MyState Group Accelerates Growth Post-Auswide Merger with $8.4m Synergies

A Landmark Merger Drives Scale and Synergies

MyState Group marked FY25 as a pivotal year, completing its transformational merger with Auswide Bank in February 2025. This strategic move has rapidly expanded the group's scale, with the combined entity reporting a 62% increase in its home loan book to $12.9 billion and a 71% surge in customer deposits to $10.1 billion. Within just four months post-merger, MyState achieved $8.4 million in annualised cost synergies, underscoring effective integration and operational efficiencies.

Financial Performance Highlights

The merger's impact is reflected in a 17% uplift in underlying net profit after tax (NPAT), reaching $41.3 million for FY25. This growth was supported by a 7.5% annualised increase in the loan book and a modest 2 basis points improvement in net interest margin, despite a challenging interest rate environment. Operating costs rose by 25.7%, largely due to the inclusion of Auswide's four-month contribution, but were well managed relative to income growth, maintaining a group cost-to-income ratio of 68%.

Statutory NPAT stood at $35.6 million, impacted by merger-related transaction and integration costs. The board declared a fully franked final dividend of 11 cents per share, reflecting confidence in the group's capital position and growth outlook. The total capital ratio improved by 109 basis points to a robust 17.5%, providing a strong buffer for future expansion.

Strategic Initiatives and Integration Progress

MyState has successfully migrated its retail customer base onto a new digital banking platform, enhancing lending approval times and customer experience. The group also advanced key growth initiatives, including the acquisition of Selfco, an equipment finance business, and a partnership with Elders to distribute banking products. These moves have diversified revenue streams and expanded geographic reach.

Integration efforts have focused on consolidating leadership, streamlining corporate services, and aligning cultures. The group anticipates realising $20 to $25 million in annual pre-tax cost synergies by FY28, with total integration costs estimated at $29 million, primarily over the next two years. Early synergy realisation is expected to offset underlying cost growth in FY26.

Outlook and Growth Priorities

Looking ahead, MyState aims to profitably grow its home loan book and customer deposits, scale equipment finance operations, and expand trustee services. The group's well-capitalised position supports investment in these priorities and potential organic or inorganic opportunities. Management remains focused on delivering operational efficiencies and leveraging the combined entity's broader customer base and capabilities.