Elders Rural Bank, a joint venture between Futuris Corporation Limited and Bendigo and Adelaide Bank Limited, has posted a Net Profit after Tax of $41.1 million for the year ended June 30. The result represents a 14pc increase on the prior year’s profit of $36 million.
Chief executive officer Paul Hutchinson attributed the profit increase to the strength of the bank’s business model with strong retail deposit growth being the highlight during the period.
Loans under management at 30 June of $3.626 billion were 12pc higher than last year’s figure of $3.227b.
Total deposits rose by 15pc to $3.729b compared with $3.231b in the previous year.
Mr Hutchinson said the business had performed strongly during a period which had been challenging for many financial institutions due to the credit crunch.
“The strength of the Bank’s business model has been highlighted during tight credit market conditions.
"ERB’s funding comprises over 90pc in retail deposits and during the last financial year, retail deposit growth has been 19pc.
"This demonstrates the ongoing confidence in our organisation and the quality of our investment products.”
Elders Rural Bank’s proximity to its customer base and deep knowledge of the rural sector has again generated a very strong credit performance.
Elders Rural Bank’s ratio of net non-performing loans to gross loans under management, improved to 0.33pc (2007: 0.36pc).
“Our strong linkages and understanding of the rural sector, coupled with the strength of relationship we have with our customer base, heighten our ability to manage credit risk.
ERB’s loan book has strong geographic diversification and the Bank also applies a sophisticated approach to industry sector concentration.
"The most dominant sectors, namely cereals and livestock, have performed well over a long period of time,” Mr Hutchinson said.
Mr Hutchinson noted that the seasonal outlook for its customers appeared positive.
“Strong commodity prices coupled with a more favourable outlook with respect to rainfall should assist many of our customers over the next few months,” Mr Hutchinson said.
Elders Rural Bank has continued to develop its product and service capacity throughout the year.
“New initiatives have included the development of a ‘Stock Rebuilder’ loan to coincide with restocking programs as well as additional deposit products.
"Further development of payment mechanisms is scheduled to be developed to better meet the needs of customer operating cycles,” Mr Hutchinson said.
Elders Rural Bank continues to be recognised in the market for offering outstanding financial products.
Money magazine awarded ERB a Best of the Best Award to the Everyday Account in the e-Transaction Account category and Cannex awarded the ERBonline Savings Account a five star rating during the year.
Mr Hutchinson said the awards recognised the superior returns and functionality of the Bank’s products.
Mr Hutchinson thanked the staff of Elders Rural Bank and its shareholders for their ongoing commitment and support.