MyState (MYS) H1 2025 earnings summary

Executive summary

• Merger with Auswide Bank became effective in February 2025, creating a larger, more diversified group with increased scale, capital base, and broader geographic reach, and is expected to be double-digit earnings accretive in FY26 post-synergies.

• Underlying earnings for the first half were stable year-over-year at $17.5m, with statutory NPAT at $15.9m, impacted by $1.6m merger transaction costs.

• Growth in new customers (+32%), lending, deposits, and wealth management income; customer advocacy remains strong with an NPS of +55.

• Interim dividend of 10.5 cents per share declared, representing 77% of underlying pro forma earnings, supported by a strong capital position.

Financial highlights

• Total operating income up 1.6% to $77.0m; net interest income rose 1.3% to $63.8m; net interest margin stable at 1.45%.

• Underlying NPAT steady at $17.5m; statutory NPAT down 8.9% to $15.9m due to merger costs.

• Operating expenses (excluding merger costs) increased 5.8% to $52.7m, reflecting inflationary pressures.

• Wealth management income up 6.1%; TPT Wealth revenue reached $7.2m; cost-to-income ratio for TPT Wealth improved by 126 bps to 77.3%.

• Interim dividend 10.5 cps (down from 11.5 cps in 1H24), payout ratio of 77% of pro forma underlying profit.

Outlook and guidance

• Merger expected to deliver $20–25 million in annual pre-tax cost synergies by FY27, with more than 50% realized in the first 18 months.

• Integration process to span three years with pre-tax integration costs of ~$29m, mostly in first two years.

• Targeting loan growth at or above system, with improved service levels and application volumes supporting growth.

• Expected double-digit earnings accretion in FY26 post-synergies.

• Cost growth for the second half is projected to be around 6%, in line with the first half.