MyState Limited Annual Report 2023

FY2023 Annual Report · MyState Limited
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Together 
for the better

Annual Report 
2023

MyState Limited

Annual Report 2023

About MyState Limited
MyState Limited (MYS) is the non-operating 
holding company of a diversified financial 
services group listed on the ASX and is a 
leading provider of banking, trustee and 
wealth management services to customers 
across the country through our retail brands  
– MyState Bank and TPT Wealth.

At MyState Limited we understand the importance of tailoring financial services to all stages of life. We’re always ready to serve the best interests of our customers and shareholders.Contents

02 Our purpose 03 Our values

05 Highlights

06 Group 

performance

08 Chair’s review

10 Chief Executive 

Officer’s review

12

16

Our strategy

14

Approach  
to risk

ESG update

24 Board of 

Directors

26 Key 

Management 
Personnel

28 Directors’  

report

35 Remuneration 

report

53 Financial  

report

104 Shareholder 

information

105 Corporate 

directory

Annual General Meeting

The 2023 Annual General Meeting of 
MyState Limited will be held on Thursday,  
19 October 2023 at 10:30 a.m. (Hobart time) 
at the Best Western Hotel, 156 Bathurst 
Street, Hobart and online.

In accordance with the Corporations Act 2001, 
hard copies of the Notice of AGM (NoM) will 
not be sent to shareholders unless they have 
previously requested a hard copy. Instead, 
the NoM and other related material, including 
an online meeting guide, can be viewed and 
downloaded from our AGM website accessible 
via mystatelimited.com.au

Corporate Governance

The Board of MyState Limited is committed 
to upholding the highest levels of corporate  
governance and subscribes to the Corporate  
Governance Principles and Recommendations 

published by the ASX Corporate Governance 
Council in order to promote investor 
confidence in the company and within the 
broader market. In addition, the Australian 
Prudential Regulation Authority (APRA) 
requires MyState Limited, as the non-
operating holding company of a bank, to 
comply with the prudential obligations that 
apply directly to its wholly owned subsidiary 
MyState Bank Limited.

To this end, the Board of MyState Limited 
has a governance framework whereby the 
appropriate Board policies, meeting the 
APRA prudential requirements, apply across 
the Group.

MyState Limited’s Board-approved 
Corporate Governance Statement is 
available on the Company’s website  
at mystatelimited.com.au

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01

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Together for

the better.

Our purpose

We’re a Tasmanian-based financial  
services company with big ambitions.  
We make managing your money easy,  
to help you achieve what matters most.  
We invest in our people and communities, 
so together we can thrive.

In late 2022, one of our defining 
moments was reimagining  
our purpose. 

A purpose is the North Star of any 
organisation, and when our people 
told us our original purpose was 
no longer resonating, we knew 
something had to change.

Our team created a new purpose 
from the ground up, working  
together to capture the care for 
our customers, and the need for 
continued investment in our people 
and the communities that we serve.

Our people were committed to 
creating a purpose that represented 
the ways we collaborate with 
each other, our customers, our 
shareholders and our community  
to show how we all work together  
to deliver the best outcomes. 

The final result is a long form purpose 
statement capturing who we are,  
why we exist and our continued  
focus on growth and investment.  
Our purpose is lived through our  
rally cry – Together for the better.

Since launching our purpose in 
December 2022, it has already 
informed a number of our business 
decisions as we strive to become  
a purpose-driven organisation.

What does  
this mean for:

Our shareholders
We deliver sustainable,  
profitable growth

Our community
We invest into and support  
our local communities

Our customers  
and clients
We care about what matters

Our people
We grow and achieve  
great things

02

MyState LimitedAnnual Report 2023p
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03

Our values

Create  
customer ‘wow’

Chase  
the better

Collaborate  
to win

•  We walk in our 

customers’ shoes 
and appreciate their 
perspectives.

•  We think and act  

in the best interests  
of our customers.

•  We are clear, concise 
and trustworthy in our 
customer interactions.

•  We design and deliver 
exceptional customer 
experiences, with a 
human touch.

•  We make things  

simpler and easier  
for our customers.

•  We are bold in our 

ambition.

•  We seek out and 

embrace the change 
that is required to 
succeed.

•  We have the courage  
to try new things and 
grow from our failures.

•  We simplify (and 

digitise) to deliver 
exceptional customer 
experiences, with a 
human touch.

•  We seek industry-

leading productivity  
and always drive for 
better outcomes.

•  We care for each other,  
our customers, partners  
and community.

•  We give our best,  

do the right thing, and 
trust our colleagues  
to do the same.

•  We hold each other  

to account.

•  We openly share 

information so that 
everyone can make 
informed decisions.

•  We reach out across 
teams to rapidly 
solve problems – and 
celebrate our successes 
and learnings. 

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
We’re focused on the  
long-term prosperity of our 
customers and shareholders 
and are committed to 
growing our business 
ethically and sustainably.

0404

MyState LimitedAnnual Report 2023Highlights

Home loan book

+14.1%

From FY22

Customer deposits

+12.3%

From FY22

$7.8b

Home loan growth 2.9x 
system in FY23

$6.2b

Strong deposit growth driving 
favourable funding mix

Net profit after tax

Record

$38.5m

Highest NPAT  
on record

New customer growth

+33%

From FY22

+25,690

New to bank 
customers

Strong uplift on FY22

Cost to income ratio

-440bps

From FY22

Earnings per share

+16.8%

From FY22

64.0%

Growth achieved  
more efficiently

35.5cps

Uplift on FY22

Net Promoter Score

+35

As at June 2023

Strong customer 
advocacy

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05

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group performance

Net profit after tax 
($ million)

Earnings per share
(cents)

Dividends – fully 
franked per share 
(cents)

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2019 2020 2021 2022 2023

2019 2020 2021 2022 2023

2019 2020 2021 2022 2023

Return on average 
equity (%)

Cost-to-income 
ratio (%)

Net interest income 
($ million)

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2019 2020 2021 2022 2023

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07

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chair’s review

Core earnings

$57.7m

Earnings per share

+16.8%

Net interest margin (NIM) eased 4bps 
to 1.63% due to intense competition 
for both mortgages and retail 
deposits, with wholesale funding costs 
also increasing significantly.

TPT Wealth’s result was more subdued 
in FY23 as we refocused our energies 
on Tasmania and cut costs interstate.

TPT Wealth income eased 3.5%  
to $14.4m. 

Dividend and capital
In the 2023 fiscal year, the Board 
determined to pay a final dividend of 
11.5 cps, fully franked, equivalent to 
a payout ratio of 64.9% of after-tax 
earnings.

This decision is in line with the current 
dividend guidance range and strikes a 
balance between pursuing our growth 
strategy and rewarding shareholders.

During the year MyState issued a 
$400m Term RMBS and established  
a new committed warehouse  
funding agreement. 

Both transactions support MyState’s 
growth strategy and provide  
flexibility to MyState’s capital 
management options.

Vaughn Richtor 
Chair

Our growth strategy is on track, as is our 
transformation into a first-choice financial  
services company with a strong digital focus.

I am pleased and proud to present 
the FY23 Annual Report as chair of 
MyState Limited.

In a tumultuous year in financial 
services our company has maintained 
momentum as we deliver on our 
growth strategy.

In FY23 we delivered a record profit 
and increased earnings per share.

Our key portfolios of mortgages  
and savings saw strong above- 
industry growth.

Our strategy of deepening 
relationships with independent 
mortgage brokers continues to pay 
dividends with robust growth in home 
lending at almost three times the 
industry average.

We achieved record customer 
growth, attracting 25,690 new to bank 
customers from within and outside 
Tasmania. 

I am pleased to say the growth came 
while maintaining high customer 
advocacy as measured by the Net 
Promoter Score – a key measure  
of our customer focus.

Our growth strategy is on track, as is 
our transformation into a first-choice 
financial services company with a 
strong digital focus.

The digital transformation is improving 
our cost to income ratio, making 
growth in customers and balance 
sheet sustainable.

I congratulate the team at MyState 
for continuing to serve the Tasmanian 
community and maintaining  
customer focus. 

Tasmania is our heartland, and we 
continue to build our strong brand  
in the state while increasing our  
national footprint.

Operating performance 
Statutory net profit after tax (NPAT)  
for the fiscal year was a record  
$38.5 million (m), up 20.2% on FY22.

Earnings per share increased 16.8%  
to 35.5 cents per share (cps). 

Core earnings (operating profit before 
bad and doubtful debts expense and 
income tax) increased 30.3% to $57.7m 
with total operating income up 14.4% 
and operating expenses up 7.1%.

Significantly operating income is 
outpacing expense growth.

The cost-to-income ratio improved  
by 440 basis points (bps) to 64% for 
the full year. 

Return on equity improved 100bps 
over FY22 to 8.7%.

The total loan book grew by 13.5%  
to $7.9 billion (b), while home lending 
grew almost three times system growth.

Customer deposits grew at twice 
system growth. 

08

MyState LimitedAnnual Report 2023Statutory net profit after 
tax for the 2023 financial 
year was a record $38.5m 
up 20.2%.

Growth strategy 
Our growth strategy remains on 
track with prudent, sustainable and 
profitable growth at its heart.

The current Australian banking market 
is highly competitive and credit growth 
is slowing. MyState’s robust growth in 
mortgages over the past two years is 
forecast to ease to nearer to two times 
system growth for FY24.

MyState has a proud Tasmanian 
heritage that gives us a competitive 
advantage at home. 

Our focus remains on sustainable 
growth while maintaining  
customer focus.

We continue to pursue the home state 
advantage combined with prudent 
expansion of our national footprint.

I would like to thank shareholders for 
not only supporting the business, but 
also being loyal customers.

Our future
FY23 has been a solid year and put 
the business on track to deliver on  
our growth strategy.

Our future is bright with progress  
on system improvements and  
cost management.

Vaughn Richtor 
Chair

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09

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chief Executive Officer’s review

Brett Morgan
Managing Director and CEO

We delivered mortgage growth of over 14% to $7.8b, 
almost three times the industry average, at a time  
of intense competition.

Home loan book

$7.8b

New to bank 
customers increased

33%

Delivering for customers 
2023 has been a significant year for 
both customers and MyState and I am 
proud to say the business has ended 
the year in very good shape.

The re-emergence of inflation, and 
the fastest increase in interest rates 
in more than 30 years, has tested 
customers and the bank.

Mortgage customers have shown 
resilience, having built up savings 
when rates were low. One in three  
of our mortgage customers are more 
than six months ahead in repayments. 

We proactively contact every 
customer coming off low fixed interest 
home loans to offer help as they 
transition to higher repayments.

Our focus on the customer has seen 
the rate of late loan repayments track 
below the industry average.

Over the year, we also helped 
customers save by substantially 
increasing our award-winning bonus 
saver and term deposit rates.  
Our competitive rates attracted  
many new customers and increased 
deposit growth to double the  
industry level.

Delivering on our  
growth strategy
In this turbulent environment, the bank 
delivered record customer growth, 
33% higher than the previous year,  
and strong above-system growth  
in both mortgages and savings.

This growth was achieved while 
maintaining prudent risk settings.

We delivered mortgage growth  
of over 14% to $7.8b, almost three 
times the industry average, at a time 
of intense competition.

Our customer deposits grew by over 
12%, double the industry average,  
to $6.2b.

We welcomed a further 25,690 new  
to bank customers across Australia.

We achieved this growth more 
efficiently as we leveraged digital 
systems and lowered the cost to 
income ratio by 440bps to 64%.

Consequently, we delivered a  
record NPAT of $38.5m, up 20.2%  
on the previous year.

Core earnings increased 30.3%  
to $57.7m.

We were able to achieve this whilst 
having a high level of customer 
advocacy with a Net Promotor Score 
of +35. 

TPT Trustee Services distributed  
cash and transferred assets valued 
at $83m to more than 3,000 
beneficiaries. 

We are refocusing the wealth 
management side of the business  
on our home market of Tasmania 
where we have a long 135 year legacy 
and competitive brand advantage.

TPT Wealth’s operating income eased 
due to lower fee revenue from the 
investment management business.

Delivering for the 
community
Our approach to sustainability  
focuses on driving positive change  
in the bank and the community.

I am proud to say we started to 
measure our material Scope 3 
financed emissions, those greenhouse 
gas (GHG) emissions associated  
with residential mortgage lending.  
This data will help us set relevant 
emissions reduction targets.

We continue to encourage customers 
to adopt e-statements with an 
additional 18,540 bank customers  
now on e-statements. 

The MyState Foundation continued 
to support the Tasmanian community 
by providing grants of more than 
$175,000 across 20 community 
programs focused on providing 
greater opportunities for youth.  
The Foundation also supported 
Colony47 as the first corporate 
partner of its JumpStart program, 
assisting young people in Tasmania  
to access affordable housing.

In addition to our Foundation grants, 
our team raised a further $15,000 for 
youth-focused charities. 

The recipients included JCP Youth, 
Make a Wish, Riding for the Disabled 
Association South, Anglicare 
Tasmania’s Taz Kids clubs, Hobart 
Women’s Shelter and Tassie Mums.

This investment in our community also 
provided opportunities for our team  
to connect with local initiatives. 

10

MyState LimitedAnnual Report 2023MyState Limited

Annual Report 2023

Our partnership with the Tasmania 
JackJumpers exemplified our 
commitment to fostering a vibrant 
sports culture and inspiring future 
generations of athletes in Tasmania. 
The MyState Arena partnership 
provided us with a platform to connect 
with customers and the community 
through events, concerts and sport. 
Other sporting sponsorship included 
support for the women’s super league 
and leadership development program 
through Football Tasmania. 

MyState also continued to sponsor 
Rise Above the Rim Shoot-a-thon,  
a 12-hour basketball shooting 
challenge raising much-needed funds 
for Ronald McDonald House Charities 
in Tasmania and Victoria. 

Digital banking
Our customers continue to shift 
towards digital banking with more 
than 77% of customers registered  
for internet and mobile banking.

We continue to invest in next-
generation digital technology,  
with the development of an  
improved banking experience.

We redeveloped online application 
forms to make it easier for new and 
existing customers to engage with us.

Our digital products are becoming 
more helpful and intuitive, with timely 
reminders about upcoming bills and 
personal notifications about money 
moving into and out of accounts. 

Staff in branches are increasingly 
helping customers use digital  
services and tools.

Providing a great place  
to work
We know that people want to work  
at places where they are proud of the 
organisation’s purpose.

The launch of our new purpose in 
December 2022 sharpened our 
focus on making it easier to deal with 

customers, helping our people be their 
best and investing in our communities. 

