Buoyed by a surge in lending, Australia’s fifth-largest retail bank generated $849 million in income for the six months to December 31, up 5 per cent on the previous half and 3 per cent better than the same period a year ago.

The revenue increase was matched by a $17.6 million fall in operating expenses for the half following cost-cutting that included a series of redundancies in November and December.

The cuts also included a net reduction of 12 branches offset by a 16 per cent increase in mobile relationship managers.

The boosted statutory net profit is 419 per cent higher than the profit delivered in the second half of the 2020 financial year and up 67 per cent on the same period last year.

As part of its presentation to shareholders and the Australian Securities Exchange this morning, the bank declared a fully-franked interim FY21 dividend of 23.5 cents per share on top of a 4.5 cents per share final dividend for FY20.

While the interim first-half interim dividend was a significant increase on the previous half, it was down 24 per cent on the first half of FY20, prior to the coronavirus pandemic.

The positive result follows a lean previous 12 months for the bank, which saw its share price halve from $10.57 on February 17 last year to be consistently below $6 from mid-March to mid-May. Its share price has since recovered to be $9.49 at this morning’s opening.

Managing Director and CEO Marnie Baker said the bank was well progressed with its strategy to grow and accelerate its transformation to be Australia’s bank of choice.

“Our strategy – supported by our purpose to feed into prosperity, not off it – and our strong financial position saw us further grow customer numbers and market share in lending and deposits, whilst also reducing costs and simplifying our business,” she said.

“We delivered on our growth opportunities and continued to support our customers, communities and all stakeholders, notwithstanding the challenges faced by many Australians and the economy continuing into the half.

“In line with previous halves, the number of customers choosing to bank with us climbed again, increasing 4.3 per cent to 1.96 million from 30 June.”

An increase in cash earnings was enjoyed across all three divisions and was driven by the Business division (up 39 per cent), followed by Agribusiness (up 25 per cent) and Consumer (up 12 per cent), which accounts for about 70 per cent of earnings.

“For the fourth half running, our Consumer division again outperformed the industry, recording strong growth in residential lending at $3 billion on the prior half,” Baker said.

COVID-19 support packages at December 31 included deferred loans of about $1.1 billion across 3,087 customer accounts, down 86 per cent from the May peak of about $6.9 billion. About 65 per cent of outstanding support packages are for residential loans with the remainder commercial (30 per cent) and consumer packages.

Baker said the bank had played an important role in supporting customers through COVID-19 while providing credit to support the economy.

“Deferrals significantly reduced from their peak in May, including in Victoria, and our strong capital position ensures we are well-positioned to manage through the pandemic,” she said.

“Our results demonstrate the strength of our strategy, business model and ability of our people who moved quickly and acted with care to support our customers and their communities.

“With business confidence and consumer sentiment up, an ongoing low-rate environment, a growing housing market, an improving jobs market, continued growth in regional Australia, and our customers showing remarkable resilience and adaptability, we are buoyed by the outlook.

“However, we always take a long-term view, and we remain mindful of the global and local impacts of the pandemic, international trade sentiment, decisions on government support measures and the ongoing reality of natural disasters and climate change.”