Financial Statements
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IMB ANNUAL REPORT 2010 IMB ANNUAL Celebrating 130 years Annual Report 2010 IMB Ltd 253-259 Crown Street Wollongong NSW 2500 imb.com.au IMB Ltd 92 087 651 974 3 Highlights 19 Corporate Governance 5 Five Year Summary 23 Directors’ Report 7 Chairman’s Letter 31 Lead Auditor’s Independence Declaration 9 Chief Executive’s Review of Operations 32 Financial Statements 11 Directors’ Particulars 86 Directors’ Declaration 13 Our Community 87 Independent Auditor’s Report 15 IMB Community Foundation Projects 88 Locations 17 Our Staff 89 Corporate Directory About IMB IMB is one of Australia’s largest building societies with assets more Our Vision than $4.6 billion and around 180,000 members. Established in 1880, we are also the longest standing mutual building society in NSW. IMB’s vision is to be the alternative to the Bank’s in regions in which we operate. IMB offers full-service face-to-face and electronic banking facilities including home and personal lending, savings and transaction accounts, term deposits, business banking, financial planning and a Our Mission wide range of insurance products. IMB will continue as a profitable, independent mutual building society providing excellent financial services and solutions to its IMB boasts 41 branches throughout the Illawarra, Sydney, NSW South members for the advancement and welfare of all its stakeholders. Coast, the ACT and in Melbourne, supported by an effective mobile lending team and ATM network. IMB also provides commercial loans through broker groups across Australia. Our Values IMB is regulated by the Australian Prudential Regulation Authority IMB’s values reflect the way we do things at IMB. They are the and are a member of ABACUS, an independent organisation guiding principles by which we run the business and conduct representing mutual building societies and credit unions. ourselves in all interactions with all our stakeholders. They include Integrity, Community, Co-operation, Excellence & Respect. Notice of Annual General Meeting The annual general meeting of IMB Ltd will be held at the Hoskins Room, Novotel Northbeach, 2-14 Cliff Road, Wollongong on Tuesday, 26 October 2010. 1 IMB Annual Report | 2010 “At IMB we’re big enough to challenge the Banks, expand our Branch Network, and to offer secure, low cost banking to our members – we call it Better Value Banking. We also offer the benefits of being small enough to reward our members, stay local and care for our community.” IMB Annual Report | 2010 2 2006 69.4 2006 4,228 2007 67.5 2007 4,628 2008 65.7 2008 4,517 2009 64.4 2009 4,444 2010 60.1 2010 4,696 3 magazine Consumer Finance Awards 2010. IMB won the the 2010.IMBwon Awards Finance magazine Consumer retaining the highest honours in the prestigious thehighesthonoursinprestigious retaining running, the fourth time IMB has won the award insixyears. thefourth theaward timeIMBhaswon running, In its 130th year, IMB secured back-to-back recognition, recognition, back-to-back IMBsecured In its130thyear, Highlights of2010 Building Society of the Year 2010 award for the second year thesecondyear for 2010award Year Building Society ofthe IMB AnnualReport |2010 Return on average average on Return 20062006 11.1669.4 20062006 2,6524,228 Total assetsTotal $ million$ equity % increase increase 20072007 11.7667.5 20072007 2,7454,628 15.8% 15.8% 5.7% 20082008 65.711.87 20082008 4,5172,971 20092009 64.412.02 20092009 4,4443,158 20102010 60.1 13.92 20102010 4,6963,363 Members’ deposits Members’ deposits Dividends cents cents Dividends 20062006 11.1620.0 20062006 2,652 1,120.2 share increase share 5.5 cents per per share $ million$ 20072007 11.7623.0 increase 20072007 2,745952.9 6.5% 12% 20082008 7% 11.8723.5 20082008 870.72,971 20092009 12.027% 23.5 20092009 565.1 3,158 20102010 13.92 29.0 20102010 724.9 3,363 17% 5% 12% 7% 4% 17% 11% 37% 7% 2006 20.0 approved Loans 20062006 17.628 1,120.2 $ million$ increase Coast NSW South Highlands Southern Southern NSW Illawarra 2007 19.959 2007 23.0 Deposits location by 2007 952.9 28.3% 17% 5% 11% 2008 23.5 20082008 870.721.579 2009 22.850 2009 23.5 4% 2009 565.1 2010 29.071 2010 37% 29.0 2010 724.9 4% 5% 7% 7% 12% 11% Other Victoria