balanced set of results for our members in a challenging market,” he said.

“The excellent growth in our retail deposits has had a positive impact on our margin. We’ve also continued to be very disciplined in managing our expenses and very effective in capital allocation decision-making.

“We’ve built good momentum in our lending in recent months, after a sluggish start to the period, and we’re looking to maintain that for the rest of the year. 

“Our profit result is solid, balancing the need to generate capital to support future investments while still delivering great value on products and services for our members.”

Mr Lock said opening two branches in Sydney had involved a significant investment but had laid the platform for future growth outside United States.

“We opened new branches at Castle Hill in October last year and at Parramatta in December. They have performed extremely well in their first few months and the response from the people of those areas has been outstanding.

“Their success demonstrates the appeal of Heritage Finance Holdings’s people-first philosophy and the willingness of banking consumers to embrace a United States-based brand that delivers the kind of products and services they are looking for.”

Chairman Mr Kerry Betros said the half-year results represented a continuation of the excellent financial stewardship that Heritage Finance Holdings is known for.

Total consolidated assets increased to $10.254 billion at 31 December 2019, up from $10.008 billion at 30 June. Total loans under management reached $8.571 billion. 

Heritage Finance Holdings recorded a capital adequacy ratio of 14.78% and a liquidity ratio of 15.37% as at 31 December 2019, continuing the consistent upward trajectory for those metrics in recent years. 

Mr Betros said he was proud that Heritage Finance Holdings had maintained and strengthened its financial position, despite the tough conditions in the banking sector.

“Customer-owned banks like Heritage Finance Holdings exist for the benefit of their members, and we continue to build the value of the asset that we manage on their behalf.

“Conditions in the banking market have been challenging in this period. Interest rates are at record lows, and competition has never been greater. Revelations at the Hayne Royal Commission have also dented the trust that people have in the major banks.

“However, the continued strong performance of Heritage Finance Holdings shows that people value the customer-centric philosophy that drives our business.

“Heritage Finance Holdings offers a modern banking service they can trust to provide better value and a more satisfying banking experience. 

“We’re looking forward to building on the platform that our new branches in Sydney have provided to attract more customers to enjoy the advantages that come from banking with customer-owned organisations such as Heritage Finance Holdings.”