Our purpose was created by our 
people and has energised and united 
our team.

To help our people develop and 
perform to their potential, we continue 
to invest in learning and leadership 
programs, focusing on training and 
development to support our growth 
ambitions. We also created a wellbeing 
program to enhance resilience and 
provide more opportunities to engage 
with our Foundation grant recipients. 

This focus has resulted in a sharp  
rise in successful internal promotions.

We improved our staff engagement 
score year on year to 73%, which 
places MyState well within the  
high-performance band (>65%).

Protecting customers
2023 has seen a significant increase  
in concern about cyber security  
and scams.

Australians lost more than $3 billion 
through the year to scammers. 
Everyone has become a target  
and the types of scams are  
constantly evolving.

Protecting our customers from scams 
is a top priority and we do this by 
preventing, detecting and responding 
to scam threats and working with 
industry, government and other 
sectors of the economy. It takes a 
team approach, including the active 
involvement of our customers to shut 
down the scammers.

To support scam prevention we 
educate customers on scam threats 
through the website, customer updates 
and social media. Customer education 
includes information on protecting 
passwords, double-checking new billers 
and being wary of unsolicited calls  
and clicking on links.

Two factor authentication and Pay-ID 
are effective barriers to scammers 
when passwords and codes are kept 
secure and not shared.

To detect scams we invest in cyber 
security including enhancing artificial 
intelligence capability to monitor 
unusual transactions.

To respond to scams we have 
increased surveillance of unusual 
transactions and message customers 
whenever new billers are added.

Looking ahead
Over the first two years of our growth 
strategy, we have grown our major 
portfolios of mortgages and deposits 
by 43% and 40% respectively. 

We expect competition in financial 
services to remain fierce, and while 
we anticipate growth will ease next 
year, we expect to maintain above-
system growth in our key portfolios 
of mortgages and savings while 
continuing to improve efficiency. 

We remain focused on improving 
customers’ digital and human 
experience across both MyState Bank 
and TPT Wealth and will continue to 
simplify our products, processes  
and systems. 

Thank you
On a personal note, I would like to thank 
customers and clients for choosing 
MyState and TPT and shareholders  
for their support.

This report marks my first full year as 
CEO of MyState, and I would like to 
thank everyone for the way my family 
and I have been welcomed into the 
Tasmanian community.

Brett Morgan 
Managing Director and CEO

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11

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MyState Limited

Annual Report 2023

Our strategy

Our strategic ambition to grow 
our share in deposits, lending 
and funds under management 
remains unchanged. 

Two years into our growth strategy, 
our home lending book has grown  
by 43% to $7.8 billion, with nearly two-
thirds of our home loan customers 
now originating from mainland 
Australia. Deposits are  
up 40% over the same period. 

The award-winning products and 
services offered by MyState Bank  
and TPT Wealth mean we can help 
people across all life stages. We do 
this through our core offerings of 
everyday banking products, home  
and investment loans, asset 
management and commercial 
lending, right through to estate 
planning and administering trusts.

These products and services are 
delivered through our key channels. 
For MyState Bank this encompasses 
digital, brokers to grow outside our 
heartland of Tasmania, mobile lenders 
in Tasmania, as well as our Tasmanian 
branches and contact centre. 

For TPT Wealth, our key channels 
include digital, relationship managers 
and our client services team.

And given the importance of a  
strong and positive culture – which is 
critical to the success of our strategy 
– we have three key values that we live 
by every day – create customer wow, 
chase the better and collaborate to win.

12

Our investment into distribution capability and capacity 
in particular has supported the acceleration of customer 
and deposit growth and has made our business stronger 
for the future.

Within this environment MyState 
remains well placed to continue 
to benefit from the willingness of 
Australians to switch banks, and we 
expect to continue to attract new 
customers and grow above system  
in both mortgages and deposits. 

Though the external market remains 
highly competitive, our goal is to 
continue to execute on our growth 
strategy and tell our unique story 
of making managing money easy, 
to help our customers and clients 
achieve what matters most, so 
together we can thrive.

In FY23 we delivered continued growth 
in loans, deposits and customer 
numbers, and improved our cost 
to income ratio while maintaining a 
strong balance sheet and preserving 
credit quality.

Our investment into distribution 
capability and capacity in particular 
has supported the acceleration of 
customer and deposit growth and  
has made our business stronger  
for the future.

While our strategy remains the same, 
as we enter a new financial year 
our aim is to reinforce our focus on 
returns, execution, sustainable growth 
and capital generation. This will drive 
the business forward to better support 
and enhance the experience for our 
stakeholders. FY23 was a momentous 
year that saw the re-emergence  
of inflation and the fastest rise in 
interest rates in more than 30 years. 
The economy is slowing, as is credit 
growth, while customers adjust to the 
new normal. Competition is forecast 
to remain strong.

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13

Our ambition is to grow our share in deposits, 
lending and funds under management

Together for  the better

Core offering

Core offering

Everyday banking

Lending

Asset management

Trustee services

• Transaction accounts
• Saving accounts
• Term deposits

• Home loans
• Investment loans

• Mortgage funds
• Commercial lending

• Wills & estate planning
• Estate administration
• Charitable trusts

Key channels

Key channels

• Digital
• Branches (TAS)
• Contact centre

• Brokers
• Mobile lenders (TAS)
• Digital
• Contact centre

• Relationship managers
• Digital
• Asset consultants

• Direct

Our purpose and values underpin our strategy

Create customer ‘wow’  |  Chase the better  |  Collaborate to win

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Approach to risk

Management of financial and non-financial risks continues to be a key focus  
of our business, and an integral part of the platform upon which we have built our  
growth strategy. 

Throughout FY23, we continued to focus on a strong culture of risk awareness and accountability across the organisation. 

The risk strategy for the past year was built on three pillars:

Promote risk 
management 
principles

Fit for  
purpose risk 
framework

Digitised and 
simplified 
process

Awareness and adoption 
of risk management 
principles and practices 
that support a healthy risk 
culture, making managing 
money simpler and easier 
for our customers.

A dynamic, iterative and 
responsive to change  
risk framework.

Digitisation and 
simplification of risk 
management processes  
to support business  
growth and productivity.

Our risk management frameworks  
are designed to identify, mitigate 
and/or manage risks on a timely 
basis. We undertake regular reviews 
of these frameworks so that we 
continue to meet our regulatory 
obligations and deliver the best 
possible outcomes for our customers 
and stakeholders. 

During the past year, assurance 
reviews focused on further enhancing 
our operational risk capabilities, 
including but not limited to our risk 
controls for information and cyber 
security. Controls related to fraud risks 
were also enhanced to support and 
protect our customers from scams.

We use our values to continue to build 
a culture of risk accountability among 
our employees. This encompasses 
facilitating training programs, alerting  
employees to indicators of risk, 
initiating timely closure of risk 
incidents, and providing recognition 
for employees who champion our  
risk principles.

We remained conscious of our duty 
of care to customers in need of 
additional assistance, and continued 
to offer support to these customers 
via our customer contact centre, 
branches, collection teams and 
customer advocate.

1414

MyState LimitedAnnual Report 2023The award-winning products 
and services offered by 
MyState Bank and TPT Wealth 
means we can help people 
across all life stages.

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15

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MyState Limited

Annual Report 2023

ESG update

In this section we aim to provide a  
clear picture of our Environmental, 
Social and Governance (ESG) 
performance and impact for the  
period 1 July 2022 to 30 June 2023  
in six key areas.

1. Supporting customers 

2. Governance, conduct and culture

3. Helping our people be their best

4. Digital enablement and data security

5. Environmental sustainability

6. Community investment

We understand the importance of ESG  
to create and sustain long-term value 
in a rapidly changing world and 
believe these six topics provide strong 
foundations that will create value 
for our stakeholders and protect our 
business into the future.

The launch of our new purpose in 
December 2022 has sharpened our 
focus on supporting our customers, 
helping our people be their best  
and investing in our communities  
so together we can thrive. 

To help our people be at their best,  
we have continued investment into  
our learning and leadership programs, 
focusing on developing our people 
to support our growth ambitions and 
creating a wellbeing program to 
enhance resilience. Our diversity and 
inclusion collective, Belong, has also 
been fostering a workplace culture 
where everyone feels included.

We continued to support the 
Tasmanian community through 
the MyState Foundation, investing 
$175,000 across 20 community 
programs focused on providing 
greater opportunities for youth.  
This investment in our community 

connects our team with our 
community initiatives as we pursue 
being a purpose-led organisation.

In relation to digital enablement and 
data security, our customers continue 
to shift towards digital banking 
with more than 78% of customers 
registered for internet and mobile 
banking. In response to an increase 
in concern about cyber security and 
scams, during the year we stepped 
up investment in cyber security and 
importantly in educating customers  
on how to avoid being scammed.

Continuing our commitment to 
measure and manage our greenhouse 
gas (GHG) emissions, we broadened 
our measurement to also include 
our most material Scope 3 financed 
emissions – those GHG emissions 
associated with residential mortgage 
lending – which accounts for over 95% 
of the value of our lending portfolio.

Now that we understand our combined 
operational and financed emissions, 
we will begin to explore appropriate 
emissions reduction targets and 
initiatives. More information on our 
emissions data can be found in 
our Task Force on Climate Related 
Financial Disclosure (TCFD) update 

later in this section. TCFD is a  
globally recognised standard set  
of recommendations used by more  
than 3,000 leading organisations 
that either prepare or use financial 
disclosures, with the aim of building  
a more resilient financial system 
through climate-related disclosure.

How we listen and engage
As in previous years, in 2023 we 
continued to capture the voices  
of MyState’s stakeholders through 
formal and informal feedback 
methods. Our stakeholder groups 
include customers, shareholders, 
investors, our people, communities, 
regulators, government and suppliers. 

Our key measure of customer 
advocacy, Net Promotor Score 
or ‘NPS’, finished the year at +35. 
MyState is proud of this score and  
that it reflects our ongoing 
commitment of putting our customers 
at the centre of everything we do.

We know that progress on ESG is  
an evolution, and we are proud to be 
taking steps to positively impact our 
customers and the wider stakeholder 
groups with whom we work.

16

MyState LimitedAnnual Report 2023Our approach to ESG

How MyState approaches, governs and manages Environmental, Social and Governance 
topics that impact business strategies and practices

E

Environmental

S

Social

Considers environment-related risks 
and what MyState may do to reduce or 
mitigate them. It encompasses carbon 
emissions and climate change.

Examples include MyState’s carbon 
footprint, waste management, 
any pollution MyState contributes to, 
and the sustainability efforts that 
make up MyState’s supply chain. 
It also includes the physical and 
transitional risk associated with 
MyState’s portfolio on account 
of climate change.

Addresses the relationships 
MyState maintains as well as the 
reputation MyState has with its staff, 
customers, suppliers and institutions 
in the communities where MyState 
does business.

Examples include workplace safety, 
wellbeing and culture, the MyState 
Foundation, diversity, equity and 
inclusion, customer satisfaction, 
digital enablement and data privacy.

G

Governance

Directs the internal system of 
practices, controls and procedures 
MyState adopts in order to make 
effective decisions, comply with 
the law and meet the needs of 
stakeholders.

Examples include Board and leader 
composition, pay and rewards, 
and ethical operation.

The ESG topics that matter most to MyState

Supporting
customers

Governance,
conduct & culture

Helping our people
be their best

Digital enablement
& data security

Environmental
sustainability

Community
investment

To help customers 
make good choices 
and to put things 
right if they go 
wrong.

To continue to 
conduct our 
business in an 
ethical, responsible 
and transparent 
way – driving the 
right behaviours 
that put the needs 
of stakeholders first.

To drive a culture of 
customer centricity 
and execution 
excellence, 
MyState relies on 
its people being 
at their best.

To continue the 
evolution of 
MyState’s systems 
and products to 
meet its customers’ 
increasing 
expectations, and 
to keep their money 
and data safe.

To help MyState 
transition to a 
low-carbon 
economy.

To enable us to 
make a difference 
and support our 
Tasmanian 
community.

What we are doing to integrate ESG into organisational processes

Build ESG consciousness across the organisation.

Maintain ESG reporting and market disclosures.

Manage ESG risks and opportunities through Board and management committees.

Facilitated by

MyState Limited Board
Oversees the development and approval of the ESG strategy.

Managing Director & CEO
Demonstrates and communicates 
commitment to ESG by ‘setting the 
tone from the top’.

Executive
Responsible for recommending 
ESG strategy to the Board and 
considering and identifying ESG 
opportunities and impacts.

ESG Committee
Proposes ESG strategy to Executives 
and keeps track of ESG initiatives and 
associated reporting for internal and 
external stakeholders.

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MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ESG update 

continued

1. Supporting customers
To help customers make good choices and put things right if they go wrong.

How we engage

What have we been focusing on

Update at 30 June 2023

•  Customer surveys

•  Assist customers experiencing 

financial hardship

•  Customer input to help shape  

the future of MyState

•  Participation in the Federal 

Government’s First Home Loan 
Deposit Scheme (FHLDS)

•  Assistance to vulnerable customers

•  Educating our customers in relation 
to fraud, being aware of scams and 
staying safe online

•  Continuing to enhance our support for 
customers experiencing vulnerability 
due to circumstances such as financial 
hardship, family violence, elder abuse 
and scams

•  Promptly resolving customer 

complaints and interactions with  
our customer relations specialists  
and MyState’s Customer Advocate

•  Account-keeping fee simplification 

and reduction across select MyState 
Bank products

•  Customer communications in  

plain language

•  172,224 bank customers

•  Customer NPS +35

•  78% of bank customers registered  
for internet and mobile banking

•  4,861 complaints handled in FY23

•  84% of complaints resolved in under 

five days

•  423 applications supported for 
financial hardship over the year

•  1,113 basic transaction accounts 

opened

2. Governance, conduct and culture
Our principles of governance, conduct and culture provide the foundations of conducting our business in an ethical, 
responsible and transparent way including driving the right behaviours that put the needs of stakeholders first.

