Co-op bank lifts customer payout
Life has not quite imitated advertising, with The Co-operative Bank falling short of a record profit but increasing its cash rebate to customers.
The mutually-owned bank made a net profit of $7.1 million in the year to March 31, up 24 per cent from the previous year.
The profit does not include $1.3m worth of rebates to be paid to customers, up from the inaugural $1m payout.
Last year the bank launched an award-winning advertising campaign, featuring a montage of customers around the country celebrating "another record profit".
This year's result was still well shy of the $13.1m profit delivered in 2010, when the mutual bank was still known as PSIS.
However, chief executive Bruce McLachlan said it was "bang-on our expectations".
"We're going to be quickly recovering at this rate," he said.
McLachlan said the advertising campaign, which pokes fun at the big Australian-owned banks' endless run of profits, had paid off.
"There's no doubt that our brand launch in July last year contributed to a much stronger second-half result than first-half."
More than 10,000 customers had joined over the year, and the bank's deposit base had grown 7.9 per cent to $1.4 billion.
The Reserve Bank's restrictions on low-equity mortgage lending failed to slow the fledgling bank down.
Lending grew at 9.7 per cent over the whole year, and reached 14 per cent in the second half, well above competitors.
McLachlan said the $1.3m rebate was divided up based on the breadth, depth and tenure of each customer's relationship with the bank.
"For many of them, it's a notional amount," he said.
"But it's more what it means, rather than what it is. It's just got a real feel-good factor about it."
The improved result was largely driven by a 37 per cent fall in bad debts, which McLachlan attributed to the improving economy.
The bank wants to double the size of its business in five years.
McLachlan said the focus remained on improving digital products and services, with a mobile app to be released soon.