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Auswide Bank Ltd (ASX: ABA), a company from the financial sector which helps the Australian citizens to achieve home ownership, create wealth, access banking & financial services, announced its half-yearly results for the period ended 31 December 2018.
During the period, the statutory net profit after tax was $8.467million which was up by 5% as compared to its previous corresponding period. The net interest income in 1H FY2019 was $31.109 million which 1.4% above its net interest income in 1HFY2018 to $30.688 million. The total operating income increased by 2.1% to $36.098 million and earnings per share increased by 0.7 cents to 20.1 cents as compared to the previous corresponding period. The underlying EPS from continuing operations decreased by 0.3 cents in 1HFY2019. However, the Interim dividend per share of 16 cents, fully franked remained constant in 1H FY2019. The Interim dividend will be payable on 25 March 2015 to those shareholders on the register at the record date of 1 March 2019.Â
In spite of the strong competition, there was a growth seen in the loan book by 4.9% to $2.982 billion as of 31 December 2018. The total home loan settlements during the period were worth $301.244 million which increased by 22.8% as compared to the prior corresponding period. The net interest margin decreased slightly during the period to 1.88% as the company faced tough competition in the home market and increased wholesale funding costs.
During the period, the company continuously made investments in the customer service team and technology. There were also additional appointments in the customer service team which included home loan sales specialists. The company expects that these investments will help the company in increasing opportunities in the 2H FY2019, by catering to the reputational issues faced by large financial institutions with the ongoing competition in the market as well as drive loan portfolio growth.
During the period, the company was able to retain a solid capital position with a consolidated capital ratio of 14.43% of which the Tier 1 capital was accounting for 12.30%. Through this strong capital position, ABA would be able to facilitate growth in the loan book. It will also create an opportunity where the company can also be benefitted through the M&A as well as fintech partnerships.
Martin Barrett who is the Managing Director of Auswide Bank stated that in FY2019, the company would be focusing on three critical areas. The first one will be to make the continuous investment in the products and services to ensure they appeal to customersâ needs. It will also include the strengthening the omnichannel self-service channels where the customers can access the products and services and the third one will be to simplify the products while automating the back-office processes.
In the last six months, the stock has generated a negative return of 1.09%. By the closure of the trading session on 15 February 2019, the closing price of the share was A$5.470 which was up by 0.183% as compared to previous trading dayâs closing price. The stock has a market capitalization of A$230.32 million and a PE ratio of 12.75x.
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