The Auswide Bank Ltd (ASX: ABA) share price is up 6.22% today after a business update for the first quarter of FY21.
The regional bank reported strong growth metrics for the quarter. These include:
- Net profit after tax of $5.566 million, up 36.22% vs previous corresponding period
- Net interest margin of 1.99%, up from 1.89% in first quarter of FY20
- Loan book volume is up by 7.24% to $3.381 billion vs previous corresponding period
Auswide Bank managing director Martin Barrett welcomed the result, saying:
We have made an excellent start to FY21 with a first quarter that has delivered a pleasing performance across our key financial targets. We continue to make strong progress delivering on our strategic plan and improving the capability of the bank.
Auswide also reported it has provided COVID-19 related assistance to impacted customers during the first quarter. At 30 September, this loan assistance has fallen to 3.3% of Auswide’s loan book compared to almost 9% at the end of FY20.
Briefly about Auswide Bank
Auswide is a fully-licensed regional bank with a strong focus on residential mortgages in Queensland.
According to its FY20 full year report, the bank’s loan book carries credit quality with 72% of the loans having a loan-to-valuations (LVR) ratio of 80% or less. Its loan payment in arrears stood at 0.39%, a historic low.
In April, credit rating agency Fitch downgraded Auswide’s long-term issuer default rating of BBB+ from stable to negative, citing uncertainties in outlook due to the coronavirus pandemic.
At the same time, the agency praised Auswide for having a solid loan book and strong risk management controls.
And the Auswide Bank share price…
The Auswide Bank share price is down around 12% for the year. This compares with the 19% decline in the financial sector index measured by ASX 200 Financial ex- A-REIT Sector Index (ASX: XXJ).
The share price is trading at $5.29 at the time of writing, up 6.22% amid a broader rise in the market. At the current price, Auswide’s market cap stands at $212 million.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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