Is it MyState or someone else’s now?

WITH the annual general meeting of MyState on October 17 an issue I consider needs addressing, is why only one of the key management personnel and two directors appear to be Tasmanians.

It may be argued 58 per cent of the home loan book is now located outside Tasmania, so MyState is no longer a Tasmanian bank, but I am worried at what appears to be bias against Tasmanian staff.

MyState grew their loan book by 10.72 per cent in the 2018/2019 financial year, a stunning achievement. Most growth appears to be from broker-introduced home loans in Brisbane, Sydney and Melbourne. As MyState would not have strong brand awareness in those areas, why are brokers directing so much business their way? I hope that this is not due to MyState having lower credit standards than the major banks, however at the date of the annual report, past due loans are very low by industry standards so they must be doing something right.

MyState net profit after tax for the past five years has been very flat as has net interest income, despite massive loan book growth. Obviously, rapidly falling interest rates do not help. I would argue that MyState would be justified in not passing on most of the recent .25 per cent rate cut as it will be very difficult for them to reduce deposit rates in order to keep profits at even the current level.

It is therefore open to question if the massive mainland loan growth for MyState in a quickly falling interest rate environment has been the correct strategy. I would compare it to a farmer who takes out a huge loan to buy a neighbouring farm which does not have any water and the loan can only be serviced if it continues raining.