Tuesday 09 August 2016 by FIIG Research ripples_on_water Company updates

MyState confirms discussions on potential acquisitions

MyState has responded to media speculation about the potential acquisition of La Trobe Financial

It confirmed it has held discussions with a number of parties relating to possible acquisitions including La Trobe. At this stage no decision has been reached and there is no certainty that any transaction will eventuate.

As previously highlighted, MyState is seeking to grow rapidly, which can lead to greater risk taking. An acquisition of La Trobe would be illustrative of this.

MyState is currently focused on low-risk, secured residential mortgages with very low credit loss experience, as demonstrated by its net charge offs to average customer loans ratio of 0.03%. This level is consistent with similarly sized peers.

La Trobe however tends to focus on non-conforming lending and higher risk activities.

MyState’s risk profile would likely increase with the acquisition of La Trobe, especially given its comparative size.

  MyState La Trobe
Total revenue $216m $208m
Net assets $293m $113m
AUM $3.8bn $3bn