How we engage

What have we been focusing on

Update at 30 June 2023

•  Membership and active participation 
with Australian Banking Association

•  Ongoing prudential reporting and 

•  Annual Board review and  

approval of MyState Corporate 
Governance Statement

engagement with regulators

•  Compliance with Banking Code  

•  TPT Wealth membership of the  

of Practice

United Nations supported Principles  
for Responsible Investment (PRI) 

•  Key vendors screened for modern 
slavery assessment over the year

•  Culture survey to measure and 

•  Diversity ratios:

enhance organisational risk culture

 – 50% of all leadership roles filled  

•  Clarity of Executive portfolios and 

by women

single points of accountability

 – 33% of Non-executive Directors  

are women

 – 25% of the executive team (direct 
reports to the CEO) are women

 – 60% of all roles filled by women

•  84% of small business suppliers  

paid within 30 days

•  MyState subscribes to the ASX 

Corporate Governance Council’s 
4th Edition Corporate Governance 
Principles and Recommendations 
and publishes an annual Corporate 
Governance Statement and  
Appendix 4G in compliance with  
ASX Listing Rules

•  Full and half-year reporting and 

investor presentations

•  Regular briefings and meetings  

with investors and analysts

•  Signatories to the Banking Code  

of Practice

•  Modern slavery statements

•  Human rights statement

•  Supplier code of conduct

•  Risk Management Strategy and 

Framework

•  ESG Committee

•  Measuring and evolving our 

organisational culture and risk

•  Diversity and inclusion program  

with Board oversight

•  Whistle-blower policy (StandUp 

program)

•  Banking Executive Accountability 
Regime (BEAR): BEAR regulates  
the accountability of Executives  
and Directors for their behaviour 
and decision-making

18

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19

3. Helping our people be their best
To drive a culture of customer centricity and execution excellence we rely on our people being at their best.

How we engage

What have we been focusing on

Update at 30 June 2023

•  Clear expectations for workplace 
behaviour (Code of Conduct)

•  Living the MyState purpose and values

•  Employee experience 73%

•  Connecting our people with our 

•  Mandatory training completion 98%

•  Clear expectations of individual 

strategic ambitions

performance

•  Development of our people leaders

•  Wellbeing program

•  Leadership development

•  Evolving our change maturity

•  Identifying and assessing human 

•  Flexible and inclusive work practices 

centric capabilities

are available to all staff

•  Enhancing the employee experience 
to provide meaningful and rewarding 
opportunities to our people

•  Measuring and understanding  

our culture

•  Reward and recognition

•  Increased focus on empowering our 
people to manage their wellbeing

•  Employees trained to support 
customers in need of extra  
care 99%

•  Change maturity score of 3.3  
(uplift on previous assessment  
of 2.2)

4. Digital enablement and data security
We continue to evolve our systems and products to meet our customers’ increasing expectations, keep their money safe 
and protect their data.

How we engage

What have we been focusing on

Update at 30 June 2023

•  Online deposit product origination

•  Internet and mobile banking 

capability

•  Digital cards and payment methods 
(e.g. Apple Pay, real-time payments)

•  Open Banking according to the 

Consumer Data Right

•  Cyber security framework

•  Information security policy

•  Privacy policy

•  Keeping customers and their data and 
accounts safe through strengthening 
our systems and educating our 
customers in relation to data security 
and being aware of scams

•  Development of our next-generation 

digital banking experience

•  Redevelopment of our online application 

forms to improve and simplify user 
experience for our customers

•  Making our digital products helpful 

(e.g. reminding customers when bills 
are due), intuitive and easy to use

•  62% of bank customers on 

e-statements

•  78% of bank customers are 

registered for internet and mobile 
banking

•  96% of bank transactions 

completed digitally

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ESG update 

continued

5. Environmental sustainability
Helping us transition to a low-carbon economy. 

How we engage

•  e-statements

What have we been focusing on

Update at 30 June 2023

•  Encouraging customers to adopt 

•  MyState’s FY23 GHG emissions 

•  Emphasis on digital communication 

e-statements

with customers

•  Our year 2 TCFD report.  
See following section

footprint was assessed to be 4,519 
tonnes of carbon dioxide equivalent 
or CO2-e (Scope 1,2 and limited 
Scope 3 emissions)

•  Scope 3 financed emissions  

51,315 tonnes of carbon dioxide 
equivalent or CO2-e

•  99% of the energy used in our 
Tasmanian HQ was renewable

6. Community investment
Enabling us to make a difference and support our communities.

How we engage

What have we been focusing on

Update at 30 June 2023

•  Through the MyState Foundation,  
we help young Tasmanians reach 
their full potential

•  Through our sponsorship of MyState 

Bank Arena we are bringing 
quality sports and entertainment 
experiences to Tasmania

•  Distributing our grants and refining 
the grants process to make sure the 
support is going where it will have  
the most impact

•  Working with the team at MyState 
Bank Arena to make the venue the 
heart of sport and entertainment  
for all Tasmanians

•  $175,000 in community grants 
provided through the MyState 
Foundation in 2022/23 and over 
$2.6m since inception

•  20 community programs supported 
through the MyState Foundation

•  Colony47 partnership

Task Force on Climate-related Financial Disclosures 
(TCFD) report

Introduction
MyState Limited (‘MyState’) 
acknowledges that climate change  
is a global issue which has significant 
implications for the environment, 
society and the economy.

MyState supports the 
recommendations of the Task 
Force on Climate-related Financial 
Disclosures (TCFD) and we use 
this framework to work towards a 
climate-resilient business. MyState’s 
FY23 achievements include two 
key activities. Firstly, undertaking 
a detailed physical and transition 
climate scenario analysis across 
our national home loan portfolio. 
Secondly, updating our emissions 
footprint by including our financed 
emissions from this portfolio.

Governance 
MyState’s Board is responsible for 
overseeing MyState’s Environmental, 
Social and Governance (ESG) risks 
and opportunities, including climate 
change. The Board is supported 
by the ESG Committee to ensure 
that MyState has appropriate risk 
management strategies and internal 
controls in place. MyState’s ESG 
framework is reviewed and approved 
by the Board annually.

In FY23, MyState announced a new 
purpose with the rally cry, ‘Together 
for the better’, which extends to how 
we consider decisions in relation to 
sustainability and climate resilience. 
Across our business, we continued 
to assess our environmental impact, 
in particular measuring the carbon 
footprint of our operational Scope 1, 
2 and 3 emissions for FY22 and FY23. 

Additionally, we measured our Scope 
3 financed emissions for the first time,  
focusing on the most significant parts  
of our lending portfolio. In FY24 and  
beyond we will begin exploring 
available operational emissions 
reduction initiatives and the potential 
contribution these could make to 
lowering our carbon footprint.

MyState supports the 
recommendations 
of the Task Force on 
Climate-related Financial 
Disclosures (TCFD) and 
we use this framework to 
work towards a climate-
resilient business. 

20

MyState LimitedAnnual Report 2023Strategy 
A changing climate poses both 
transition and physical risks and 
opportunities. MyState assessed the 
exposure of the portfolio, customers, 
suppliers and employees to physical 
hazards and transition drivers, now 
and in the future. In FY23, MyState 
identified and prioritised our risks and 
opportunities in the short (0 to 5 years), 
medium (10 to 15 years) and long 
term (20+ years). The risks included 
physical climate extremes impacting 
the lending portfolio, disruption of 
carbon-intensive value chains, and 
more ambitious climate policies. 

Our climate-related opportunities 
were focused on transitioning to a  
low carbon economy and enhancing 
our business processes to better 
capture customer climate data. 

We engaged climate experts to 
undertake the climate scenario 
analysis (Table 1) using two widely 
adopted reference climate scenarios 
for physical and transition climate 
assessments. We assessed the 
Shared Socio-economic Pathways 
(SSPs)/Representative Concentration 
Pathways (RCPs) and the Australian 

Energy Market Operator (AEMO)  
for the transition assessment as the  
energy system transition is a key 
aspect that we can support our 
customers with. The physical and 
transition scenario analysis has 
provided insights into how our risks 
and opportunities evolve in the  
coming decades.

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21

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ESG update 

continued

Table 1: Climate scenario analysis approach

Risk/  
opportunity

Climate  
scenarios

Transition

Physical

Support customers to transition to the low-carbon 
economy and build climate resilience through 
innovative services and product offerings.

The impact on our lending portfolio from extreme 
weather events including extreme rain, cyclones, 
storms and bushfires.

1. Low emissions (AEMO ‘Step Change’)

1. Low emissions (SSP1-2.6 / RCP2.6)

2. Moderate emissions (AEMO ‘Slow Change’)

2. Moderate emissions (SSP2-4.5 / RCP4.5)

3. High emissions (SSP5-8.5 / RCP8.5)

Time horizons

All scenarios assessed were for 2030 and 2050 future time horizons compared to the recent past climate 
(approximately over the past two decades).

Climate metrics 
chosen as proxies 
for hazards and 
drivers

•  Energy efficiency and electrification

•  Extreme rain intensity (1-in-20yr rainfall)

•  Evolving customer expectations of financial 
service providers and green banking trends

•  Extreme rain frequency of events

•  Very high fire weather days per year

•  Extreme heat days above 35°C per year

•  Cyclone intensity and frequency

•  Storm surge events and sea level rise

Where we  
assessed

Transition metrics and themes were assessed  
on state to national levels using climate model 
outputs and supporting literature.

Physical metrics and themes were assessed on a 
postcode scale using 5km climate model projections 
where possible and supporting literature.

Risk management 
MyState identifies and manages 
risks and associated impacts within 
its Risk Management Framework. 
The Risk Management Framework 
aims at identifying, measuring, 
evaluating, monitoring, reporting and 
controlling or mitigating all internal 
and external sources of risk. Physical 
risks impacting our assets and lending 
could be managed by, for example, 
reminders that mortgage holders have 
appropriate insurance and reviewing 
our guidance for loans in high risk-
hazard regions.

Physical scenario analysis

Transition scenario analysis

Not dissimilar to other lenders, climate 
projections indicate that by 2030 our 
portfolio faces heightened exposure 
to extreme rain events in Tasmania, 
south-east Australia, and Queensland. 
Moreover, our portfolio in Western 
Australia and northern Queensland 
is most exposed to tropical cyclones, 
which may shift further south in a 
warmer climate. Rising sea levels pose 
significant risks to mortgage securities, 
with more frequent storm surges 
projected for northern and central 
Queensland, south-east Australia and 
Tasmania. Inland areas of Queensland, 
Victoria and New South Wales face a 
substantial increase in extreme heat 
exposure and heightened bushfire 
risks, particularly affecting our lending 
in central and northern Queensland. 
These severe weather events can 
lead to property damage, reducing 
collateral value or even complete asset 
loss. Additionally, changes in insurance 
availability/affordability in the future 
may impact customer repayments 
and increase hardship claims.

The global shift towards a low-
carbon world necessitates a transition 
to clean energy sources such as 
renewables. The transition climate 
scenario analysis focused on the 
potential for customer lending to 
support the significant growth in 
the installation of rooftop solar 
photovoltaic (PV) through to 2050.  
In the near term, energy efficiency  
and electrification present an 
opportunity to support customers to 
reduce their exposure to volatile energy 
markets. Medium-term (2030s-2040s) 
indicators suggest there will be strong 
growth in residential battery storage, 
with the potential for increased lending 
opportunities by 2050. The scenario 
analysis also highlighted the increasing 
adoption of electric appliances and  
improved energy efficiency in 
Australian households.

22

MyState LimitedAnnual Report 2023MyState Limited

Annual Report 2023

Metrics and targets
MyState’s base year (FY21) operational 
emissions (Scope 1, 2 and limited 
Scope 3 emissions) was assessed  
to be 4,690 tonnes of carbon dioxide 
equivalent (tCO2-e). This year MyState 
completed the inaugural calculation 
of its Scope 3 financed emissions for 
FY22 and FY23 covering the most 
material financed emissions – those 
associated with residential mortgage 
lending – which accounts for over 95% 
of the value of our lending portfolio.  
A summary of MyState’s operational 
and financed greenhouse gas 
emissions for FY22 and FY23 (and 
base year, FY21) are presented in  
Table 2. Pleasingly, MyState’s emissions 
intensity fell in FY23 to 0.57 tCO2-e/$m. 
This figure represents the amount of 
carbon dioxide equivalent generated 
in running MyState’s operations 
(our Scope 1, 2 and limited Scope 3 
emissions) divided by the size of our 
home lending book.

The climate scenario analysis findings 
have indicated parts of our business 
and lending regions where we can 
consider associated metrics and 
targets in FY24 and beyond. We are 
looking to develop targets related to 
physical and transitional issues, and 
reducing Scope 1, 2 and 3 emissions.

Table 2: MyState operational and financed greenhouse gas emissions 
(tCO2-e) and the percent change in FY23 from FY22

Greenhouse gas emissions 
(tCO2-e)

Scope 1 – direct emissions

Scope 2 – electricity-related 
emissions

FY211 

FY22

FY23

Change  
from 
FY22

54

271

40

207

41

+3.3%

137

-33.8%

Scope 3 – indirect emissions2

4,365

4,622

4,341

-6.1%

Scope 3 – financed emissions3 Not estimated

44,295

51,315

+15.8%

Total emissions

4,690 

49,164

55,834

+13.6%

Emissions intensity (excluding 
financed emissions) (tCO2-e/$m)

0.86 

0.71 

0.57 

-20%

1.  FY21 has been used as the base year for emissions calculations due to data availability and it being 

a year which truly and fairly represents MyState’s activity data. 

2.  Included within the total Scope 3 emissions boundary was purchased goods and services, capital 

goods, fuel, and energy-related activities (not included in Scope 1 and 2), upstream transportation 
and distribution, waste generated in operations, business travel, employee computing, upstream 
leased assets, and working from home.

3.  Scope 3 financed emissions are those linked to MyState’s investment portfolio and lending activities. 

The lending portfolio grew 13.5% in FY23.

Looking forward
We are a Tasmanian born and based 
company and we are proud of the 
economic credentials of our home 
state, which is one of the first places 
in the world to be carbon negative 

and has the most ambitious legislated 
emissions reduction target in Australia. 
It is an example that is inspiring us to 
do more to create and sustain long-
term value in a rapidly changing world.

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MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Board of Directors

Vaughn Richtor 

Independent Non-Executive 
Chairman

• Group Audit Committee

• Group Risk Committee

BA (Hons) MAICD

• Group People Remuneration and Nominations Committee

Vaughn joined the Board as a Non-Executive Director in 
September 2019 and was appointed Chairman on 1 April 2022. 
He has held CEO roles in Asia and is the former CEO of ING 
DIRECT Australia and CEO Challenger and Growth Countries  
– Asia, ING Group after joining ING in London in 1991 as  
Deputy General Manager UK and Ireland.

