Challenging market hits P&N

Soft economic conditions have resulted in P&N Bank taking a significant hit to its earnings with the credit society reporting a 30 per cent fall in profit.

After-tax profit for the 2013-14 financial year dropped from $13.1 million to $9.1 million, which chief executive Andrew Hadley attributed to macroeconomic conditions.

“There is no doubt that we have been impacted by the softer economic conditions in Western Australia,” Mr Hadley said in the bank’s annual report.

“Whilst there is little we can do about the macroeconomic events, we can control our internal behaviour and I am conscious that P&N as a brand needs to become better at selling its value proposition to the broader marketplace,” Mr Hadley said.

The bank rebranded from the Police & Nurses Credit Society to P&N in March 2013 in an effort to broaden its reach to the wider market.

Mr Hadley was appointed as chief executive in November.

“While profit is an important indicator of our performance and necessary for growth, ultimately our success will not be measured by profit alone,” he said.

“We must also consider the value we deliver to members.”

P&N’s revenue decreased across the board in the year to June 2014, with interest revenue dropping nearly 11 per cent.

However, once reduced interest expenses were taken into account the net interest income was more or less on par with the previous year.

Non-interest revenue and other income decreased by 6 per cent, contributing to a slight fall in total income from $83.5 million to $82.9 million.

The bank’s existing members drove good activity through the year with member deposits increasing by $260 million to $2.29 billion, which P&N attributed to more competitive product offerings.