MyState Posts 17% Rise in Underlying Profit After Auswide Bank Merger

A Transformative Merger

MyState Limited has unveiled its audited financial results for the year ended 30 June 2025, marking a pivotal moment in its evolution with the successful merger of Auswide Bank Ltd in February 2025. This strategic move has significantly expanded MyState’s footprint, boosting its loan book by 64% to $13.1 billion and enhancing its capital base and customer reach across Australia’s eastern seaboard.

While statutory net profit after tax edged up modestly by 0.8% to $35.6 million, the underlying net profit after tax, excluding merger-related transaction and integration costs of $7.5 million, surged 17% to $41.3 million. This reflects the operational momentum gained from the combined entity and the early realisation of synergies.

Financial Performance and Capital Strength

The merger has not only increased scale but also diversified MyState’s product offerings and geographic reach. The home loan book grew by $4.9 billion, a 62% increase, with MyState Bank’s lending growth accelerating in the second half of the year. Customer deposits also rose substantially, supported by Auswide’s deposit base and ongoing organic growth.

MyState’s capital position remains robust, with the total capital adequacy ratio improving to 17.51% at year-end. The group successfully issued $600 million in term residential mortgage-backed securities and $100 million in new Tier 2 subordinated notes during the year, underpinning its capacity for future growth.

Dividend and Shareholder Returns

The board declared a fully franked final dividend of 11.0 cents per share, payable on 16 September 2025, bringing the full-year dividend to 21.5 cents per share. This payout reflects a balance between rewarding shareholders and retaining capital to support ongoing integration and growth initiatives.

Operational Highlights and Integration Progress

Operationally, MyState has made significant strides, including the successful migration of all MyState Bank retail customers to a new digital banking platform, enhancing customer experience and operational efficiency. Auswide Bank launched a partnership with Elders, extending banking services through a broad rural network, while SelfCo, the specialist equipment finance business acquired through Auswide, grew its portfolio by 43% since the merger.

The integration has delivered over $8 million in annualised cost synergies within the first four months, exceeding initial targets. The group anticipates total integration savings of $20 million to $25 million over three years, focusing on consolidating systems, removing duplication, and embedding efficiencies.

Executive Remuneration Reflects New Scale

Reflecting the enlarged and more complex group, MyState’s board reviewed and adjusted executive remuneration arrangements. The changes aim to attract and retain talent capable of leading the expanded organisation, with remuneration packages now aligned to the group’s increased scale and strategic demands. Short-term and long-term incentives remain linked to financial performance, customer advocacy, risk management, and cultural values, ensuring alignment with shareholder interests.

Looking Ahead

MyState’s outlook for FY26 centres on completing the integration of Auswide Bank, realising further cost synergies, and driving profitable growth. The strengthened capital position and operational scale provide a solid foundation for continued expansion in home lending, deposits, and wealth management services.