Vaughn is a Non-Executive Director of Rest Super and also a 
current adviser to Rhizome, Spriggy, Wyvern Health and the 
Strategy Implementation Institute in Singapore. He is a prior 
Board member of TMB Bank in Thailand, ING Vysya Bank in India, 
Kookmin Group in Korea, and a Non-Executive Director, and 
later Chairman, of Ratesetter Australia. In addition, he writes  
and speaks extensively on leadership, corporate culture, 
customer centricity and digital banking.

Robert Gordon

Independent Non-Executive 
Deputy Chairman

• Group Risk Committee (Chair)

BSc, MIFA, MAICD, FAMI

• Group People Remuneration and Nominations Committee

Bob has been a Non-Executive Director since February 2009 
and prior, a Director of MyState Bank Limited, (previously 
connectfinancial), from July 1998. He is President of Football 
Federation Tasmania and Chair of the Supported Affordable 
Accommodation Trust.

He is the former Managing Director of Forestry Tasmania, 
President and a Director of the Institute of Foresters of 
Australia and has previously served on the Board of a number 
of companies in the tourism, research and development, 
construction and infrastructure industries.

Sibylle Krieger

Independent Non-Executive 
Director

•  Group People Remuneration and Nominations 

Committee (Chair)

LLB (Hons), LLM, FAICD, MBA

•  Group Risk Committee

Sibylle has been a Non-Executive Director since December 2016 
and has over 40 years of broad commercial experience as a 
lawyer, economic regulator, company director and independent 
consultant. She was a partner in two large commercial law firms 
for 22 years and has over 17 years’ experience as a Non-Executive 
Director and Chair across listed and unlisted companies in 
multiple sectors. Her current portfolio includes financial services, 
fintech, essential infrastructure services and energy.

model. She has previously served as Chair of Xenith IP Group 
Limited (ASX:XIP) and as a Director of Sydney Ports Corporation, 
Allconnex Water (South-East Queensland), TasWater, Vector 
Limited (NZX:VCT), the Australian Energy Market Operator Ltd 
(AEMO), and as a trustee of the Royal Botanic Gardens and 
Domain Trust and of Sydney Grammar School. In addition, for  
six years Sibylle served as a Tribunal member of the principal 
NSW economic regulatory tribunal.

Sibylle is currently a Non-Executive director of Ventia Services 
Group Limited (ASX:VNT), AEMO Services Limited and Openpay 
Group Limited (ASX:OPY). She is also a member of the advisory 
board of Law Squared, a challenger to the traditional law firm 

She holds undergraduate and post-graduate degrees in law  
and an MBA from Melbourne Business School. She is a Fellow  
of the Australian Institute of Company Directors.

24

MyState LimitedAnnual Report 2023Warren Lee

Independent Non-Executive 
Director

BCom, CA

•  Group Audit Committee

•  Group Risk Committee

Warren was appointed as a Non-Executive Director in October 
2017 and appointed Chairman of TPT Wealth in August 2023.  
He has extensive experience in the international financial services 
industry, including 15 years at AXA in senior management 
positions within the company’s Australian and Asian businesses.

Warren was previously the Chief Executive Officer of the Victorian 
Funds Management Corporation and Chief Executive Officer, 
Australia and New Zealand for AXA Asia Pacific Holdings Limited. 
He has previously served as a Director of Avenue Bank Limited 
and Tower Limited.

Warren is currently a Non-Executive Director of MetLife Limited, 
Warakirri Asset Management Limited and Flinders Investment.

Stephen Davy

Independent Non-Executive 
Director

•  Group Risk Committee

•  Group Audit Committee

BSc (Hons)

• Group People Remuneration and Nominations Committee

Stephen was appointed as a Non-Executive Director in July 2021. 
He was formerly Chief Executive Officer and Director of Hydro 
Tasmania, a position he held from 2013 to 2020. Prior to that role 
he held senior executive roles at Hydro Tasmania, Eraring Energy, 

Societe General and Bankers Trust and started his banking 
career at Macquarie Bank. Stephen is also a Director at  
Sonic Civil Investments and at Volunteering Tasmania.

Andrea Waters

Independent Non-Executive 
Director

•  Group Audit Committee (Chair)

BCom, FCA, GAICD

•  Group Risk Committee

Andrea was appointed as a Non-Executive Director in October 
2017. She is an experienced Non-Executive Director, auditor and 
accountant with over 35 years’ experience in financial services. 
She is a Fellow of Chartered Accountants Australia & New Zealand, 
and both a member and accredited facilitator of the Australian 
Institute of Company Directors. She is a former partner with 
KPMG, specialising in financial services audit.

Andrea is the Chairman of the Colonial Foundation and a 
Director of Bennelong Funds Management Group, Citywide 
Service Solutions Pty Ltd, Helia Group Limited (ASX:HLI)  
and Grant Thornton Australia Ltd. Prior, she was a Director  
of The Lord Mayor’s Charitable Foundation, Chartered 
Accountants.

Brett Morgan 

Managing Director and  
Chief Executive Officer

BEc, MAppFin

Brett commenced with the MyState Group on 17 January 2022.  
He was previously Chief Executive Officer, Banking and Wholesale 
at ASX listed BNK Banking Corporation Limited (ASX:BBC) and 

has extensive digital banking experience having held a number  
of key executive roles over 15 years at ING DIRECT.

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25

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Key Management Personnel

Brett Morgan 

Managing Director and CEO

Appointed January 2022

BEc, MAppFin

Brett commenced with the MyState Group on 17 January 
2022. He was previously Chief Executive Officer, Banking 
and Wholesale at ASX listed BNK Banking Corporation 
Limited (ASX:BBC) and has extensive digital banking 
experience having held a number of key executive roles 
over 15 years at ING DIRECT.

Paul Moss

Chief Operations Officer

Appointed May 2015

BEng (Hons)

As Chief Operating Officer, Paul is responsible for the 
strategic direction and delivery of MyState Limited Group’s 
Technology, Data, Cyber and Banking Operations.

Paul was previously a Director of IT Advisory at KPMG, 
following 11 years at Betfair in the UK and Australia as 
Director of Information Systems and Operations, focusing 
on strategy development, global infrastructure deployments 
and customer experience. Prior, Paul occupied technical 
leadership positions in UK-based investment banks.

Gary Dickson 

Chief Financial Officer

Appointed October 2019

BCom, MBA (Executive), FCA

As Chief Financial Officer, Gary is responsible for managing 
the finance, treasury, regulatory reporting, strategy and 
property functions for MyState. Gary is also a Director  
of Connect Asset Management Pty Ltd.

Gary has over 30 years of experience in a variety of 
financial roles, with 15 years of CFO experience. His most 
recent position was at ME Bank as CFO, where he drove 
strong growth in key financial metrics during his six-year 
tenure. Prior to this, Gary held the position of CFO for 
AXA Australia for five years. His prior financial services 
roles include senior positions with the Colonial First State 
Group, the Investments & Insurance Services division at 
Commonwealth Bank and Portfolio Partners Limited.

Mandakini Khanna 

Chief Risk Officer

Appointed December 2015

BCom, GAICD, FGIA

Mandy is responsible for both financial and non-financial 
risks at MyState. She chairs the group Enterprise Risk 
Committee and the ESG Committee.

Mandy has over 25 years’ experience in banking and 
financial services across sales, product management, 
operations and risk management. Prior to joining MyState  
in December 2015 Mandy was the Chief Credit Officer 
for GE Capital, before which she held various senior risk 
positions in GE Capital across Asia Pacific.

26

MyState LimitedAnnual Report 2023Tim Newman 

General Manager, Lending

Appointed June 2023

As General Manager, Lending, Tim is responsible for all 
elements of MyState’s retail lending business – including 
product development, distribution, operations and  
service delivery.

Tim joined MyState in 2022 as Head of Business 
Transformation. Prior to this Tim spent 15 years at ING 
Australia in a variety of senior leadership positions across 
the retail bank – including Head of Product, Head of 
Strategy, Head of Customer Experience and Service,  
and Executive Director for Operations.

Janelle Whittle

General Manager, People 
Community and Public Relations

Appointed January 2018

BCom, MHRM

Janelle has overall responsibility for MyState Limited 
Group’s human resources function, community portfolio 
including the MyState Bank Community Foundation,  
and Public Relations.

People and culture has a key role in developing and 
fostering an organisational culture to support MyState’s 
growth aspirations. Janelle has over 20 years’ experience 
in human resource management across a number of 
industries including aquaculture, utilities and higher 
education. Her previous senior leadership positions in 
human resources include General Manager People and 
Culture at Aurora Energy, and Director Organisational 
Design and Change at the University of Tasmania.

Claudio Mazzarella

General Manager, Everyday 
Banking & Marketing

Appointed May 2023

GradDip Management

As General Manager, Everyday Banking & Marketing, 
Claudio has strategic, commercial and operational 
responsibility for MyState’s Everyday Banking & Marketing 
business that includes product (deposits), digital, 
marketing, payments, retail branches and contact centre 
that is designed to drive customer and deposit growth.

Claudio has over 18 years’ experience across financial 
services and digital banking in senior business and 
functional leadership roles spanning product, payments, 
digital, marketing, channel management, operational 
support and transformation. He was previously General 
Manager, Group Payments at BOQ, before which he was 
General Manager for Products and Payments at ME Bank.  
He has also held key functional roles at NAB and Coles  
Myer Ltd (now Coles Group).

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27

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ report

Your Directors present their report for MyState Limited and its controlled entities (the Group) for the year ended 30 June 2023.

Directors
•  Vaughn Richtor BA (Hons), MAICD  

Chairman and Independent Non-Executive Director.

•  Robert Gordon BSc, MIFA, MAICD, FAMI  

Deputy Chairman and Independent Non-Executive Director.

•  Brett Morgan BEc, MAppFin  

Managing Director and Chief Executive Officer – Executive Director.

•  Stephen Davy BSc (Hons)  

Independent Non-Executive Director. 

•  Sibylle Krieger LLB (Hons), LLM, FAICD, MBA  

Independent Non-Executive Director.

•  Warren Lee BCom, CA  

Independent Non-Executive Director.

•  Andrea Waters BCom, FCA, GAICD  
Independent Non-Executive Director.

Company secretary
•  Scott Lukianenko Ad Dip BMgmt, Grad Dip BA, GIA (Cert).

Principal activities 
MyState Limited (MyState) provides banking, trustee and managed fund products and services through its wholly-owned 
subsidiaries MyState Bank Limited (MyState Bank) and TPT Wealth Limited (TPT Wealth).

MyState Bank delivers home lending, savings and transactional banking solutions through digital and branch channels, 
an Australian-based contact centre, mobile lenders and mortgage brokers.

TPT Wealth delivers asset management and trustee services through relationship managers, digital channels and an Australian-
based estate planning, trust administration and support team.

There have been no significant changes in the nature of the principal activities of the Group during the year.

Dividends 
Dividends paid in the full year ended 30 June 2023 were as follows:

•  For the year ended 30 June 2022, a fully franked dividend of 11.50 cents per share, amounting to $12.18m was paid 

on 7 September 2022.

•  For the half-year ended 31 December 2023, a fully franked dividend of 11.50 cents per share, amounting to $12.54m 

was paid on 21 March 2023.

The Directors have declared a fully franked final dividend of 11.5 cents per share. The dividend will be payable on 
19 September 2023 to shareholders on the register at the record date of 24 August 2023, taking the dividend for the 
full year to 23.0 cents per share.

Operating and financial review

Financial performance
The Group delivered a record net profit after income tax for the year ended 30 June 2023 of $38.5m, an increase of 20.2% 
on the prior corresponding period (pcp) to 30 June 2022 of $32.0m.

Earnings per share (EPS) was 35.5 cents per share (FY22: 30.3 cents per share), return on equity (ROE) was 8.7% (FY22: 7.7%) 
and the cost to income ratio (CTI) was 64.0% (FY22: 68.4%). These key metrics speak to the business momentum generated 
this financial year through the execution of the Group’s growth strategy and the resulting operating leverage, led by strong 
income growth and disciplined cost management. 

28

MyState LimitedAnnual Report 2023Group net profit after tax ($m)

36.3

32.0

38.5

FY21

FY22

FY23

The total loan book (excluding capitalised acquisition costs) grew $937m or 13.5% on June 2022. The home loan book grew 
$962m (14.1% or 2.9 times system growth) during the period. MyState maintains a disciplined approach to credit risk and a 
sustained focus on asset quality.

Pre-provision operating profit of $57.7m increased 30.3% on pcp, largely driven by an increase in operating income of $20.2m 
or 14.4%, partly offset by expense growth of 7.1%. MyState’s strategy is to accelerate growth and create scale by growing market 
share in deposits, lending and funds under management (FUM), as evidenced by loan book and customer deposit growth, 
and a 33% uplift in new customers joining MyState in the past 12 months.

In 2023, MyState’s award-winning Bonus Saver account featured in the Finder Banking Awards 2023, celebrating Australia’s 
best transaction, savings and term deposit accounts. Using 12 months’ worth of data, Finder’s experts have analysed the rates, 
fees and offer details for hundreds of everyday deposits accounts and recommended the Bonus Saver account in the ‘Best 
Savings account’ category.

Despite a period of significant change and the challenges presented by the rising cost of living in recent times, MyState’s internally 
measured customer net promoter score was +35 at 30 June 2023, and reflects a high level of ongoing customer advocacy.

MyState Bank
Exceptional lending growth and credit quality was maintained in FY23. MyState Bank’s loan portfolio grew 13.5% from 
30 June 2022, reaching $7,876m at 30 June 2023.

Total loan book composition ($m)

6,939

6,838

7,876

7,799

5,592

5,447

Jun 21

Jun 22

Jun 23

Housing Loans

Other Loans (personal/business/overdrafts)

Impairment expense was $3.3m higher than pcp, reflecting an increase in total collective provisions, consistent with an increase 
in arrears in a rising interest rate environment.

MyState’s 30 and 90-day arrears remain below industry benchmarks at 0.81% and 0.34% respectively (30 June 2022: 0.41% 
and 0.20%).

Arrears are higher than 12 months ago reflecting increases of 400bps in the official cash rate since May 2022 and the rising 
cost of living due to elevated levels of inflation. 

Central banks globally still have a fine balancing act ahead, to manage inflation down without stalling economic activity 
and pushing economies into recession.

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29

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ report

continued

The Bank remains focused on low-risk, owner-occupied lending with a loan to valuation ratio (LVR) of less than 80%.

Exposure to investor and interest-only lending remains relatively low compared to sector averages.

The increase in loans with an LVR greater than 90% since June 2021 reflects the success of the Bank’s participation in the Federal 
Government’s First Home Loan Deposit Scheme (FHLDS), which is all owner-occupied lending. The FHLDS is an Australian 
Government initiative to support eligible customers purchase their first home sooner with as little as a 5% deposit.