ACT Other NSW Sydney 2006 17.628 Profit after tax $ million$ increase 37% 2007 19.959 27.2% 2008 21.579 Money 2009 22.850 7% 7% 22% 22% 10% 11% 26% 2010 29.071 10% Loans location by 22% Sydney Coast NSW South Highlands Southern Southern NSW Illawarra 3% Efficiency ratio % 2006 69.4 2006 4,228 improvement 7% 3% 7% 2007 67.5 2007 4,628 4.3% 1% 10% 2008 65.7 2008 4,517 1% 3% 3% 10% 7% 7% 22% 2009 64.4 2009 4,444 3% 10% 2010 60.1 2010 4,696 3% Other Victoria ACT Other NSW QLD WA 26% 1% 11% 2006 11.16 2006 2,652 10% 2007 11.76 2007 2,745 2008 11.87 2008 2,971 26% 11% 2009 12.02 2009 3,158 2010 13.92 2010 3,363 2006 20.0 2006 1,120.2 2007 23.0 2007 952.9 2008 23.5 2008 870.7 2009 23.5 2009 565.1 2010 29.0 2010 724.9 2006 17.628 2007 19.959 2008 21.579 2009 22.850 2010 29.071 • A number of our lending and deposit products were • We continued our successful traineeship program, awarded the top rating by independent reviewers, with the recruitment of 8 new trainees in addition including the CANNEX First Home Buyer Award for NSW to the 55 that have already been trained since its and ACT. introduction in 2005. • We introduced a number of new products including the • Our commitment to our entry level employment and Kick Start savings accounts – a total banking solution for training programs were recognised, with IMB receiving the U18’s or full time students under 23, a bank bill linked loan top award for the Illawarra and South East NSW region in for business members and a New Car loan. the Minister’s Awards for Excellence. • We rolled out Visa ‘chip’ cards to provide increased • We allocated a further $440,000 to the IMB Community card security. Foundation, bringing the total amount of funds granted to the community to $4.75 million since 2000. • We launched our upgraded website. • We again received the Illawarra Business Chamber’s award • We converted our Narellan loan centre to a full service for the best Professional and Commercial Service Business branch and relocated our branch at Albion Park. – the third year in succession, as well as an award for • We were named exclusive provider for the ACT Housing Workplace Safety and OH&S. Shared Equity scheme. IMB Annual Report | 2010 4 Five Year Summary 2010 2009 2008 2007 2006 $000 $000 $000 $000 $000 Financial performance Interest income 266,742 304,007 344,334 307,500 260,874 Interest expense 173,723 227,397 271,222 235,856 194,101 Interest margin 93,019 76,610 73,112 71,644 66,773 Non interest income 14,815 17,141 18,633 15,846 16,262 Bad and doubtful debts expense 3,638 1,790 1,522 1,221 1,075 Non interest expense 62,644 59,264 59,314 58,232 56,868 Profit before tax 41,552 32,698 30,908 28,037 25,092 Income tax expense 12,481 9,848 9,329 8,078 7,464 Profit after tax 29,071 22,850 21,579 19,959 17,628 Financial position Assets Loans to members 3,576,564 3,476,040 3,634,913 3,499,034 3,308,138 Liquids 1,087,047 937,532 851,243 1,097, 825 889,024 Other 32,204 30,611 31,039 30,939 30,579 4,695,815 4,444,183 4,517,195 4,627,798 4,227,741 Liabilities Deposits 3,362,526 3,158,283 2,971,104 2,744,737 2,652,087 Securitised loans funding 1,064,650 1,025,682 1,300,466 1,639,772 1,346,436 Other 48,182 61,057 54,869 66,101 64,631 4,475,358 4,245,022 4,326,439 4,450,610 4,063,154 Net assets 220,457 199,161 190,756 177,188 164,587 Total assets 4,695,815 4,444,183 4,517,195 4,627,798 4,227,741 Performance ratios Capital adequacy % 12.0 11.6 11.6 12.4 11.0 Total asset growth % 5.7 -1.6 -2.4 9.5 14.5 Net asset growth % 10.7 4.4 7.7 7.7 6.5 After tax return on average net assets % 13.92 12.02 11.87 11.76 11.16 Non interest income/average total assets % 0.33 0.39 0.41 0.36 0.40 Non interest expenses/average total assets % 1.40 1.33 1.32 1.31 1.41 Non interest expenses/operating income % 60.1 64.4 65.7 67.5 69.4 Bad debts expense/average loans % 0.10 0.05 0.04 0.04 0.03 Cost of funds % 4.1 5.4 6.4 5.6 5.1 Interest margin % 2.11 1.75 1.65 1.63 1.65 Total loans approved $m 724.9 565.1 870.7 952.9 1,120.2 No 6,257 6,258 8,961 9,809 11,549 Home loans approved $m 582.4 456.2 718.0 781.4 883.2 No 2,873 2,499 4,128 4,776 5,444 Average home loan approved $000 202.7 182.6 173.9 163.6 162.2 5 IMB Annual Report | 2010 In 2010, IMB proudly celebrated its 130th anniversary.