Home seeks productivity fix

Home Building Society will seek productivity improvements, continue to invest in the brand and marketing, and begin to “account like a bank” according to an investor presentation from the company. The investor presentation listed two corporate objectives: the first was to realise “inherent value”, and the second was to drive earnings per share growth to 20 per cent. In the short term, though, Home set a 2005 financial year target for underlying earnings per share growth of 15 per cent. Home set a number of other financial targets for 2005, including double digit asset and deposit growth, and the aim of achieving a cost to income ratio of less than 75 per cent. The target expense ratio compares with 83 per cent in 2004 and 79 per cent in 2003. Other business objectives outlined by Home yesterday include setting a limit on the commercial book of 15 per cent of all lending assets, and “taking advantage of the cycle to exit higher risk provisions”. Home would then reallocate capital from 100 per cent risk weighted home loans to 50 per cent risk weighted residential loans.