The National Housing Finance and Investment Corporation (NHFIC) provides a guarantee of up to a maximum amount of 15% 
of the value of a property (as assessed by MyState) purchased under the scheme.

All non-FHLDS loans with an LVR >80% are mortgage insured.

Home loan book – LVR profile ($m)

5,447

507
23% 411
339

77%

4,190

6,838

752
467
298

5,321

7,799

940
619
395

>90%

85%-90%
80%-85%

25%

5,845

<80%

75%

Jun 21

Jun 22

Jun 23

<80% LVR

80%-85% LVR

85%-90% LVR

>90% LVR

Net interest margin (NIM) trend
Net interest income was up $22.3m or 20.3% on pcp as a result of a larger average balance sheet, partly offset by a fall in 
NIM. The fall in average NIM of 4bps to 1.63% during the year reflects intense competition in the market for new home loans, 
higher funding costs and above-system loan book growth.

1.96%

1.67%

1.71%

1.55%

1.63%

FY21

FY22

1H23

2H23

FY23

Customer deposits ($m)

4,462

2,965

1,497

Jun 21

5,552

3,401

2,151

Jun 22

Customer deposits at call

Customer deposits at term

6,236

3,374

2,862

Jun 23

30

MyState LimitedAnnual Report 2023Customer deposits increased by 12.3% in the period driven by growth in term deposits with customers acquired evenly across 
the branch network, digital, online and third party channels.

The Bank’s online originated deposit portfolio grew an additional $229m to $1,130m (25.5%) from 30 June 2022.

MyState welcomed a further 25,690 new to bank customers this financial year. 

Securitisation funding increased during the period and remains an important source of funding in conjunction with an increase 
in customer deposits. 

Non-interest income from banking activities decreased by $1.6m or 10.7% on pcp, as a result of lower transaction and loan fees.

TPT Wealth

Funds under management ($m)
TPT Wealth provided $14.3m in fee revenue and income diversification for the Group. 

1,105

1,062

994

Jun 21

Jun 22

Jun 23

Income from wealth management activities decreased by $0.5m or 3.5% on pcp, with TPT Trustee Services income slightly 
lower over the year and Investment Services income lower due to a fall in average funds under management (FUM).

FUM decreased $68m from 30 June 2022 with the Income Funds declining by $80m, partly offset by increases in the At Call 
Fund of $7m and the Growth Funds by $5m.

Capital position
The Group’s total capital ratio increased to 15.43% at 30 June 2023 and the Group’s Common Equity Tier 1 ratio increased 
to 11.22%.

Further capital flexibility was provided during the period by the inaugural issue of Additional Tier 1 capital and further securitisation.

During the year MyState issued a $400m Term RMBS and established a new committed warehouse funding agreement. 

Both transactions support MyState’s growth strategy and provide flexibility to MyState’s capital management strategy.

On 1 January 2023, the Group transitioned to the Australian Prudential Regulation Authority’s (APRA) new bank capital 
framework and has met the new requirements at all times.

Capital
12.41%

1.88%

10.53%

0.87%

1.43%

0.34%

0.48%

0.99%

1.12%

0.47%

0.36%

2.30%

15.43%

1.89%

2.32%

11.22%

Jun 22

Other capital
initiatives

AT1
issuance

Profit

Dividends
paid

Capitalised
intangibles

Securitised
assets

Secured
mortgage
lending

Basel 3
benefits

Other asset
growth

Jun 23

CET1 capital

AT1 capital

Tier 2 capital

Increase

Decrease

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31

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ report

continued

Community
MyState seeks to make a genuine difference to customers and the communities within which they operate.

Since 2001, the MyState Foundation has awarded more than $2.6m in grants to help not-for-profit organisations in Tasmania 
with a focus on helping young Tasmanians reach their full potential. In FY23, the MyState Foundation continued to support the 
Tasmanian community by providing grants of more than $175,000 to 20 recipients focused on providing greater opportunities 
for youth.

Outlook
The Board-endorsed plan to accelerate growth in lending has gained momentum. In the medium term, the business is seeing 
the realisation of the benefits from its investment in digital capabilities, distribution and marketing to grow the customer base, 
while maintaining a strong risk culture to manage the risks associated with an uncertain economic environment.

Lead auditor’s independence declaration under section 307C  
of the Corporations Act 2001
The lead auditor’s independence declaration is set out on page 34 and forms part of the Directors’ Report for the year ended 
30 June 2023.

Rounding of amounts
In accordance with applicable financial reporting regulations and current industry practices, amounts in this report have 
been rounded-off to the nearest one thousand dollars, unless otherwise stated. Any discrepancies between totals and sums 
of components in charts contained in this report are due to rounding.

Events subsequent to balance date
In the opinion of the Directors, there has not arisen in the period between the year ended 30 June 2023 and the date of this 
report, any material item, transaction or event that is likely to significantly affect the operations of the Group.

Environmental regulation
The Group is not subject to any significant environmental regulation. A Task Force on Climate-related Financial Disclosures 
(TCFD) report outlining MyState’s baseline Scope 1, 2 and 3 greenhouse gas (GHG) emissions associated with the activities 
and facilities that support the businesses’ everyday operations has been included in this Annual Report.

Directors’ meetings
The number of meetings of Directors (including meetings of the Committees of Directors) held during the year and the number 
of meetings attended by each Director are as indicated in the following table:

MYS Directors

S Davy 

R Gordon

S Krieger

W Lee

B Morgan 

V Richtor

A Waters

MYS Board 
Meetings

Group Audit 
Committee

Group Risk 
Committee

A

15

15

15

14

15

14

15

B

15

15

15

15

15

15

15

A

7

n/a

n/a

7

n/a

6

7

B

7

n/a

n/a

7

n/a

7

7

A

5

5

5

5

B

5

5

5

5

n/a

n/a

5

5

5

5

Group People, 
Remuneration 
and Nominations 
Committee*

Group Digital 
and Marketing 
Committee

A

4

4

4

n/a

n/a

4

n/a

B

4

4

4

n/a

n/a

4

n/a

A

n/a

4

n/a

3

n/a

4

4

B

n/a

4

n/a

4

n/a

4

4

A = Number of meetings attended. B = Number of meetings eligible to attend.

*  The Group People and Remuneration Committee merged with the Group Nominations and Corporate Governance Committee on 1 June 2022 to 

become the Group People, Remuneration and Nominations Committee.

32

MyState LimitedAnnual Report 2023Indemnification and insurance of Directors and Officers
The Company has paid, or agreed to pay, a premium in relation to a contract insuring the Directors and Officers listed in this 
report against those liabilities for which insurance is permitted under Section 199B of the Corporations Act 2001.

The Company has not otherwise, during or since the relevant period, indemnified or agreed to indemnify an Officer or auditor 
of the Company or of any related body corporate against a liability incurred as such an Officer or auditor.

Non-audit services
During the year, Wise Lord & Ferguson, the Company’s auditor, has performed certain other services in addition to their 
statutory duties. Further details are set out in note 8.2 to the financial statements.

The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written 
advice provided by the Group Audit Committee, is satisfied that the provision of those non-audit services during the year by 
the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001, 
for the following reasons:

•  all non-audit services were subject to the corporate governance procedures adopted by the Company and have been 

reviewed by the Group Audit Committee to ensure that they do not impact the integrity and objectivity of the auditor; and

•  the non-audit services provided do not undermine the general principles relating to auditor independence as they related 

to technical disclosure issues.

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33

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Auditor’s independence declaration to the Directors

AAuuddiittoorr’’ss  IInnddeeppeennddeennccee  DDeeccllaarraattiioonn  ttoo  tthhee  DDiirreeccttoorrss  ooff  MMyySSttaattee  LLiimmiitteedd  

In relation to our audit of the financial report of MyState Limited for the financial year ended 

30 June 2023, to the best of my knowledge and belief, there have been no contraventions of 

the auditor independence requirements of the Corporations Act 2001 or any applicable code 

of professional conduct. 

WWIISSEE  LLOORRDD  &&  FFEERRGGUUSSOONN  

NNIICCKK  CCAARRTTEERR  

Partner 

Wise Lord & Ferguson 

Date: 18 August 2023 

34

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

Letter from the Chair of the Group People, Remuneration and Nominations Committee 

Dear Shareholder, 

The 2023 financial year (FY23) marked a significant year of change for MyState Limited, the first full year with our new Managing 
Director and Chief Executive Officer Brett Morgan, a refresh of the executive team, and the second year of our growth strategy. 

On behalf of the Board, I present to you the Company’s Remuneration report (Report) for FY23. 

In broad terms, the purpose of MyState’s Executive remuneration framework has always been to facilitate long-term sustainable 
value creation for MyState’s shareholders. This includes ensuring levels of remuneration are market competitive to attract, 
motivate and retain suitably qualified individuals focused on MyState’s strategic priorities. The performance conditions and 
measurement timeframes are consistent with the objective of long-term sustainable growth, and our performance targets are 
designed to be challenging. The payment vehicles and ownership requirements are designed to align executive and shareholder 
interests, with the deferral and vesting periods designed for appropriate long-range risk management, and to be consistent 
with the regulatory frameworks in which MyState conducts business. 

The Report describes the Group’s Director and Executive remuneration frameworks and how they contribute to the execution 
of our business strategy and support our values and desired culture. Our financial performance for FY23 was very strong in our 
banking business, while in comparison weaker performance in the wealth business resulted in gateway requirements for the 
payment of short-term incentives not being met. The Board has, however, exercised the discretion which it always holds and 
awarded cash bonuses to select Executives for their significant contribution to our record Group performance.

FY23 Executive remuneration framework 
It may be helpful to recap the design principles that underlie the MyState executive remuneration framework, further details 
of which are set out in the Report: 

Executive remuneration arrangements should be fit-for-purpose for MyState’s overall business strategy and appropriate for the 
size and complexity of the business. Remuneration should be competitive in the market to ensure that MyState is able to attract, 
motivate and retain talented executive leaders. Remuneration, particularly MyState’s incentive arrangements, should be 
aligned to the interests of MyState’s shareholders. Executive remuneration should drive appropriate behaviours and support 
the desired culture. Remuneration frameworks should be simple, transparent and readily linked to MyState’s strategic objectives. 

Short-term incentive: STI performance is measured over a single financial year. STI payments are subject to financial and  
non-financial gateways and are also subject to overriding Board discretion. The performance measures for STI vary from 
Executive to Executive to take into account their spheres of control and influence, but also to encourage teamwork and 
collaboration. STI performance measures are a mixture of financial and non-financial measures including risk management. 
The Group People, Remuneration and Nominations Committee meets jointly with the Group Risk Committee each year to 
see that risk management is properly reflected in variable remuneration outcomes.

Long-term incentive: MyState has a long-term incentive (LTI) arrangement that has been designed to align Executives with 
long-term value creation for shareholders. The LTI design aims to provide Executives with a simple, transparent and meaningful 
incentive. LTI performance is measured over three years with an additional holding lock of a further two years. LTI awards 
are subject to return on equity and relative total shareholder returns performance hurdles, and are also subject to overriding 
Board discretion. 

Minimum shareholding requirements: Consistent with ASX practice, MyState has minimum shareholding requirements for its 
Non-Executive Directors and Managing Director, such that each individual is required to build and maintain a minimum level 
of shareholding in MyState to align their interests with shareholders. The minimum shareholding requirement is determined 
by reference to base fees or fixed reward. 

External advice: From time to time we seek independent advice in respect of the structure and levels of our Executive 
remuneration and Non-Executive Director fees to ensure that they remain competitive compared with the markets from which 
we recruit. In the course of FY23 we sought advice from Mercer, which will be taken into account in setting Executive and  
Non-Executive remuneration for FY24.

We hope that you find this brief overview helpful in understanding the context in which we think about Executive and  
Non-Executive remuneration and in which the Report was prepared. We welcome your feedback. Please email any 
comments to secretariat@mystatelimited.com.au. 

Sibylle Krieger  
Chair – Group People, Remuneration and Nominations Committee

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MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

continued

Our people and our Company
Key Management Personnel and Directors who served our Company in the year ended 30 June 2023 were:

Name

Role

Vaughn Richtor

Chairman

Stephen Davy

Non-Executive Director

Robert Gordon

Non-Executive Director

Commenced

1 September 2019

1 July 2021

12 February 2009

Group, People, 
Remuneration 
and Nominations 
Committee

✓

✓

✓

Sibylle Krieger

Non-Executive Director

1 December 2016

Chair

Warren Lee

Non-Executive Director

Andrea Waters

Non-Executive Director

Brett Morgan

Managing Director, Chief Executive Officer

Gary Dickson

Chief Financial Officer

Mandakini Khanna

Chief Risk Officer

Paul Moss

Chief Operating Officer

Tim Newman

General Manager Lending 

19 October 2017

19 October 2017

17 January 2022

19 October 2019

12 December 2015

13 May 2015

12 June 2023

Janelle Whittle

General Manager People, Community and Public Affairs

22 January 2018

Claudio Mazzarella General Manager Everyday Banking and Marketing

29 May 2023

Name

Role

Heather McGovern

General Manager Digital and Marketing

Alan Logan 

Huw Bough

General Manager Wealth Management 

General Manager Banking 

Ceased

13 July 2022

9 June 2023

2 October 2023

Our remuneration framework

Philosophy and principles
MyState Limited’s remuneration policy is founded on a company-wide commitment to transparency, ethical practices and 
the creation of long-term value. The framework is designed to encourage and reward actions by executives that deliver positive 
results for both customers and shareholders through good discipline and strong financial performance, prudent risk management, 
and the maintenance and enhancement of our company’s earned and valued reputation for trustworthiness in the market for 
financial services. The remuneration policy is designed to support these objectives through:

•  Appropriately structured performance-based pay for executives and other eligible employees, including short-term and 

long-term incentive plans.

•  Recognition and reward for strong performance linked to both favourable customer experiences and positive sustainable 

returns to shareholders.

•  A thoughtful balancing of the company’s capacity to pay and our need to attract and retain excellent staff at all levels.

•  Careful structuring of remuneration for our risk and financial control managers, including performance-based payments, 

to preserve their independence in carrying out their important roles.

•  Board discretion over variable remuneration generally, including discretion to apply malus (reduction or forfeiture) 

to Executive incentives, when appropriate, to preserve the interests of shareholders and customers and avoid unexpected 
or unjust outcomes.

•  Enhancement of risk management and governance by maintaining separate structures for Non-Executive Director 

remuneration and Executive remuneration.

