Auswide Bank : 24/02/21 Auswide Bank Reports Record Growth

24 February 2021

Auswide Bank reports record growth

•  Annualised loan book growth of 13.4% across H1 FY21

•  Customer deposits up 10.6% to $2.791b; 74.4% of funding mix

•  Net Profit After Tax (NPAT) of $11.472m, up 23.9%

•  Fully franked interim dividend of 19.0cps, up 2.0cps

  All figures compare H1 FY21 to 1H FY20 unless otherwise indicated

Auswide Bank today released its half year results for the six months to 31 December 2020 (1H FY21) reporting solid growth in both loans and deposits.

Established in regional Queensland in 1966, Auswide Bank provides home loans, consumer lending, credit cards and deposits through its national online offering, branch and brokers networks.

Record Loan Growth

Auswide Bank's Managing Director Martin Barrett said despite a challenging macro environment with record low interest rates and a highly competitive market, Auswide was able to achieve annualised loan book growth of 13.4% across the half year. "At 31 December 2020, our total loan book, including investments in Managed Investment Schemes, was $3.485 billion, up from $3.216 billion. Importantly, our loan book also continues to diversify both geographically and with a younger demographic."

"Our strategic focus on delivering a highly scalable broker experience and growing broker recognition supported these increased home loan flows. Mortgage brokers continue to represent a significant growth opportunity for Auswide as third-party loans account for a larger portion of the home loan market each year."

"Our participation in the First Home Loan Deposit Scheme which offers loans to eligible first homebuyers with the government providing a guarantee for any loan monies above 80% LVR also contributed to home loan growth. The Scheme has introduced Auswide Bank to a younger customer demographic, specifically between the ages of 24-35."

"The quality of our lending portfolio and prudent risk controls were once again evident as we grew our loan book while maintaining total arrears at historic lows.''

Customer Deposits

Mr Barrett said during the half, Auswide Bank also recorded 10.6% growth in customer's term deposits, savings and transaction accounts.

"Customer deposits rose to 74.4% of total funding, allowing us to reduce reliance on other higher priced funding options. A key contributor to both loan and deposit growth is our strategy of building brand awareness through partnerships. In particular, our partnership with the

Queensland Rugby League (QRL) is lifting Auswide Bank's profile, especially across

Queensland and NSW. A focus on disciplined investment in technology is also enhancing the customer experience and supporting the transition from branch to digital channels."

Responding to COVID-19

From the start of the pandemic, Mr Barrett advised Auswide Bank had responded rapidly to requests for support from customers affected by COVID-19. "We offered a range of assistance packages including the deferral or reduction of loan repayments and the shift to interest only loans. At 30 June 2020, this represented just under 9% of the total loan book, slightly lower than the industry average reflecting the concentration of its portfolio in Queensland and low risk home loans. Since then, the majority of these customers have resumed or indicated that they intend to resume repayments at the end of their deferral period. At 31 December 2020, just 1.1% of Auswide's loan book was still receiving assistance with these mainly related to home loans with an LVR of <80%. The Board is confident the provisions set aside are sufficient to manage the uncertainty created by COVID-19 with a review of COVID-19 related provisions to be undertaken during the second half."

Interim Dividend Declared

Mr Barrett advised Auswide Bank's strong first half performance delivered net interest revenue of $38.262m, up 10.9% on the previous corresponding period. He said the bank also reported Profit After Tax (NPAT) of $11.472m which is up 23.9%.

"As a result, the Auswide Bank Board has declared a fully franked interim dividend of 19.0cps, payable on 19 March 2021, representing a 2.0cps increase on the previous corresponding period. The dividend payout ratio is 70.8%, which is in line with the Board's target of 70% - 80%."

Recent Board Change

Effective 31 December 2020, Mr John Humphrey retired as Non-Executive Director and Chairman and was succeeded by Ms Sandra Birkensleigh who has been a Non-Executive Director of Auswide Bank since February 2015. Mr Grant Murdoch joined the Auswide Board as a Non-Executive Director from 1 January 2021 and replaced Ms Birkensleigh as Chair of the Audit Committee.

FY21 Outlook

Auswide has had a strong start to the second half as loan flows continue to support loan book growth and customer deposits remain a strong source of funding.

Despite already exceeding its medium-term strategic targets, Auswide will continue to prioritise the implementation of its three-year strategic plan to further build brand awareness, improve technology, fulfil its regulatory obligations and enhance the customer experience. In addition, Auswide will continue to support its customers affected by COVID-19.

For more information:

Investors: Françoise Dixon, Citadel-MAGNUS [phone]

Media: James Strong, Citadel-MAGNUS [phone]

Auswide Bank helps Australians with an extensive range of personal and business banking products and services issued directly or in partnership with leading service providers via branches, strategic relationships and online & digital channels.

Auswide Bank believe that it's the small things that make us different and can make a big difference for our customers and communities.

Martin Barrett	Bill Schafer BCom CA
Managing Director	Chief Financial Officer and Company
Secretary
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