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ME Bank’s results for FY21, released by parent company Bank of Queensland (BOQ), have revealed the bank’s total loan book fell by 6 per cent in the 12 months to 30 June, down to $25.6 billion.
Residential home loans, which made up the bulk of ME Bank’s book, were slimmed down by 5 per cent over the year, to $25.2 billion.
Credit cards and personal loans also suffered drops of 6 per cent and 26 per cent, down to 133.2 billion and $94 million respectively.
Bank of Queensland completed its $1.3 billion acquisition of ME Bank in July, following the FY21 period covered by the results.
The parent group has spelt out growth ambitions for the brand’s lending business, having already commenced a revamp program.
“BOQ is excited to be in a position to further lift the performance of ME’s loan book and return it to solid and sustainable growth in FY22,” a spokesperson for BOQ told Mortgage Business.
“We have already implemented our Home Buying Transformation Program which will further speed up our ‘time to yes’ for loan approvals and processing, improving customer service levels further and ensuring continued attractive rates in market.”
But despite the downwards movements across the organisation’s lending, ME Bank’s profit for the year came to $112.6 million, surging by 39 per cent from FY20.
Net interest income came to $473.5 million, climbing by 3 per cent year-on-year, while total net operating income had risen by 3 per cent to $494.5 million.
A dividend totalling $60 million had been distributed in March to the bank’s previous owners, the super funds that own Industry Super Holdings.
Meanwhile, retail customer deposits rose steadily, up by 5 per cent to $9.1 billion, while business customer deposits jumped by 77 per cent to $3.2 billion.
The bank has maintained its additional credit provisions of $42 million for the expected loss impact of COVID-19, into FY22.
Further information on ME Bank’s performance is set to be provided by BOQ on 13 October, when it releases its own results.
ME Bank is also facing 62 criminal charges laid against it by ASIC, over alleged misleading or false representations in communications to home loan customers.
The proceedings have followed criticisms against the bank last year, when it reduced the amount borrowers could redraw from specific legacy mortgage products without forewarning customers.
ME Bank then decided to switch back its home loan redraw limits for any customers who wished to opt out, after reviewing the decision and consulting affected customers.
Former ME Bank chief executive Jamie McPhee defended the decision before a parliamentary committee, but in July 2020, he resigned from the role and was replaced by the bank’s then-chief financial officer, Adam Crane.
[Related: Westpac to begin offering SME recovery scheme]
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