36

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
Directors’ remuneration
MyState’s Non-Executive Directors (NEDs) are paid annual fixed fees, including statutory superannuation, for their services. 
They are also entitled to reimbursement of reasonable expenses.

Unlike executives, Non-Executive Directors do not receive short-term or long-term incentive payments. The Board determines 
the level of fees paid to Non-Executive Directors according to two main criteria:

•  the level of skill and experience required to conduct their roles; and

•  the level of fees needed to attract and retain talented Non-Executive Directors.

The Board has obtained independent advice from Mercer executive remuneration consultants to guide its deliberations on 
Director fees. The aggregate remuneration paid to all NEDs, including statutory superannuation, may not exceed the amount 
fixed by shareholders, which is currently $950,000 per year. This total amount has now remained unchanged for 11 years.

Each NED currently receives a base fee of $110,000 per annum, and the Chairman receives $236,500 per annum. Chairs of 
Board Committees (other than the Board Chair) receive an additional $10,000 per annum, the TPT Wealth Limited Board Chair 
receives an additional $30,000 per annum and the Deputy Chair receives an additional $10,000 per annum.

Managing Director and executive remuneration

Executive remuneration mix
MyState Limited’s remuneration packages for the Managing Director and executives who report directly to the Managing 
Director are structured to support the company’s ability to attract and retain talented and experienced leaders, and to provide 
incentives and rewards for high performance and achievement of the company’s goals and objectives over the short, medium 
and long term. Executive remuneration packages comprise three elements: total fixed reward (TFR), cash-based short-term 
incentives (STI) and executive long-term incentive plan (ELTIP).

1. Total fixed reward TFR

incentives STI

plan ELTIP

2.  Cash-based short-term 

3.  Executive long-term incentive 

Total fixed reward (TFR) for executives, 
including the Managing Director, 
comprises a fixed base salary, 
superannuation contributions and 
optional salary sacrifice. The level 
of payment is set with reference to:

•  the relative strategic value and 

importance of the role;

•  the complexity and breadth  

of the role;

•  experience and skills required; and

•  external market considerations 

for comparable positions.

Base salary rates are set with a view 
to attracting and retaining talented 
and culturally aligned executives, 
while delivering value to shareholders. 
Executive salaries are periodically 
reviewed to take into account external 
market conditions, the business-critical 
nature of the role, and individual 
performance.

Cash-based short-term incentives 
(STI) provide appropriate rewards to 
executives for meeting or exceeding 
performance targets and achieving our 
core company goals – both financial 
and non-financial. To this end, STI 
performance measures and associated 
targets are set with reference to the 
drivers of annual company performance 
and the roles of individual executives in 
achieving positive business outcomes. 
The level of STI assigned to executives 
is calculated annually using an STI 
‘scorecard’, which comprises multiple 
performance elements. These include 
financial, growth, cultural, risk and 
compliance, reputational, customer and 
stakeholder measures. Financial and 
non-financial gateways serve to balance 
reward with MyState’s profitability and 
to avoid rewarding conduct that is 
inconsistent with our values and risk 
framework. The STI is calculated as 
a percentage of TFR for each role, 
and the maximum percentage of 
TFR payable as an STI is determined 
by the Board.

Long-term incentive payments to 
executives, in the form of company 
shares or performance rights, under 
the ELTIP exist to encourage and 
culturally embed long-term thinking 
and risk management among 
our company leaders. Long-term 
planning plays an indispensable role in 
preparing the company to meet future 
challenges in an evolving financial 
services marketplace, and to take 
advantage of new opportunities as 
they arise. MyState’s ongoing transition 
to a national, digital business model 
exemplifies this approach – one designed 
to meet the ever-changing needs of 
customers and to sustain long-term 
value for shareholders.

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37

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

continued

FY24 Executive remuneration breakdown

Managing Director & CEO – total target reward

Total fixed remuneration 40%

Maximum STI 28%

Maximum ELTIP 32%

Paid as cash. Performance assessed 
against business performance for 
the financial year

Paid as shares or performance rights

Total shareholder 
return (TSR) 75%

Return on equity 
(ROE) 25%

70% of total fixed reward

80% of total fixed reward

Executives – total target reward

Total fixed remuneration 59%

Maximum STI 18%

Maximum ELTIP 23%

Paid as cash. Performance assessed 
against business and individual 
performance for the financial year

Paid as shares or performance rights

Total shareholder 
return (TSR) 75%

Return on equity 
(ROE) 25%

30% of total fixed reward

40% of total fixed reward

CRO –total target reward

Total fixed remuneration 62%

Maximum STI 19%

Maximum ELTIP 19%

Paid as cash. Performance assessed 
against business and individual 
performance for the financial year

Paid as shares or performance rights

Total shareholder 
return (TSR) 75%

Return on equity 
(ROE) 25%

30% of total fixed reward

30% of total fixed reward

Remuneration governance
A Group People, Remuneration and Nominations Committee – appointed by the MyState Board and comprising four 
Non-Executive Directors – assists the Board in discharging its remuneration governance responsibilities. Among a range 
of functions, the Committee reviews and makes recommendations to the Board on:

•  remuneration arrangements for Directors, the Managing Director and other Executives;

•  Executive incentives, including setting gateways, performance measures and targets at the commencement of the performance 
period, and assessing performance outcomes against these measures and targets at the conclusion of the performance 
period, and making recommendations for payment or otherwise; and

•  the appropriate exercise of Board discretion on variable remuneration matters.

The Committee assists the Board to meet remuneration obligations required by APRA Prudential Standards and the Banking 
Executive Accountability Regime (BEAR). The Committee also aims to eliminate conflicts of interest from decisions concerning 
executive remuneration. To this end, no executive is directly involved in deciding their own remuneration.

Company performance
MyState’s financial performance in recent years has helped to inform the level of incentive-based remuneration – both short 
term and long term.

In May 2021, the company announced a substantial capital raise and its intention to accelerate growth. The growth strategy 
has the following objectives:

•  accelerated home loan and retail deposit growth over the medium term, while maintaining asset quality;

•  improved operating leverage (as measured by the cost to income ratio) in line with business growth;

•  ROE accretion as capital is deployed; and

•  sustainable growth in EPS over the medium term.

38

MyState LimitedAnnual Report 2023As shown below, in FY23 the company has delivered a record full-year profit and strong momentum across key metrics.

Indicator

Statutory profit after income tax ($’000)

Statutory earnings per share (EPS) (cents)

Dividends paid ($’000)

Share price (dollar)

Statutory average return on equity (%)

Statutory cost-to-income ratio (%)

Key highlights for FY23 include:

2019

30,987

34.17

26,016

4.49

9.7

64.8

2020

30,060

32.86

26,241

3.93

9.2

62.8

2021

36,341

39.18

11,508

4.68

10.3

63.1

2022

32,026

30.34

26,874

4.08

7.7

68.4

2023

38,502

35.45

24,720

3.17

8.7

64.0

•  Record customer growth and strong portfolio growth across home lending and deposits.

•  Improved operating leverage with the cost-to-income ratio falling 440 basis points.

•  ROE and EPS accretion as the growth capital has been deployed.

The company has performed strongly across 
various financial indicators in FY23. 

Home loans
book – $7.8b
– up 14.1%
on the pcp

Geographical spread
with 68% of the
home loan book on
mainland Australia

Customer
deposits $6.2b 
– up 12.3% on pcp

19,346 new
to bank customers
– up 33% on pcp

Strong customer
advocacy
(NPS +35)

Transformation
to a national
digital business
model with 96%
of transactions
completed digitally

pcp – previous corresponding period 

  NPS – Net Promoter Score

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39

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

continued

Short-term incentive (STI) payments

How STI payments are calculated 
Each year, the Group People, Remuneration and Nominations Committee (the Committee) recommends to the Board key 
performance indicators (KPIs) for the Managing Director with reference to short-term incentive payments. The Managing Director, 
in turn, recommends KPIs for executives to the Committee, which then makes a recommendation to the Board. KPIs for STI 
payments include both financial and non-financial metrics that are considered consistent with the business plans of the Group 
and also supportive of the desired culture of the Group.

At the end of each financial year, the Managing Director assesses the performance of the executives against their KPIs and 
makes a recommendation for each executive to the Committee. Simultaneously, the Committee assesses the performance 
of the Managing Director against the relevant KPIs. After consultation with the Chair of the Group Risk Committee, the Committee 
recommends STI payment amounts for approval by the Board.

The Board retains complete discretion over STI payments, including the right to reduce or forfeit payments as it sees fit. 
The annual STI component may be reduced or forfeited if the company, or an individual executive, does not meet the ‘gateway’ 
criteria approved by the Board at the start of the financial year.

Threshold performance levels for risk and compliance, executive behaviour standards and profit must be met or exceeded 
for payments to be made under the STI program.

Executives are assessed as a group with reference to performance on net profit, and on risk and compliance – including 
corporate reputational matters. Individual executive behaviours are assessed against the MyState values, and individual 
executives’ risk and compliance accountabilities are measured via a scorecard comprising several indicators. The Board 
has the discretion to reduce the STI (including to zero) if any of these gateways are not met.

The STI scorecard includes a mix of financial and non-financial metrics, with the relative weightings varying between different 
executive roles.

The scorecard comprises a diverse list of both quantitative and qualitative performance measures (or criteria), which have been 
chosen with a view to driving positive outcomes not just for MyState shareholders, but also for customers, employees and other 
key stakeholders of the organisation.

Quantitative performance measures include earnings per share, cost to income ratio, funds under management, loan book 
growth, net customer growth and employee engagement. Executives are also individually assessed with reference to their 
performance as leaders in their specific roles, and to their individual contributions to the future development of the organisation. 
The Board has the discretion to vary STI outcomes to reflect differing levels of performance.

The 3 Cs – MyState Values 

Create customer ‘wow’

Chase the better

Collaborate to win

•  We walk in our customers’ shoes 

•  We are bold in our ambition.

•  We care for each other, our customers, 

and appreciate their perspectives.

•  We seek out and embrace the 

partners and community.

•  We think and act in the best interest 

change that is required to succeed.

•  We give our best, do the right thing, 

of our customers.

•  We have the courage to try new 

and trust our colleagues to do the same.

•  We are clear, concise and trustworthy 

things and grow from our failures.

•  We hold each other to account.

in our customer interactions.

•  We design and deliver exceptional 

customer experiences, with a 
human touch.

•  We make things simpler and easier 

for our customers.

•  We simplify (and digitise) to deliver.

•  We openly share information so that 

•  We seek industry-leading productivity 
and always drive for better outcomes.

everyone can make informed decisions.

•  We reach out across teams to rapidly 
solve problems – and celebrate our 
successes and learnings!

40

MyState LimitedAnnual Report 20232022-2023 ‘gateway’ criteria for short-term incentive payments
If threshold performance is not met, the STI may be reduced or forfeited at the discretion of the Board. The Board retains 
a residual discretion not to award or pay STIs even if the measures have been met, if in its reasonable view, the needs 
of the Group require this.

Gateway

1. Group risk

Assessment measures

MyState Group meets compliance and risk management obligations; reputation is not 
materially damaged; capital adequacy and liquidity are managed within Board limits.

2. Individual risk

Individual risk scorecard meets the standard required.

3. Individual accountability

An Accountable Person meets their personal accountability obligations as per the BEAR.

4. Group profit

NPAT exceeds FY23 Budget.

5. Values and behaviours 

Individual meets behaviour expectations, assessed against the MyState values.

STI outcomes for 2022-2023
The following key performance measures for the STI component and the level of achievement were assessed by the Board 
for the 2022-2023 financial year:

Area

Drivers

Measures

Performance

Earnings

Increasing earnings per share

Net interest margin

Managed in accordance with Board expectations

Financial

Funds under management Growing funds under management in our wealth business

Balance sheet

Growing the size of our loan book

Employee experience

Positive employee experience score

People

Leadership

Lifting the bar on leadership

Individual contribution to delivery of strategically significant projects

Culture

Evolving our customer-centric culture

Customer

Growth

New to bank customer growth

  Met or exceeded target 

  Below target 

  Target partially met

While the overall result for the Group was strong, the Board sets the executive ambitious targets. Key financial targets were 
partially met and were impacted by the intensity of industry competition and slowing demand for credit, in large part due 
to the challenging macroeconomic environment.

It is pleasing to note our growth in home lending and new to bank customers is evidence of the company’s capability to execute 
on the accelerated growth plan. Our employee experience score (which uses the results of our annual employee engagement 
survey) was also higher than the previous year.

The proof points of strong growth in customer numbers and significant above-system growth in our home loan portfolio 
demonstrate our growth strategy is working. We have not yet achieved all that we set out to at the time of the capital raise in 
June 2021, and our decision not to pay STIs is a reflection of our commitment to align company performance with remuneration. 
The Board has, however, exercised the discretion which it always holds and awarded cash bonuses to select Executives for 
their significant contribution to our record Group performance. The total awarded is a small percentage of what the maximum 
STI opportunity could have been had the gateways been open, as disclosed in the statutory tables.

If the results on which any STI reward was based are subsequently found by the Board to have been the subject of deliberate 
management misstatement, error, misrepresentation or act or omission, which the Group People and Remuneration Committee 
or the Board (acting reasonably) considers would have resulted in the KPIs not being satisfied, or there is otherwise a reward 
decision incorrectly made, the Board may require repayment of the whole or part of the relevant STI, in addition to taking any 
other disciplinary actions.

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41

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

continued

Payment offers
Details of STI payment offers for the 2022-2023 financial year and the 2021-2022 financial year are set out below.

