Melos Sulicich

MyState Limited (ASX: MYS), the banking and wealth management group, has announced that it has strengthened its level of loan provisioning for the potential impact from the COVID-19 pandemic. In addition, Moody’s has assigned an investment grade issuer credit rating to

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Melos Sulicich

MyState Bank customers are embracing digital banking and contactless payment technologies as a substitute for cash during the COVID-19 (Coronavirus) emergency.

Recent data from MyState Bank reveals a significant shift in payment habits as customers become increasingly comfortable with card-based transactions and online banking.

The share of overall transactions, comprised of ATM usage and cash withdrawals via MyState Bank branches, has decreased by 29% in April, compared to last month.

The shift away from in-person transactions to those conducted remotely has led to increases in the proportion of online transactions since the start of the month, with online BPAY payments and New Payments Platform (NPP) transactions both up by 20%. Meanwhile, PayPal transactions have increased by 40%, while the share of Visa debit transactions increased by just 8%.

MyState Bank is experiencing increased demand for internet and mobile banking services with new registrations for the services up 55% on the 12-month average. Overall, the number of customers actively making use of these channels has climbed by more than 4% since the introduction of social distancing and ‘stay-at-home’ measures throughout Australia.

MyState’s Managing Director and CEO Melos Sulicich said the data indicates Australians are heeding the advice from the Government and health experts to avoid using cash where possible to remove any risk of COVID-19 transmission.

“While MyState branches remain open and are providing the full range of banking and financial services, social distancing and other preventative health measures means many Australians may not be able to undertake their banking or normal day-to-day activities in the usual way. Many retail establishments are only accepting payment via debit and credit cards.

“For this reason, MyState Bank have introduced a range of measures and advice for customers who may not be able to access bank branches as a result of the current emergency,” Mr Sulicich said.

MyState Bank reported call volumes for its Contact Centre have increased with the number of calls rising by nearly 30%, while customer email requests have doubled over the last month.

Mr Sulicich said, “We are in extraordinary times and we are doing all we can to assist customers to do their banking as easily as possible.

“Online banking via internet banking or our mobile app provides real advantages and MyState has introduced a simple-to-use guide explaining how to bank without using a branch.

“We also have online tutorial videos to help customers through the process of banking online and can provide assistance in-branch or over the phone, if required.”

Mr Sulicich said many elderly and vulnerable customers were traditionally high branch users and generally lower users of digital banking services such as debit and credit cards and online banking. He urged more internet savvy customers to assist their family members, friends and neighbours who may be unfamiliar with online banking or the use of a debit card.

“If you have a relative or friend who needs help, obtain a copy of our guide and assist them to access MyState Bank.

“Most day-to-day banking can be conducted 24-hours-a-day, seven-days-a-week through Internet and Mobile Banking. This includes checking account balances, viewing recent transactions, transferring money and paying bills using BPAY.

“Customers can even schedule transfers for regular bills or rental payments, activate a new card, send secure messages or instructions to MyState and set up eStatements.

“Internet banking works best from a PC, laptop or iPad and the mobile app is also available for downloading on smartphones and tablet devices through the App Store or Google Play,” he said.

Mr Sulicich said assistance was available by calling MyState’s Customer Care team on 138 001, online at mystate.com.au, or at any MyState Bank branch.

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Chairman of MyState Limited, Miles Hampton, said the Board had come to the view that given the uncertainty of the present time, it was important to maintain continuity in the leadership team and had approached Mr Sulicich to request he delay his plans to return to Sydney.

Mr Hampton said the Board of MyState are delighted that Melos had agreed to stay on.

“Melos knows our business very well and his ongoing leadership will ensure we get through this challenging period as a strong bank, focused on our customers and our communities.”

Mr Sulicich will remain with MyState for at least 18 months. The terms of employment remain consistent with those disclosed to the market on 3 May 2018.

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Melos Sulicich

MyState Limited, the banking and wealth management group, has advised that it has taken action to protect customers and employees in light of the coronavirus situation.

Managing Director and CEO, Melos Sulicich, said: “We’ve prioritised the health and wellbeing of our customers and employees, introducing a range of measures to reduce the risk of contracting or spreading the virus. These include robust office and branch hygiene protocols, employee travel restrictions, and encouraging employees to work from home where possible. 

“We’re taking advice from federal and local government and health authorities so we can continue to serve our customers safely and effectively and reduce the risk of anyone contracting the virus.  

“Communities stick together in tough times and as we all do our best to navigate the challenges and uncertainties of COVID-19, we’d like to assure customers that we’re here for them.

“MyState continues to lend, take deposits, manage investments and service customers and clients with the same level of support, compassion, and understanding that we bring to banking every day. Our branches are open and will remain open in the current environment.”

