AMP Bank has reported a 19% increase in operating earnings in the six months to June 2015, thanks to strong performance in its mortgage business.
According to the non-major's half year results released yesterday, the bank reported operating earnings of $50 million, up from $42 million in the first half of 2014, driven by strong growth in its residential mortgage book.
AMP's residential mortgage book grew from $13.5 billion in the first half of 2014 to $14.6 billion in the first half of 2015, an increase of 8%. The lenders total loan book grew by $633 million to $15.1 billion, an increase by 8% also.
In a note to investors, the lender says it was able to record solid growth despite intense competition in the market.
"Residential mortgage competition remained intense in the period, with continued market-wide discounting. AMP Bank's focus on retention, pricing enhancements and productivity from key channels, contributed to deliver residential mortgage book growth," it said.
The results also revealed that lending growth remains slightly above system, with new retail mortgage business from advisers stable at 24%.
However, looking ahead, the non-major expects growth to slow.
"AMP Bank has implemented a number of measures designed to comply with regulatory requirements to reinforce sound lending practices, including increased supervision of risk profiles, investment lending and serviceability of residential mortgages.
“These measures include changes to credit policies relating to, and the availability and pricing of, AMP Bank investment lending products. This is expected to slow the growth of AMP Bank investment loans in 2H 15 and into 2016.”