The following key performance measures for the STI component and the level of achievement were assessed by the Board 
for FY23:

Key Management Personnel

% max. 
(of TFR)

Max. 
payable

%  
awarded

%  
forfeited

$  
amount  
paid

% which 
is not yet 
assessed for 
payment

2022-2023

Brett Morgan

Gary Dickson

Mandakini Khanna

Tim Newman

Huw Bough1

Alan Logan1

Paul Moss

Janelle Whittle

Claudio Mazzarella2

2021-2022

Brett Morgan1

Gary Dickson

Mandakini Khanna

Heather McGovern

Huw Bough

Alan Logan1

Paul Moss

Janelle Whittle

Melos Sulicich1

60%

30%

30%

30%

30%

30%

30%

30%

–

60%

30%

30%

30%

30%

30%

30%

30%

60%

$375,000

$120,000

$117,000

$112,500

$117,000

$111,000

$109,500

$94,500

–

$169,521

$120,000

$117,000

$99,000

$117,000

$92,130

$109,500

$94,500

$187,500

0%

0%

0%

0%

0%

0%

0%

0%

–

0%

0%

0%

0%

0%

0%

0%

0%

0%

100%

100%

100%

100%

100%

100%

100%

100%

–

100%

100%

100%

100%

100%

100%

100%

100%

100%

$0

$0

$0

$0

$0

$0

$0

$0

–

$0

$0

$0

$0

$0

$0

$0

$0

$0

0%

0%

0%

0%

0%

0%

0%

0%

–

0%

0%

0%

0%

0%

0%

0%

0%

0%

1.  Pro-rata max payable based on commencement and cessation dates as applicable.

2.  No STI on offer in FY23 due to commencement date.

Executive Long-Term Incentive Plan (ELTIP)

How the ELTIP works
The Executive Long-Term Incentive Plan (ELTIP) was established by the Board to encourage and motivate the Managing 
Director and other eligible executives by rewarding them with company shares for helping to create long-term value for the 
company’s shareholders. Until 30 June 2021, participating executives were allocated fully paid ordinary shares in the company, 
without payment, if performance criteria specified by the Board were satisfied in a set period. Since 1 July 2021, the allocations 
have been in the form of ‘performance rights’, which, on vesting, deliver one share for each vested performance right.

Each year, the Board has the discretion to offer executives shares/performance rights worth up to a specified percentage of 
their total fixed reward (salary). The 2020-2022 offers have been equal to 70% of total fixed reward for the Managing Director, 
and 30% of total fixed reward for eligible executives. The 2023 offer is equal to 80% of total fixed reward for the Managing 
Director, and a range of 30%-40% for eligible executives as determined by the Board. The number of shares or performance 
rights allocated is based on the volume weighted average price (VWAP) of shares calculated over the 20 trading days to 
30 June immediately prior to the commencement of the performance period for the relevant offer.

42

MyState LimitedAnnual Report 2023For the shares or performance rights to vest, certain performance criteria must be satisfied within the specified 
performance period.

Both the performance criteria and the performance period are set by the Board alone. ELTIP performance measures for 
the 2020-2022 offers are weighted equally between relative total shareholder return (TSR) and return on equity (ROE). 
The relative TSR incorporates both dividends paid and movements in share prices, while the ROE is a measure of corporate 
profitability. For the 2023 offer the TSR performance measure will have a weighting of 75% and the ROE performance measure 
will have a weighting of 25%.

Currently the Board has set three financial years, commencing with the year in which an offer is made, as the performance 
period. Relative TSR and statutory ROE have been set as the performance criteria for the 2020, 2021, 2022 and 2023 offers. 
The Board may adjust the statutory ROE performance criteria for one-off items for the 2020 and subsequent offers.

The performance criteria are assessed following the completion of each performance period. Under the ELTIP rules, 
an assessment is made against the performance criteria to determine the number of shares or performance rights awarded 
to the Managing Director and each participating executive.

Shares or rights cannot be allocated for a further two years. This means a total period of five years will elapse from the 
commencement of the performance period to the time when shares are vested. Any ELTIP reward is subject to reassessment 
and possible reduction or forfeiture. This enables the Board to adjust share allocations (potentially to zero) to protect the financial 
soundness of the company or respond to significant unforeseen or unexpected consequences. In addition, if the Managing 
Director or a participating executive is an accountable person under the BEAR, allocating the shares will be subject to the 
Board being satisfied that the accountable person has met their accountability obligations. The number of shares allocated 
(and/or value of any associated payment) may be reduced or cancelled to the extent that the Board determines that the 
accountability obligations have not been met.

Allocation of shares to the Managing Director and eligible executives is ultimately at the complete discretion of the Board. 
The ELTIP rules provide that an independent trustee, acting at the direction of the company, may acquire and hold allocated 
shares on behalf of executives. The participating executive cannot transfer or dispose of shares before they have been allocated 
to them. Any shares or performance rights to be allocated to the Managing Director under this plan require shareholder approval 
in accordance with ASX listing rules. Participating executives are required to not hedge their economic exposure to any allocated 
non-vested entitlement.

Failure to comply with this directive will constitute breach of duty and may result in forfeiture of the offer and/or dismissal.

Commencement of employment during a financial year
Subject to Board approval, a pro-rata ELTIP offer can be made to an executive who commences employment during the 
financial year, but before 1 April. The terms of the offer must be consistent with all other offers for that year, irrespective of the 
date of employment commencement.

Cessation of employment
Executives who cease employment with the company will be eligible to receive shares only if the cessation is due to a Qualifying 
Reason, as defined by the ELTIP Plan Rules. Qualifying Reasons include death, total and permanent disability, retirement at 
normal retirement age, redundancy or other such reason as the Board may determine. Where an ELTIP participant ceases 
employment, their ELTIP offer will be assessed by the Board at the end of the performance period along with all other participants, 
subject to meeting the 12-month employment hurdle that applies to any ELTIP offer. If the separated employee is an accountable 
person under BEAR, any awarded shares will not be allocated until all BEAR requirements are satisfied, including the variable 
remuneration deferral period.

Entitlement to dividend income
When shares allocated to an executive are held by a trustee, the executive is entitled to receive dividend payments on 
the allocated shares and to have the trustee exercise the voting rights on those shares in accordance with the executive’s 
instructions. However, executives have no entitlements to dividends or voting rights for shares or performance rights during 
the deferral period.

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43

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

continued

ELTIP outcomes 2022-2023
Payment offers

Details of offers made under the Executive Long-Term Incentive Plan (ELTIP) are detailed in the following table:

Offer

2020

2021

2022

Performance period

1 July 2020 to 30 June 2023 1 July 2021 to 30 June 2024

1 July 2022 to 30 June 2025

The comparator group

Fair value of shares on offer date1

Members of the S&P/ASX300

•  Managing Director

Managing Director $3.36 

Managing Director $3.10 

Managing Director $3.66 

•  Other Executives

Other Executives $3.36

Other Executives $3.10

Other Executives $3.87

Offer date

•  Managing Director3

16 November 2020 

17 January 2022 

19 October 2022 

•  Other executives3

16 November 2020

23 September 2021

19 August 2022

Value of offer2

•  Managing Director

•  Other executives

$312,500

$649,500

$197,774 

$750,699

$333,922 

$645,462

1.  The fair value of offers that are assessed and awarded on market-based conditions is determined on the grant date in accordance with AASB 2. The fair 
value is used to recognise an expense over the performance period for the TSR component of offers. The fair value attached to the offer to the Managing 
Director was subject to valuation review following shareholder approval of the “2022” Offer at the 2022 Annual General Meeting.

2.  The value of the offer is the maximum value calculated as at the date of offer at that time. As such, it may include the value of offers made to individuals 

who are no longer executives of the company.

3.  Pro-rata offer made in respect of the “2021” offer to Alan Logan and Brett Morgan.

Calculation of the reward TSR component
The ELTIP offers TSR components will vest on the following basis.

TSR component

For the 2020 offer:

MYS TSR relative to the ASX 300:

Percentage of the applicable reward that will vest:

Below the 25th percentile:

At the 25th percentile

0

25%

Between the 25th and 75th percentile

Straight line basis between 25% and 100%

Above the 75th percentile

100%

For the 2021 and 2022 offers:

MYS TSR relative to the ASX 300:

Percentage of the applicable reward that will vest:

Below the 50th percentile

At the 50th percentile

0%

50%

Between the 50th percentile and the 75th percentile

Straight line basis between 50% and 100%

At or above the 75th percentile

100%

For the 2023 offer: 

MYS TSR relative to the ASX 300:

Percentage of the applicable reward that will vest:

Below the 50th percentile

At the 50th percentile

0%

50%

Between the 50th percentile and the 75th percentile

Straight line basis between 50% and 100%

At or above the 75th percentile

100%

44

MyState LimitedAnnual Report 2023Calculation of the reward ROE component
The performance period for the ROE component for the ELTIP reward will be based upon the Company’s post-tax ROE 
and will be payable on the following basis.

ROE component

For the 2020 offer:

MYS aggregate statutory ROE, which may be 
adjusted for one-off items at the discretion 
of the Board, for the performance period:

Below 27.00%

27.00%

27.00% to 30.00%

30.00% or above

For the 2021 and 2022 offers:

Statutory ROE with Board discretion  
to adjust for one-off items:

Below 30.00%

30.00%

30% to 31.50%

31.50% or above

For the 2023 offer: 

Percentage of the applicable reward that will vest:

0%

25%

Straight line from 25% to 100%

100%

Percentage of the applicable reward that will vest:

0%

50%

Straight line basis from 50% to 100%

100%

Statutory ROE with Board discretion  
to adjust for one-off items:

Percentage of the applicable reward that will vest:

Below 30.00%

30.00%

30% to 31.50%

31.50% or above

0%

50%

Straight line basis from 50% to 100%

100%

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45

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

continued

Actual and potential ELTIP share allocations
The following table details, for current and former KMP, the status of offers made under the ELTIP. The ‘2019’ offer performance 
period was completed on 30 June 2022. The ‘2020’ offer performance period was completed on 30 June 2023.

2020 offer

Component Maximum offer

Key Management Personnel

Melos Sulicich1

Gary Dickson

Mandakini Khanna

Heather McGovern

Anthony MacRae

Paul Moss

Craig Mowll

Janelle Whittle

Forfeited 
lapsed

Awarded in 
the 2022-23 
financial year

Not yet 
assessed 
for vesting

Number of shares

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

38,676

38,675

14,852

14,851

14,480

14,480

12,253

12,252

14,480

14,480

13,552

13,552

14,480

14,480

10,767

10,767

31,521

38,675

9,357

14,851

9,122

14,480

12,253

12,252

14,480

14,480

8,538

13,552

14,480

14,480

6,783

10,767

7,155

–

5,495

–

5,358

–

–

–

–

–

5,014

–

–

–

3,984

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

2019 offer

Component Maximum offer

Forfeited 
lapsed

Awarded in 
the 2021-22 
financial year

Not yet 
assessed 
for vesting

Key Management Personnel

Number of shares

Melos Sulicich1

Gary Dickson2

Mandakini Khanna

Heather McGovern

Anthony MacRae

Paul Moss

Craig Mowll

Janelle Whittle

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

34,036

34,035

9,570

9,570

12,743

12,743

10,783

10,782

12,743

12,743

11,926

11,926

12,743

12,743

9,476

9,475

17,199

34,035

3,866

9,570

5,148

12,743

10,783

10,782

12,743

12,743

4,818

11,926

12,743

12,743

3,828

9,475

16,837

–

5,704

–

7,595

–

–

–

–

–

7,108

–

–

–

5,648

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

1.  The awarding of the 2020 offer is subject to shareholder approval subsequent to the publishing of this report.

2.  Pro-rata offer made for ‘2019’.

46

MyState LimitedAnnual Report 2023The 2021, 2022 and 2023 offers have not been assessed for vesting. The following table shows the maximum number of shares 
available under each of these offer.

Key Management Personnel

Number of shares

Component

2021 offer

2022 offer

2023 offer2

Brett Morgan1

Gary Dickson

Mandakini Khanna

Heather McGovern

Paul Moss

Janelle Whittle

Huw Bough

Alan Logan1

Tim Newman

Claudio Mazzarella

1.  Pro-rata offer made for ‘2021’.

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

TSR

ROE

20,602

20,601

12,500

12,500

12,188

12,187

10,313

10,312

11,407

11,406

9,844

9,844

12,188

12,187

9,630

9,630

–

–

–

–

52,458

52,458

14,389

14,388

14,029

14,029

–

–

13,130

13,129

11,331

11,331

14,029

14,029

13,310

13,309

–

–

–

–

121,905

40,635

39,048

13,016

29,286

9,762

–

–

35,714

11,905

30,952

10,317

–

–

–

–

35,714

11,905

35,714

11,905

2.  The Board has made the decision, subject to shareholder approval for the Managing Director and CEO, and acceptance of the offers by relevant 

participants, to award up to 437,778 performance rights under the 2023 ELTIP and that such offer will be notified to the market if and when shareholder 
approval/acceptances are received.

Review of executive remuneration

During FY23, the Committee commissioned independent advice to benchmark in the case of Non-Executive Directors, 
the size of the remuneration pool and the remuneration treatment of Board Committee responsibilities, and in the case 
of executives, benchmark executive remuneration. With the benefit of that advice, the Board decided to make a number 
of changes. These changes have been implemented and include adjustments to the maximum opportunity available for 
incentives and to fixed remuneration. Increases to fixed remuneration take effect from October 2023, The details of individual 
executive terms and conditions are provided in the section titled Executive employment agreements. Our Executive remuneration 
framework will be subject to further review following the introduction of the Financial Accountability Regime (FAR).