MyState also provides the following advice to customers:

• Online services are recommended – both MyState Bank and TPT Wealth customers have access to their accounts and investments 24/7 from anywhere
• If you’re feeling unwell or have recently returned from overseas, instead of visiting our branches please call our MyState Bank Customer Care team on 138 001 or TPT Wealth Client Services team on 1300 138 044. 
• We ask that customers who do visit a branch maintain social distancing by keeping at least one metre from people, and our employees will do the same.
• Hand hygiene products are available at our branches, and we have further upgraded our cleaning regime across all branches
• Using online and electronic payment instead of cash is recommended to minimise contact

The Group also has a financial assistance package available to help customers if they are experiencing financial hardship as a result of the impacts caused by the virus. The assistance includes options including delaying loan repayments to help customers get back on their feet.

MyState thanks all customers for their ongoing support and understanding, and will continue to update them as the situation unfolds. We’re continuing to focus on protecting customers and employees during this difficult time.

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Melos Sulicich

MyState Limited (ASX:MYS), the banking and wealth management group, today announced that its wealth management business, TPT Wealth, has launched a new platform providing managed fund investors with national digital services.

MyState’s Managing Director and CEO, Melos Sulicich, said, “We are modernising wealth services for managed fund investors as part of a multi-year ongoing investment in the TPT Wealth business. The launch of our new Investor Portal completes the first phase in the strategic development of our wealth platform. This brings a new digital capability allowing investors nationally to manage their investments online including making trades or topping up their investments. It enables investors to apply online for new products with straight-through processing, and newly registered fund investors can start transacting within a very short timeframe.

“TPT Wealth’s services now complement the digital services offered by MyState Bank. This continues our strategy of serving customers through modern digital platforms and skilled, friendly customer service, providing a great experience that allows customers to access products and services when they want, how they want.”

New online services are provided through a digital funds administration and registry portal powered by Link Group, which allows investors to make contribution and redemption requests, update their personal contact details and view statements at their convenience. Link Fund Solutions, part of Link Group, will be the custodian, administrator and registrar for TPT Wealth’s services, providing operational efficiency as the business gains scale.

TPT Wealth is one of Australia’s oldest and most respected providers of wealth solutions, and its managed funds have $1.2 billion in funds under management. The business is undergoing a multi-year digital transformation to place greater control in the hands of fund investors and the group’s funds management and trustee services customers.

Transition to a digital platform is a critical step towards building a national funds administration and distribution service, allowing wealth products to be accessed conveniently from anywhere in Australia. This enables the group to serve its customers nationally through cost-effective, efficient digital systems, supported by a broader customer service network located in Tasmania and Australia’s eastern seaboard.

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Mr Dickson brings with him over 25 years of experience in a variety of financial roles, with 11 years of CFO experience. During his career, Mr Dickson has provided strong financial and strategic guidance and analysis as well as proven leadership and talent development capability.

Mr Dickson’s most recent role was at ME Bank where he held the position of CFO for 6 years, driving strong growth across the business.  During his tenure with ME, he led the Finance team through a core banking platform replacement program.

Prior to this, Mr Dickson was CFO for AXA Australia where he led the delivery of statutory, regulatory and management reporting, budgeting, forecasting and strategic planning for AXA’s Australian based subsidiaries.

Mr Dickson has also held senior positions with the Colonial First State Group Limited, Portfolio Partners Limited and CommBank where he was General Manager, Finance – Investment & Insurance Services.

In his role at MyState, Mr Dickson will be accountable for the finance and treasury activities of the company to ensure the long-term business strategies are supported by effective financial outcomes.

MyState’s Managing Director and CEO, Melos Sulicich, said, “We are delighted to welcome Gary to our executive team. Gary is a proven, high calibre CFO with unique and relevant experience that is important to the ongoing success of our organisation.”

Mr Dickson has a fixed term contract until June 30 2020 and holds a Bachelor of Commerce from the University of Melbourne.

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Melos Sulicich

Boredom and ‘bad days’ are among the biggest savings roadblocks for Australians, along with social media influencers, peer pressure from friends, and Buy Now, Pay Later services according to new research by MyState Bank.

MyState Bank research revealed Australia is a nation of emotional spenders, with 62% of Australians saying their emotional state, such as if they are having a bad day or simply being bored, has a negative or very negative impact on their ability to save.

The research further highlighted that more than a quarter of Australians (27%) don’t have a budget in place to track their expenses, and almost one third (32%) said they save less than two years ago or have never even managed to save any money.  Further, nearly one in 10 said they struggle to reach the end of the month financially.

“Aussies are feeling the pinch at the moment – wage growth is stagnant; savings interest rates are at all-time lows, and the cost of living continues to rise”, said MyState Bank Managing Director and CEO, Melos Sulicich.

