IMB Bank’s Profitability Boosted by Net Interest Margin Increase
IMB Bank, under the leadership of chair Catherine Aston, has reported a significant lift in its net interest margin, a key factor driving the bank’s profitability. The bank’s net interest margin increased by 25 basis points to 2.32 per cent, a substantial boost that strongly contributed to the bank’s profit growth.
IMB Bank chair Catherine Aston
Significant Growth in Net Profit
The year to June 2025 saw the bank posting a net profit of $38.1 million, a 30% increase compared to the FY2024 result. As per the bank’s annual report, the impressive figures are a testament to the efficacy of the bank’s direct distribution model and its balanced approach to pricing for borrowers and depositors.
Changes in Regulatory Capital Calculations
However, it is to be noted that from January 2025, the Australian Prudential Regulation Authority (APRA) has ceased to recognise the value of the bank’s ordinary shares in its regulatory capital calculations. This change has partly led to a slight dip in the total capital adequacy ratio, which fell from 16.3 per cent to 15.7 per cent.
Off-Market Share Buyback Initiative
Following the regulatory capital change, and with a clearer understanding of its capital position, the IMB board has announced an off-market share buyback initiative. Through this, the board aims to buy back up to $7.5 million of IMB ordinary shares through an off-market tender process.
“Regular off-market buybacks are a key element of IMB Bank’s capital strategy,” the bank stated, adding that this move will simplify the bank’s mutual structure and facilitate it in achieving its strategic objectives. It also offers an efficient liquidity option for shareholders who wish to exit their shareholding.
Historical Context of Buybacks at IMB Bank
Since 2012, IMB has conducted six buybacks, which reduced the number of ordinary shares on issue by almost 16 million shares. This represents approximately 40% of the shares on issue at the start of the buyback program. Given the last sale price of IMB shares on Friday of $2.65, this buyback would represent around 12 per cent of the shares on issue.
IMB Bank, with its 227,000 members, continues to uphold its commitment to delivering shareholder value and maintaining strong financial performance.
Read more about IMB Bank’s financial performance and buyback plan Here.
