Teachers Mutual Bank Limited records strong FY22 financial performance

Teachers Mutual Bank Limited continues to build on its proven foundation as a Member owned bank, announcing a strong FY22 financial performance driven by Member growth, above system lending growth and an increase in retail and wholesale deposits that positions the Bank well to support its growing national and digital reach. 

FY22 Highlights 

• Net profit after tax of $30.4 million, an 8% increase on the prior year 
• Membership grew to 230,344 nationally
• 7.0% growth in total assets to $10.4 billion  
• Retail Deposits increased by $468 million 
• Capital adequacy ratio of 14.7% 
• 98% Roy Morgan customer satisfaction rating for Teachers Mutual Bank¹ 

Teachers Mutual Bank Limited CEO Steve James said the Bank has achieved another strong year of performance despite the ongoing disruptions and challenges presented by the pandemic throughout the period. 

“Management of our resources was key during FY22 as COVID-19 and the flu impacted our operations however, despite this, our operating expenses were well managed at 76% which is a pleasing result,” Mr James said. 

“During FY22, Teachers Mutual Bank Limited attracted 9,460 new Members from across Australia with around 6,000 of these new Members joining following the successful merger with Pulse Credit Union Limited who we welcomed into the Health Professionals Bank division.”

Following its launch in FY21, a key focus in FY22 was to grow Hiver - Australia’s first digital-only mutual bank for employees and their families from the education, emergency services and healthcare sectors, as well as university graduates.

“In FY22, Hiver attracted 1,776 Members, demonstrating the need for a digital bank for essential workers who make the world a better place and a significant development for both our Bank and the Australian market,” shared Mr James. 

Home loan balances continued their upward trend, increasing for the year by 9.9% to $8.5 billion, above system growth of 8.0%, which means Teachers Mutual Bank Limited maintains its 22-year record of above-system growth.²  This growth was driven through first party loan origination and strong growth through the broker or third party channel. A key standout was the performance of UniBank, surpassing $2 billion in home loan assets.  

The loan balance growth was supported by retail deposits increasing by $468 million to 30 June 2022 and the capital adequacy was recorded at 14.7% as at 30 June 2022, well above the regulatory requirement.

In FY22, the downward trend in the bad debts written off continued, recording a reduction on FY21 to $765,000 reflective of the Bank’s risk appetite and prudent approach to managing its lending book. 

For the first time during FY22, the Bank sought valuations on its property portfolio. The revaluation resulted in an increase in the value of the holdings by $31.2 million, contributing $26.2 million in capital to the balance sheet³ strengthening Teachers Mutual Bank Limited’s capital position. 

“Pleasingly, Roy Morgan’s Consumer Banking June 2022 Australia report shows the mutual sector continues to out-perform major banks in customer satisfaction and according to the Roy Morgan report, to June 2022 Teachers Mutual Bank division achieved a 98% customer satisfaction rating⁴ – the highest of any financial institution, demonstrating Teachers Mutual Bank’s commitment to its Members,” Mr James said. 

“Our focus on our Members continues to be unwavering as we provide them, many who are essential workers on the frontline of the pandemic, with financial services and products that truly meet their needs. 

“We are seeing strong interest from people looking for financial services backed by a sustainable approach to banking, which is aligned with our purpose: ‘banking for good, for those who do good’. During FY22 Responsible Investment Association Australasia (RIAA) Certified Responsible Investment products, grew from $8.3 billion to $10.8 billion.” 

In the same year, Teachers Mutual Bank Limited bolstered its ESG credentials, achieving B Corp Certification by global non-profit organisation B Lab. B Corp Certification is internationally recognised as a rigorous performance assessment strengthening the Bank’s credentials as a world-leading socially responsible bank.

Mr James shared, “FY22 has been a noteworthy year for many reasons. As we continued to manage the disruption caused by the COVID-19 pandemic, our people demonstrated their resilience, agility and sense of community, continuing to operate to our high standards and put our Members at the heart of everything they do.”

“Being a mutual means our success is our Members’ success; our profits will always go towards meeting our Members’ evolving needs. This past financial year we have again shown that Teachers Mutual Bank Limited has the determined focus to best support our growing national membership.”

“Teachers Mutual Bank Limited remains optimistic about the short term future, we are well provisioned and we are leading the way in using the Bank as a force for good across the globe as a B Corp.”

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1  Roy Morgan’s Consumer Banking June 2022 Australia report

2 As per APRA monthly ADI Stats

3 Net of potential capital gains tax of $5 million

4 Roy Morgan’s Consumer Banking June 2022 Australia report