“We want to help Australia save”, said Mr Sulicich. “By uncovering the negative influences on their savings habits, MyState Bank is in a better position to put in place education campaigns, and solutions to overcome those bad saving habits. In our experience, our customers want to save, and we want to help them, by giving them the information and tools to avoid the emotional decisions that they may regret longer term.”

Australia’s biggest savings roadblocks revealed

MyState Bank’s research found that Buy Now, Pay Later services topped the list of Australia’s biggest savings roadblocks, with two thirds of Australians admitting these products have a negative or very negative influence on the ability to resist impulse purchases.

Gen Xers’ thought the ability to save was most impacted by Buy Now, Pay Later services, with more than 1 in 5 admitting it had a very negative impact on savings habits, followed closely by GenZers (19%).

“Consumers are buying into the ‘BNPL effect’ – they don’t need to wait to buy something when they have instant access to credit. The ease at which anyone can sign up to these Buy Now, Pay Later services is concerning, and it is easy to lose track of your spending. If you are cash-strapped, the service can help but it can compromise your long term goals”, said Mr Sulicich.

Social media platforms such as Facebook and Instagram, and posts from online friends and influencers, was found to be another common savings roadblock with 61% of Australians identifying this as a negative or very negative influence on their ability to save.

“More people have access to social media platforms than ever before and as a result, are exposed to influencers, retailers, and friends showing off clothes, holidays and gadgets. Social Media users in Australia are some of the most active in the world with recent data shows there are now 15 million active Australians on Facebook and 9 million on Instagram. As humans, we can’t seem to help but compare ourselves to what we see on social media and may feel like we have to spend more to appear to be keeping up with the Joneses.”

Other common savings roadblocks highlighted in the MyState Bank research peer pressure from friends and co-workers which 57% of Australians said have a negative or very negative influence on their ability to save.

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Melos Sulicich

MyState Limited (ASX: MYS) announced yesterday that it has entered into a sale agreement with Fiducian Group Limited (ASX: FID) for the acquisition of MyState’s retail financial planning business in Tasmania. Under the agreement, Fiducian will pay approximately $3.5 million to acquire the MyState financial planning client book with more than $340 million in funds under advice. The transaction, which is expected to be broadly NPAT neutral for MyState in future years, is expected to complete before 30 June 2019.

Fiducian is an ASX listed leading national financial services company with more than $2.7 billion funds under advice and 40 practices nationally.

MyState Limited Managing Director and Chief Executive Officer, Melos Sulicich, said: “We are very pleased to have reached this agreement with Fiducian. We believe its Tasmanian footprint and dedicated financial planning focus provide a great fit for our customers and staff. We look forward to working with Fiducian to ensure that the transition for our customers is smooth, simple and straightforward.

“This is a strategic move for the MyState Group which allows us to simplify our business and invest for growth in the areas where we can have a competitive advantage. Through our Tasmanian Perpetual Trustees (TPT) brand, we are building a simplified national and highly scalable wealth management business focussed on managed funds and trustee services.”

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Melos Sulicich

MyState Limited has announced that net profit after tax for 1H FY19 was $14.4 million compared with $15.8 million in the pcp.

Managing Director and Chief Executive Officer, Melos Sulicich, said: “The lower result reflected higher funding costs as well as investment to deliver a new platform that will facilitate growth of the funds management business.

“We are seeking to build long term growth in the profitability of our business by gaining market share in both banking and mortgage funds management. To deliver on this objective, we have undertaken a number of key initiatives to support business activity which we expect will provide a foundation for profit growth in FY20 and beyond.

“Pleasingly, we continue to see ongoing growth in new customers which provides further confidence in our value proposition. Home loan book growth for the six months to 31 December 2018 was 10.3% on pcp, just over 2 times system. Although challenging markets impacted our overall result, MyState’s home loan book growth reflects our compelling customer service proposition and high level of customer advocacy.”

The Board declared an interim dividend of 14.25 cents per share, fully franked, consistent with the previous year and payable on 29 March 2019 to all shareholders on the register at the record date of 4 March 2019, with a 1.5% discount for shares issued under the Dividend Reinvestment Plan.

Digital platform contributes to banking growth

Mr Sulicich added “Our strategy of digitising services is benefiting customers and we now offer a complete digital product suite, having recently introduced online origination for home loans, online deposit products and new payment technologies.

“Our digital platform enables us to offer highly competitive and innovative products, with growth in online accounts contributing to an increase in customer deposits of 10.6% to $3.4 billion. We are pleased that our continued investment in improving customer services has been recognised in the Group’s net promoter score of +39 at the end of the first half, up from +27 at end of June 2018. This places MyState among the leading financial services firms in terms of customer satisfaction.”

