MyState Limited reported a robust half-year result with a 61% rise in underlying net profit, driven by the full impact of its Auswide Bank merger and strong growth across key business lines. The company also declared a fully franked interim dividend of 12 cents per share.
- Underlying net profit after tax up 61.4% to $28.2 million
- Statutory profit after tax rises 71.4% to $27.3 million
- Fully franked interim dividend of 12.0 cents per share declared
- Loan book growth modest at 1.1%, with strong expansion in Selfco commercial finance
- Merger integration progressing well with synergies on track for FY28
Strong Financial Performance Amid Merger Integration
MyState Limited has delivered a compelling half-year financial performance for the six months ended 31 December 2025, underpinned by the full-year impact of its merger with Auswide Bank Ltd. Revenue from operations surged 62.6% to $125.2 million, while underlying net profit after tax climbed 61.4% to $28.2 million. Statutory net profit after tax attributable to members rose even more sharply, by 71.4%, reaching $27.3 million.
This growth reflects the benefits of increased scale and diversification following the merger, which was completed in February 2025. The integration of Auswide Bank and its commercial finance arm, Selfco, has been a key driver, with the latter’s loan book expanding by 64% during the half. The combined loan book grew modestly by 1.1% to $13.25 billion, with a strategic focus on low-risk, owner-occupied home loans and a cautious approach to investor and interest-only lending.
Dividend and Capital Strength
Reflecting confidence in ongoing profitability, MyState declared a fully franked interim dividend of 12.0 cents per share, payable on 20 March 2026. This represents a payout ratio of 74.6% on statutory net profit, comfortably within the Board’s target range. The bank’s capital position remains robust, with a Common Equity Tier 1 ratio of 11.95%, slightly up from mid-year, despite the repayment of subordinated notes earlier in the period.
Operational Highlights and Cost Management
Operationally, MyState has managed costs prudently amid the complexities of merger integration. Total expenses increased by 61.9% compared to the prior corresponding period, including $3 million in merger-related integration costs. However, the Group’s cost-to-income ratio improved to 67.3%, reflecting efficiency gains and synergy realisation. The company remains on track to achieve targeted pre-tax synergies of $20-$25 million by FY28, having already realised $10.4 million in annualised synergies.
Net interest income rose 63.3% year-on-year, supported by a larger loan and liquid asset base and the higher-margin Selfco portfolio. The net interest margin held steady at 1.46%, despite sector-wide pressures from competitive deposit pricing and market dynamics. Non-interest income from banking activities more than doubled, boosted by the inclusion of Auswide’s operations.
Credit Quality and Risk Management
Credit quality remains a cornerstone of MyState’s strategy. The combined home loan portfolio maintains a conservative loan-to-valuation ratio profile, with nearly 80% of loans below 80% LVR. The 90+ days arrears rate improved to 0.28%, well below sector averages, and impairment expenses remained low at $1 million for the half. The bank continues to participate in the Australian Government’s 5% Deposit Scheme, adapting to recent scheme enhancements that remove caps and increase property price limits.
MyState is also investing in technology and risk mitigation, including cyber security measures, to safeguard its operations and customers amid a challenging economic environment. Customer advocacy remains strong, with a net promoter score of +65, signalling sustained customer satisfaction during the integration phase.
Looking Ahead
Looking forward, MyState’s Board is focused on profitable growth in deposits, home loans, and funds under management, while accelerating expansion in Selfco’s equipment finance portfolio and select trustee service segments. The second half of FY26 will see continued integration efforts, including the rollout of a single core banking system and brand unification. Integration costs are expected to total $29 million through to June 2028, consistent with prior guidance.
With merger synergies on track and a solid capital base, MyState appears well-positioned to navigate the evolving banking landscape and deliver shareholder value.
Bottom Line?
MyState’s strong half-year results and steady merger integration set the stage for continued growth, but investors will watch closely how integration costs and economic conditions unfold.
Questions in the middle?
- How will MyState manage competitive pressures on net interest margins amid ongoing market volatility?
- What is the timeline and expected impact of the single core banking system and brand unification?
- How resilient is the loan portfolio to potential economic downturns given current credit quality assumptions?