MyState (ASX:MYS) executives highlighted double-digit profit growth, accelerating lending momentum, and progress on merger integration during the company’s interim 1H 2026 results briefing. Managing Director and CEO Brett Morgan and CFO Gary Dickson said the group’s focus over the half included scaling higher-margin equipment finance, advancing a single-bank operating model following the merger with Auswide, and improving efficiency through cost synergies.
Profit growth and dividend increase
Morgan said the group delivered “double-digit profit growth” in the first half. On a reported basis, underlying NPAT rose 18.4%. On a pro forma basis—which includes Auswide earnings for the full period—underlying NPAT increased 23% versus 1H 2025 and 13% versus 2H 2025.
The board declared an interim dividend of AUD 0.12 per share, fully franked, up from AUD 0.105 per share in 1H 2025. Dickson said the payout ratio was 72.2% of underlying NPAT and that the dividend reinvestment plan would be offered at a 1.5% discount. Morgan also noted underlying EPS rose 11.1% to 16.6 cents per share.
Merger integration: synergies, single license, and one future brand
Management emphasized progress integrating MyState and Auswide, describing the combination as a “transformational merger” completed a year ago. Morgan said 98 of 215 integration initiatives were completed during the half and that the integration budget remained unchanged at AUD 29 million.
Dickson said annualized run-rate synergies reached AUD 10.4 million as of 31 December, slightly above prior guidance, and that AUD 5 million of merger-related synergies were realized during the half on a pro forma basis, largely offsetting inflation-driven cost growth. He reiterated the longer-term target of AUD 20–25 million in annual pre-tax cost synergies in FY 2028, with timing in outer years subject to change.
A major operational milestone was the move to a single banking license in December. Morgan said the transition delivered “immediate capital, revenue, and efficiency benefits,” including the ability to optimize liquidity levels. Dickson added that operating a single balance sheet improves capital management flexibility.
Morgan also announced a decision to adopt “MyState” as the single future bank brand for the retail bank. He said the company’s research found MyState to be strong in Tasmania and that a single brand was preferable to running two brands or launching a new one. He said the decision does not change core banking system work, and that there was “no impact to customers at all at this time,” as the announcement was a decision rather than a rollout.
Balance sheet growth: mortgages, deposits, and net interest margin
The group’s home loan portfolio increased 0.4% to AUD 12.9 billion at 31 December. Morgan said overall home loan growth reflected MyState Bank growing broadly at system, while the group deliberately used the Auswide balance sheet to prioritize higher-margin equipment finance growth, which came “at the expense of the Auswide home loan portfolio,” which contracted 4% over the half. He added that home loan application volumes accelerated in the second quarter and said the Auswide home loan book had returned to growth.
In Q&A, Morgan said the company expects to grow “at or above market” in mortgages in the next period after acknowledging the prioritization of SelfCo had a larger-than-expected impact on home loan growth earlier in the half. He also said the group has capacity to adjust its conservative mortgage risk mix, including via growth in investor lending, while also allocating capital to equipment finance.
Dickson said net interest income rose 12% due to a larger average balance sheet, while other banking income rose 32%. He said wealth management income increased 12% due to higher trustee services income and loan establishment fees associated with commercial lending.
Net interest margin (NIM) declined versus the most recent half but was higher than the prior corresponding period. Dickson cited competitive pressures and mix effects, including home loan and deposit price competition, customer switching behavior, the impact of cash rate reductions, higher capital relief securitization, and the impact of “running two bank balance sheets.” These were partly offset by the contribution from SelfCo. In Q&A, management said December 2025 “exit NIM” was a couple of basis points higher than the half’s average of 146 basis points, helped by running down excess liquidity following an October term securitization and optimization of the liquid asset portfolio after moving to a single banking license.
On deposits, Dickson said the customer deposit ratio was broadly stable at 70% and that customers shifted from term deposits to at-call savings products. Morgan said the company launched “Hello Saver” in December as a digitally offered savings account aimed at attracting customers outside core markets and providing flexibility to “run off more price sensitive deposits.” In Q&A, management described the product as a soft launch that was gaining momentum.
Morgan said deposit growth appeared subdued in headline figures partly because securitization reduced the need for deposits. He said “prime” deposits (including branch, digital, and Elders alliance deposits) grew around 2% over the half, while higher-cost third-party deposits were run down. Management also said they expect acceleration in the Elders channel as its “prime time of the year” begins in the second half.
SelfCo and wealth businesses increase contribution
Management pointed to increased contribution from higher-return businesses. Morgan said equipment finance (SelfCo) and wealth (TPT) together delivered 11% of group underlying NPAT in the half. SelfCo alone contributed 6% of group underlying NPAT, and Dickson said the business contributed AUD 1.8 million in underlying NPAT after being “broadly breakeven” at acquisition.
SelfCo’s loan book grew 64% in the first half, and Dickson said it has grown 135% since the merger. Management described SelfCo as focused on Australian small businesses, originating loans nationally via brokers, with trucks and trailers representing a large portion of the asset mix. Dickson said credit quality remains sound and provisioning remains in line with historical loss rates.
In Q&A, Morgan said SelfCo’s growth was driven by removing funding and capital constraints rather than changing risk appetite or relying on sharp pricing. He said the business has long-tenured leadership and emphasized that the group would not adjust risk settings to chase growth.
TPT Wealth also posted growth, with Dickson reporting first-half revenue up AUD 8.3 million (12%) driven by commercial lending activity and trustee services income. Trustee services funds under management increased 11% to AUD 531 million, reflecting growth in compensation trusts and managed funds. Morgan said TPT delivered a 27% profit increase supported by process enhancements.
Capital, asset quality, and priorities for the next six months
Dickson said the group remains well capitalized and that dividends were supported by organic capital generation. As of 31 December, the total capital ratio was 16.9%, managed down following scheduled Tier 2 subordinated debt redemptions in July and September totaling AUD 37 million.
On credit quality, Dickson said the mortgage portfolio remains focused on low-risk owner-occupied lending, with approximately 79% of the book below 80% LVR. He said 90-day arrears improved to 28 basis points from 44 basis points at 30 June and were “well below the sector’s average.” He added that home loan customers continued to show resilience with stable employment and housing markets.
Looking ahead, Morgan said priorities over the next six months include continuing integration to deliver synergies, accelerating growth in the retail bank, scaling equipment finance, and targeting growth in funds and private trustee services. He also said the group would “seek and consider inorganic opportunities” that deliver shareholder value.
About MyState (ASX:MYS)
MyState Limited, through its subsidiaries, provides banking, trustee, and managed fund products and services in Australia. The company operates through Banking and Wealth Management segments. It offers personal and commercial lending, mortgage lending, savings and investment, and insurance products; and wealth management services. The company also provides a range of financial services, including managed investments; commercial lending; and trustee services that comprise estate planning, administration, and charitable trusts to individuals and corporate clients under the TPT Wealth brand.