MyState remains focused on low risk, owner-occupied lending with a loan-to-valuation ratio of less than 80% with the quality of the mortgage book evidence of this focus. Further, as part of actively managing the business in the current environment, variable home loan rates for mortgage customers were increased on 29 January 2019 by between 11 and 16 basis points, reflecting increases in funding costs.

While credit growth slowed nationally, heavy competition for home lending continued and net interest margin reduced to 1.82% for 1H 2019. Although house price growth has slowed nationally, economic indicators remain at healthy levels and unemployment remains close to five-year lows. The Group has maintained prudent lending practices and 30 and 90 day arrears continue to be below peers and industry benchmarks.

Expenses continued to be actively managed, with operating expenses flat on pcp. Total expenses rose 1.4% on pcp, primarily due to higher depreciation and amortisation related to the Group’s investment in its technology platform, digital investment, investment in the wealth management business and one-off rebranding and associated marketing costs. The Group’s cost-to-income ratio increased to 66.8% largely reflecting increased competition for wholesale and retail deposits and the higher Bank Bill Swap Rate (BBSW) which disproportionately elevated funding costs.

Simplifying our banking brands

During the first half, as part of the Group’s strategy, banking brands were consolidated under a single brand, with The Rock rebranded as MyState Bank. This facilitated a consistent suite of banking products and services across the Group and enabled The Rock customers to access new internet, mobile and online origination services.

Future focus on wealth management to benefit fund investors

“As part of our strategy, we are investing in our Wealth Management business by developing contemporary products, restructuring funds and administration to benefit investors with a future focus on national distribution,” said Mr Sulicich.

Profit from the Group’s wealth management operations was $2.2 million, in line with pcp. Funds under management revenue increased slightly on pcp, with funds under management 2.5% lower, coming off a decade high in December 2018.

Healthy capital position

MyState has a strong balance sheet, and the Group’s capital adequacy ratio at 31 December 2018 was 13.05%. Despite the low profit result in the period, the Group ROE of 9.03% is significantly higher than regional bank peers as a result of disciplined capital, cost and balance sheet management.

Comments on Hayne Royal Commission

MyState notes the release of Commissioner Hayne’s report into misconduct in the Banking, Superannuation and Financial Services Industry and its recommendations. Although MyState was not called to provide information or evidence to the Royal Commission, a number of recommendations in the report may have some impact on the Group. MyState welcomes recommendations to strengthen the accountability and effectiveness of regulators.

MyState notes the very important role that mortgage brokers play in bringing competition to the mortgage market in Australia. The Commission has made recommendations to change mortgage broker remuneration. Mortgage brokers are valued by customers and almost 60% of mortgages are written by mortgage brokers across the nation. MyState is committed to working with the mortgage broking industry through this period of uncertainty and change to help the industry evolve and continue to generate competition.

Outlook

Mr Sulicich said: “While competition for high quality, owner-occupied lending remains strong, the Group anticipates continued above-system home loan growth. We will continue our disciplined cost management as we move beyond a period of significant investment and are confident of the underlying robustness of our business. We have a clear strategy of organic growth supported by strategic investment in innovative products that help customers to bank the way they want.

“Reinvigoration of our funds management platform will introduce new services for investors and increase national distribution of our wealth management products.

“Given the external environment, our recent repricing initiative, volume and cost momentum, we expect the second half of FY19 to be broadly in line with the second half of FY18 and therefore the full year net profit after tax is expected to be around $30 million or 3-5% below FY18.”

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Melos Sulicich

MyState Bank will be in a better position to match customers with the right type of product for their specific credit situation, after the nation-wide bank today announced it has become one of the first banks in Australia to be fully compliant with Comprehensive Credit Reporting (CCR) obligations.

Under the CCR regime, positive credit history, such as on-time loan repayments, will be recorded on an individual’s credit report. Previously, only negative information, such as missed payments, was recorded.

CCR is seen as an important tool for consumers to take control of their credit reputation. It will also allow banks and other licensed credit providers to access a more holistic picture of a consumer’s credit profile, enabling them to make more informed and responsible lending decisions.

MyState Bank is now one of the first banks in Australia to voluntarily have 100 per cent of its positive consumer credit data ready for reporting. Meanwhile, CCR has been partially mandatory for the major banks, who are required to share 50 per cent of customer data with Credit Reporting Bodies (CRBs), rising to 100 per cent by September this year.

Managing Director and CEO Melos Sulicich said future MyState customers are the biggest beneficiaries from the bank’s move to a more robust, transparent and fairer reporting of credit.

“Overall, customers can expect a more accurate credit score reflective of their actual behaviour. For instance, if a customer has missed one or two payments in a long credit history they are unlikely to be unnecessarily penalised,” said Mr Sulicich.

“For MyState Bank, the onboarding of CCR puts us in the best possible position to ensure we are aligning our products with the best interests of customers, based on their personal credit-related behaviour.”

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