TMB reports triple-system mortgage growth

Teachers Mutual Bank Ltd (TMB Ltd) – which includes Teachers Mutual Bank, UniBank, Health Professionals Bank and Firefighters Mutual Bank – has released its annual results, reporting 9.76 per cent growth in its home loan portfolio – three times above system.  

The bank’s lending growth has taken TMB’s total mortgage portfolio to $5.9 billion. 

Speaking to Mortgage Business, TMB Ltd CEO Steve James partly attributed the growth to growing demand for the service proposition offered by the mutual sector.

“People are looking for ethical organisations with good corporate social responsibility, so I think that’s part of the overall growth and appeal, especially in that key worker market that we’re looking after at the moment with teachers and firemen, and people working in universities and education,” he said.

The growing interest in the mutual sector is evidenced by the Australian Prudential Regulation Authority’s latest property exposures statistics, which revealed that the customer-owned banking sector’s collective mortgage portfolio increased by 8 per cent over the past 12 months, compared to just 2.6 per cent growth among the major banks.

However, despite reporting above-system lending growth, TMB Ltd’s net profit after tax fell from $31.8 million to $27 million.

According to Mr James, margin pressures associated with the Reserve Bank of Australia’s (RBA) rate cuts weighed on the bank’s profitability.

“It’s certainly reduced our net interest margins, so they’ve certainly come down, but we’ve had strong capital for a long time – capital’s around 15 per cent, and therefore we can weather some of this as we go forward,” he said.

“The board’s decided to take a little less profit but keep the interest rates competitive both on deposits and home loans to our members. 

“Further rate cuts are obviously going to have an effect on the margin and push profits down as we go forward, but [from the customer’s perspective], it’s a great time to borrow.” 

The TMB CEO added that the bank would look to offset some of the cost pressures by “getting a larger share of the market”.

“We just launched a new brand in February, Health Professionals Bank, and that’s starting to become strong in the market and get some recognition.”

[Related: Mutuals outpacing major banks]

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.