MyState Limited trading and guidance update for FY24

MyState Limited (ASX:MYS) has provided a trading and guidance update for FY24. The company has decided to prioritize margin over growing its lending book at multiples of the system in FY24 due to prevailing market conditions. Home loan book growth was 1.9x system in October, and growth over the four-month period to 31 October 2023 was broadly in-line with system growth. Customer funding as a percentage of total funding was in-line with guidance at 70% as of 30 November 2023, with a shift from lower cost transaction and savings accounts to higher cost term deposits. The average NIM for 1H24 is projected to be in the range 1.45% to 1.49% (2H23:1.55%). Total expenses for the Group for the five-month period ended 30 November 2023 were lower than the same time last year, reflecting MyState's ongoing focus on operating efficiency in a high-inflation environment. Total capital remained strong at approximately 15.4% as of 30 November 2023, while 30-day arrears of 0.93% remained below the industry average (30 June 2023: 0.81%). MyState now expects various outcomes in FY24, including lower lending growth, higher deposit composition, and a decrease in earnings per share compared to FY23.

MyState Limited executive commentary on FY24 trading update and guidance

Managing Director and CEO Brett Morgan stated, 'Given the economic and competitive environment, MyState has taken the decision to temper its FY24 lending growth. We now expect growth to be closer to system.' Mr Morgan also mentioned, 'Total expenses for the Group for the five-month period ended 30 November 2023 were lower than the same time last year, reflecting MyState's ongoing focus on operating efficiency in a high-inflation environment.'

Summary of MyState Limited trading update and guidance for FY24

MyState Limited (ASX:MYS) has adjusted its approach for FY24, prioritizing margin over lending growth in response to market conditions. The company expects lower lending growth, higher deposit composition, a decrease in earnings per share compared to FY23, and a change in the cost to income ratio and return on equity. Despite the challenging economic and competitive environment, MyState remains focused on maintaining operating efficiency and strong capital position. The company's decision reflects its adaptability to market dynamics and commitment to sustainable growth in the financial services sector.