Bank’s record returns

FEDERAL government financial support during Covid, increased investment in property, historically low interest rates and increased savings have all contributed to Heritage Bank’s record-breaking pre-tax profit.

The Toowoomba-based bank announced a pre-tax profit of $64.4 million for the 2020/21 financial year, up 24.6 per cent on the previous year.

Heritage Bank’s after-tax profit of $44.81 million was up 23.5 per cent, just shy of their record of $45.04 million set in the 2017/18 financial year.

Heritage Bank CEO Peter Lock said the results reflected trends being felt across the financial services sector that have defied initial expectations of a Covid-inspired downturn.

“The emergency measures that the Federal Government put in place to offset Covid have injected significant amounts of cash into the economy,” Mr Lock said.

“With limited travel possible, and with lingering concerns about what Covid meant for the future, many people chose to put more money into savings or pay down their loans.

“At the same time, with interest rates at historic lows, investing in property grew in popularity, with real estate markets booming across the country.”

Chairman Kerry Betros said the results showed the bank was strong and reliable.

“We believe the way we look after our customers and the service we give them is second-to-none and people appreciate that,” he said.

“Our members are much better off dealing with us than with the big four banks, CANSTAR results show that, but apart from that we’ve supported the community like we always have. We have our charitable foundation which just last week the bank donated $1 million to that, and that’s used for charities in the communities in which we work.”

Mr Betros praised the resilience of staff in helping deliver the financial results while remaining focused on serving members, with no staff members were let go during Covid and the bank not taking any JobKeeper payments.

“Our staff have been tremendous through Covid, especially the ones in the branches,” he said.

“We kept the branches open and that hasn’t been easy with Covid restrictions and the demands of customers but we’re very proud of our staff and grateful for the way they’ve responded to the difficulties they’ve encountered.”

The announcement of Heritage’s financial results comes midway through the due-diligence process on the proposal to merge with Adelaide-based People’s Choice Credit Union.

“This is exciting news that we believe has the potential to significantly strengthen our future, so we can deliver more for our members,” Mr Betros said.

“It would be a true merger of equals, bringing together two organisations of a very similar size, who share a commitment to mutuality and serving our members.

“From initial discussions, we believe a merger would give us the increased size and scale needed to remain competitive in the banking sector, and create a new national force for good in Australian banking.”

The boards of Heritage Bank and People’s Choice expect to make a decision by the end of the year on whether they will pursue a merger, after the completion of the due diligence.

If the proposal goes forward, the merger would be put to a member vote early in 2022.