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Half Yearly Report and Accounts

Document date:  Wed 27 May 1998
Published:  Wed 27 May 1998 00:00:00
Document No:  137675
Document part:  I
Market Flag:  Y
Classification: 

HOMEX - Melbourne                                                     

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                                              Half    Half    Half
                                              year    year    year
                                            Mar 98   Sep 97  Mar 97
Operating profit before debt 
<~>s provisioning ($M)               141     136     132

Operating profit after tax as a % of average
risk weighted assets                          1.1%    1.0%    1.2%
Operating expenses to net operating income   63.8%   68.9%   65.3%
Operating expenses to average assets          2.8%    3.0%    3.1%

Net specific provision as a %
of average net advances                       0.2%    0.1%    0.1%
Net non-accrual loans ($M)                    423     313     440
Net non-accrual loans as a % of net advances  0.6%    0.4%    0.7%

Lending growth (%)                            6.0%    4.5%    4.3%
Total assets ($M)                          88,729  80,321  77,031
Risk weighted assets ($M)                  70,878  66,687  62,987
Employees (FTE) - Permanent                20,292  21,113  22,804
Employees (FTE) - Temporary                   761     612     478
Total employees
                                           21,053  21,725  23,282


Solid growth in lending, particularly in mortgage lending and
business banking, offset a modest decline in margins and led to a 4%
increase in net interest income. Income also benefited from higher
general banking and cards fee income.

Operating expenses were marginally down, excluding restructuring
costs.

Significant progress has been made in transforming the organisation
through the Group's restructuring programmes, which led to lower
staff numbers. The roll out of branch of the future, together with
Operations & Technology and head office restructuring in the second
half will result in further cost savings.

Computer expenses were higher in Australia, principally due to Year
2000 compliance work.

Our cards business continues to perform well and is now benefiting
from the investment in its very successful Telstra and Telstra/Qantas
co-branded card programmes. Share of card spend is now in excess of
25%.

The decision to switch Funds Management capital out of equities to
lower the risk profile of the Group, reduced earnings by $36 million
after tax.

The effective tax rate in Australia increased from 21.1% to 28.7% as
a result of significantly lower levels of tax preferred income.
                                        Half        Half      Half
                                        year        year      year 
                                        Mar 98      Sep 97    Mar 97

Operating profit before debt
 provisions ($M)                         120         118       107
Economic loss provisioning ($M)           28          29        28 
Operating profit after tax ($M)           59          65        58 
Operating profit after tax as a 
% of average risk weighted assets       0.8%         0.9%      0.8%
Operating expenses to net 
operating income                       69.5%        71.4%     71.3%
Operating expenses to average assets    2.9%         3.2%      2.9%
Net specific provision as a % of
average net advances                    0.0%        (0.1%)    (0.0%)
Net non-accrual loans ($M)               65           74        75
Net non-accrual loans as a % 
of net advances                         0.4%         0.5%      0.5%
Lending growth (%)                     (1.8%)        4.1%      1.8% 
Total assets ($M)                    19,897       18,831    18,017 
Risk weighted assets ($M)            13,656       14,332    13,840
Employees (FTE) - Permanent           5,132        5,564     5,706
Employees (FTE) - Temporary             180          107        64
New Zealand's profit before debt provisions was steady. However,
profit after tax fell due to a higher effective tax rate.

Competitive pressures and interest rate volatility led to a 30 basis
point contraction in margin, partially offset by lending growth (the
latter masked by the impact of a weaker New Zealand dollar).
Increased fee income reflected higher current account fees.

Operating costs were flat, with a reduction expected in the second
half.

Major restructuring programmes to improve efficiency continue, with
focussed distribution channels and the integration of systems support
with Australia.

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