St George predicts double-digit growth

St George Bank reported an 18 per cent increase in net profit to $717 million in the year to September 2004, and forecast double-digit earnings per share growth for the next two years. The bank’s return on equity fell to 15.1 per cent from 15.9 per cent, however. Even so, managing director Gail Kelly told an investor briefing that “we really do believe we are in a sweet spot at the moment. We have a good management team, no distractions and room to grow.” While St George extended its guidance for 10 per cent plus earnings per share growth through to 2006, analysts noted that the bank’s net interest margin fell more than expected. One reason is that 43 per cent of St George’s new home loans are now sold through mortgage brokers, compared with 39 per cent a year ago. The bank has also waived some lending fees to grow market share.