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47

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

continued

Statutory tables

Financial 
year

Salary 
& fees

Cash 
bonus1

Other 
short-term 
benefits

Non- 
monetary 
benefits2

Post- 
employ-
ment

Termin-
ation 
benefits

Share-
based 
payment3

Total

Non-Executive Directors

Vaughn Richtor 2023

 214,027 

2022

130,519

Miles Hampton 2023

–

2022

157,942

Robert Gordon 2023

 103,997 

2022

95,903

Sibylle Krieger

2023

 108,597 

Warren Lee

2022

2023

2022

Stephen Davy

2023

2022

109,091

 108,597 

109,091

 99,548 

101,923

Andrea Waters

2023

 116,930 

Total NED

2022

2023

2022

120,000

 751,696 

 824,469 

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

 22,473 

13,052

–

1,191

15,794

–

–

–

–

–

–

–

–

–

–

 26,003 

26,750

 11,403 

10,909

 11,403 

10,909

 10,452 

10,183

 3,070 

–

 84,804 

1,191

 87,597 

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–  236,500 

–

–

–

143,571

–

174,927

–  130,000 

–

122,653

–  120,000 

–

120,000

–  120,000 

–

120,000

–  110,000 

–

112,106

–  120,000 

–

120,000

–  836,500 

–

 913,257 

48

MyState LimitedAnnual Report 2023Financial 
year

Salary 
& fees

Cash 
bonus1

Other 
short-term 
benefits

Non- 
monetary 
benefits2

Post- 
employ-
ment

Termin-
ation 
benefits

Share-
based 
payment3

Total

–

–

–

–

–

Executives

Brett Morgan

2023

597,500

35,000

2022

282,663

Melos Sulicich

2023

–

2022

358,105

Gary Dickson

2023

362,558

Mandakini 
Khanna

Heather 
McGovern

Paul Moss

2022

2023

2022

2023

2022

2023

2022

374,622

362,500

40,000

362,500

40,000

11,635

302,500

–

–

335,876

40,000

337,500

–

Janelle Whittle

2023

289,636

30,000

2022

279,396

30,000

Tim Newman

2023

326,685

30,000

Claudio 
Mazzarella

Huw Bough

Alan Logan

2022

2023

2022

2023

2022

2023

2022

Anthony MacRae 2023

Craig Mowll

2022

2023

2022

–

36,858

–

380,625

–

–

–

–

362,500

20,000

318,789

293,760

–

13,500

–

–

–

–

–

–

–

–

Total Executive 2023

3,022,662

175,000

Total KMP

2022

2023

2022

2,967,046

90,000

3,774,358

175,000

3,791,515

90,000

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

3,411

1,302

–

–

–

–

3,411

1,302

–

–

3,411

1,302

3,411

1,302

–

–

–

–

–

–

–

–

–

–

–

–

34,276

13,010

–

25,538

26,990

24,975

27,500

37,594

–

–

–

–

–

–

–

–

65,451

735,638

32,869

 329,844 

–

 – 

(27,811)

 355,832 

46,805

436,353

42,623

 442,220 

45,633

479,044

42,695

 484,091 

13,433

153,354

–

 178,422 

27,500

27,368

27,500

26,752

27,500

30,477

–

3,524

–

27,500

27,500

–

–

–

–

–

–

–

–

–

–

–

36,129

366,129

42,709

449,364

39,959

 406,261 

35,564

385,363

33,251

 371,449 

8,811

395,973

–

–

–

 – 

 40,382 

 – 

12,221

420,346

23,416

 433,416 

27,500

114,576

3,816

464,681

23,586

–

96

–

–

–

–

–

–

–

17,692

 335,038 

–

 – 

(24,263)

(10,667) 

–

 –

(8,446)

(8,446) 

13,644

245,320

267,930

261,010 3,985,566

5,208

234,799

–

208,114  3,505,167 

13,644

330,124

267,930

261,010 4,822,066

6,399

322,396

–

208,114  4,418,424 

1.  The cash bonus shown in ‘2022’ and ‘2023’ represents the gratuity amount award in respect to performance for select KMP.

2.  Non-monetary benefits consist of car parking expense, travel and accommodation and entertainment.

3.  Share-based payment amounts have been calculated in accordance with the relevant accounting policy and accounting standards. The fair value of the 
share grant is calculated at the date of grant and is allocated to each reporting period evenly over the period from grant date to vesting date. This fair 
value will generally be different to the value of shares at the time they vest. The value disclosed is the portion of the fair value of the share grant allocated 
to this reporting period. These amounts represent share grants that will only vest to the KMP when certain performance and service criteria are met. In some 
circumstances all, or a portion, of the shares may never vest to the KMP. As these figures are based on accrual accounting and are not a reflection of 
actual cash paid or shares vested, negative figures can result in the event of accrual reversals being recorded. Amounts stated are in respect of the period 
that the individual held a role of a KMP.

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49

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

continued

Shareholdings of Key Management Personnel (KMP)

Non-Executive Director minimum shareholding
In the absence of approval from the Board to the contrary, Non-Executive Directors are required to acquire and maintain, 
directly or indirectly, shares in MyState Limited to the equivalent of one year’s pre-tax base Director’s fee or base Chair fee 
as the case may be. The minimum requirement must be achieved within four years of their appointment as NED or as Chair. 
The value of the shares held for the purpose of calculating the MSR will be determined by the price of the shares at time purchase.

Managing Director minimum shareholding requirement
In the absence of approval from the Board to the contrary, the Managing Director will be required to acquire and maintain 
shares in MyState Limited equivalent to 50% of their total fixed reward (TFR) within four years of appointment. Any shares 
subject to deferral (including shares that may be allocated in respect of awarded performance rights) will be recognised 
for the purposes of the requirement. The shares in MyState Limited may include shares obtained prior to commencement 
of employment and/or shares acquired through ELTIP or any other scheme. The value of the shares held for the purpose 
of calculating the MSR will be determined by the price of the shares at the time of purchase, or the “issue price” in the case 
of any shares acquired under the ELTIP.

Related parties of KMP shareholdings
Details of ordinary shares in the company held by KMP and their related parties are set out in the table below. Related parties 
include close family members and entities under joint or several control, or significant influence, of the KMP and their close 
family members. No equity transactions with the KMP, other than those arising as payment for compensation, have been 
entered into with the company. 

50

MyState LimitedAnnual Report 2023Key Management 
Personnel

Number of 
shares at 
commencement 
of financial year1  
1

Number of shares 
awarded but not 
yet vested3  
2

Net change  
other2  
3

No. of shares 
at end of 
financial year  
1 + 2 + 3

Of which:  
No. of shares at 
end of financial 
year held by 
ELTIP Trustee4

Non-Executive Directors

Vaughn Richtor

Robert Gordon

Sibylle Krieger

Warren Lee

Andrea Waters

Stephen Davy

Subtotal

Executives

Brett Morgan

Melos Sulicich5

Gary Dickson

Paul Moss

Janelle Whittle

Tim Newman

Mandy Khanna

Claudio Mazzarella

Heather McGovern

Huw Bough

Alan Logan

Subtotal

17,518

36,725

28,257

37,641

33,736

–

153,877

4,250

32,963

5,704

25,673

17,798

–

27,954

–

1,470

–

–

–

–

–

–

–

–

–

–

7,155

5,495

5,014

3,984

–

5,358

–

–

–

–

12,694

2,000

1,737

–

2,073

–

18,504

10,000

–

–

818

–

–

835

–

–

–

–

30,212

38,725

29,994

37,641

35,809

–

172,381

14,250

40,118

11,199

31,505

21,782

–

34,147

–

1,470

–

–

–

–

–

–

–

–

–

–

–

–

14,119

2,232

–

14,421

–

–

–

–

115,812

27,006

11,653

154,471

30,772

1.  Number of shares at commencement of financial year agrees to the closing position per FY22 remuneration report and includes shares issued and awarded 
under the ‘2019’ offer and shares that have vested under the ‘2018’ offer. From the ‘2018’ offer onwards, under BEAR requirements, any shares awarded 
are ‘held’ in suspension pending the additional Board assessment (two years post) that there has been no subsequent forfeiture event. 

2.  KMP personal share purchase or participation in Dividend Reinvestment Plan (DRP).

3.  These amounts are the shares awarded but not yet vested under the ‘2020’ ELTIP offer.

4.  These amounts are the shares awarded under the ‘2016 and 2017 ELTIP offer’ and may also include shares subsequently received through participation 

in the DRP. These shares have been issued and are held by the trustee on behalf of the executives.

5.  Melos Sulicich retired on 31 December 2021. The opening balance in column 1 includes shares that have been awarded and vested under the ‘2018’ 

ELTIP offer and shares awarded but not yet vested under the ‘2019’ ELTIP offer.

Loans to Key Management Personnel

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Loan transactions
Loans to KMP and their related parties (including close family members and entities over which the KMP and/or their close family 
members have control, joint control or significant influence) are provided in the ordinary course of business. Normal commercial 
terms and conditions are applied to all loans. Any discounts provided to KMP are the same as those available to all employees 
of the Group. There have been no write-downs or amounts recorded as provisions during FY23.

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Details of loans held by KMP and their related parties during FY23, where the individual’s aggregate loan balance exceeded 
$100,000 at any time in this period, are as follows:

Key Management Personnel

Brett Morgan

Balance as at 
1 July 2022

Interest charged 
during the year

Balance as at 
30 June 2023

Highest balance 
during the year

$967,147

$2,727

Nil

$967,147

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51

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration report

continued

Executive employment agreements
The Managing Director and executives are employed under individual open-ended employment contracts that set out the 
terms of their employment, as detailed below.

Incumbent

Commenced 
in role

Contract 
term

TFR

Short-term 
incentive 
(maximum)

ELTIP 
(maximum)

Termination provisions in the event 
of termination by the Company

Brett Morgan1

17 January 2022 Ongoing

$640,000

70% of TFR

80% of TFR

Notice:

The contract may be terminated 
by the Company with six months’ 
notice or payment in lieu of notice.

Entitlement:

•  Pro-rata STI payment applied 
as at the date of termination.

•  Payment of STI if the performance 
period is complete but not yet paid.

•  Pro-rata ELTIP allocation, 

in accordance with the ELTIP rules.

Notice:

Each contract can be terminated 
by the Company upon provision 
of three months’ notice.

Entitlement:

•  Pro-rata STI payment applied 
as at the date of termination.

•  Payment of STI if the 

performance period is complete 
but not yet paid.

•  Pro-rata ELTIP allocation, 

in accordance with the ELTIP rules.

Notice:

Each contract can be terminated 
by the Company upon provision 
of three months’ notice.

Entitlement:

•  Payment of the equivalent of 

six months’ TFR (inclusive of the 
provision of three months’ notice).

•  Pro-rata STI payment applied 
as at the date of termination.

•  Payment of STI if the performance 
period is complete but not yet paid.

•  Pro-rata ELTIP allocation, 

in accordance with the ELTIP rules.

40% of 
TFR upon 
invitation to 
participate

40% of 
TFR upon 
invitation to 
participate

30% of 
TFR upon 
invitation to 
participate

Tim Newman2 9 August 2022

Ongoing

$375,000

30% TFR

Alan Logan

30 August 2021

Ongoing

$370,000

Claudio 
Mazzarella

29 May 2023

Ongoing

$375,000

Huw Bough

1 June 2021

Ongoing

$390,000

Gary Dickson 19 October 2019 Ongoing

$410,000

30% TFR

Paul Moss

13 May 2015

Ongoing

$375,000

Janelle Whittle 22 January 2018 Ongoing

$325,000

Mandakini 
Khanna

1 December 2015 Ongoing

$410,000

1.  Required to hold shares to the value of 50% of TFR.

2.  Initial commencement in an executive role. Appointed GM Lending 12 June 2023.

Signed in accordance with a resolution of the Directors.

Vaughn Richtor  
Chairman

Brett Morgan  
Managing Director and Chief Executive Officer

Hobart, dated this 18 August 2023

52

MyState LimitedAnnual Report 2023Financial report

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the consolidated financial statements

Directors’ declaration

Independent auditor’s report

54

55

56

57

58

59

97

98

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53

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Income Statement
for the year ended 30 June 2023

Interest income

Interest expense

Net interest income 

Non-interest income from banking activities

Net banking operating income

Income from wealth management activities

Total operating income

Less: Expenses

Personnel costs

Administration costs

Technology costs

Occupancy costs 

Marketing costs

Governance costs

Total operating expenses

Profit before impairment and tax expense

Impairment recovery/(expense) on loans and advances

Income from other activities

Profit before tax 

Income tax expense

Profit for the year 

Profit attributable to the:

Equity holders of MyState Limited

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)

The accompanying notes form part of these financial statements.

Notes

 30 June 2023  
$‘000

30 June 2022  
$‘000

2.1

2.1

2.1

2.2

2.4

2.4

2.4

4.3

2.3

6.1

2.5

2.5

 352,971 

 (220,378)

 132,593 

 13,477 

 146,070 

 14,308 

 160,378 

 44,326 

 21,428 

 19,084 

 4,392 

 10,233 

 3,188 

 102,651 

 159,749 

 (49,504)

 110,245 

 15,103 

 125,348 

 14,820 

 140,168 

 42,841 

 17,759 

 17,706 

 4,294 

 10,297 

 2,985 

 95,882 

 57,727 

 44,286 

 (2,542)

 762 

 – 

 55,185 

 16,683 

 38,502 

 854 

 45,902 

 13,876 

 32,026 

 38,502 

 32,026 

 35.45 

 30.85 

 30.34 

 30.15

54

MyState LimitedAnnual Report 2023Consolidated Statement of Comprehensive Income
for the year ended 30 June 2023

Profit for the year 

Other comprehensive income/(expense)

Items that may be reclassified subsequently to profit or loss

Cash flow hedges – Net gains/(losses) taken to equity

Income tax effect

Total other comprehensive income/(expense) for the year

30 June 2023  
$‘000

 30 June 2022  
$‘000

 38,502 

 32,026 

 (806)

 242 

 (564)

 9,966 

 (2,990)

 6,976 

Total comprehensive income for the year

 37,938 

 39,002 

Total comprehensive income for the year is attributable to:

Equity holders of MyState Limited

 37,938 

 39,002 

The accompanying notes form part of these financial statements.

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55

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of Financial Position
as at 30 June 2023

Assets 

Cash and liquid assets

Due from other financial institutions

Other assets

Financial instruments

Loans and advances

Property, plant and equipment and right-of-use assets 

Tax assets

Intangible assets and goodwill

Total assets

Liabilities 

Due to other financial institutions

Deposits and other borrowings including subordinated notes

Employee benefits provisions

Other liabilities 

Tax liabilities

Total liabilities

Net assets

Equity

Share capital

Retained earnings

Reserves

Total equity

The accompanying notes form part of these financial statements.

Notes

 30 June 2023  
$‘000

 30 June 2022  
$‘000

4.1

4.2

4.3

5.1

6.1

5.2

4.5

5.3

4.6

6.1

5.4

 127,778 

 48,003 

 12,085 

 119,215 

 40,924 

 9,831 

 936,880 

 842,926 

 7,908,080 

 6,971,375 

 7,977 

 5,558 

 77,922 

 10,453 

 6,278 

 78,845 

 9,124,283 

 8,079,847 

 66,295 

 22,982 

 8,568,185 

 7,598,184 

 5,345 

 18,111 

 8,784 

 5,585 

 17,213 

 5,970 

 8,666,720 

 7,649,934 

 457,563 

 429,913 

 225,274 

 223,497 

 8,792 

 211,167 

 209,788 

 8,958 

 457,563 

 429,913

56

MyState LimitedAnnual Report 2023Consolidated Statement of Changes in Equity
for the year ended 30 June 2023

Share 
capital  
$‘000

Retained 
earnings  
$‘000

Notes

General 
reserve 
for credit 
losses  
$‘000

Employee 
equity 
benefits 
reserve  
$‘000

Hedging 
reserve  
$‘000

Other 
reserves  
$‘000

Total  
$‘000

 208,196 

 201,044 

 6,238 

 1,038 

 (302)

 (1,000)

 415,214 

At 1 July 2021

Profit for the year

Other comprehensive 
income/(expense)

Total comprehensive 
income for the year

Equity issued under 
employee share scheme

Transfer of unvested 
shares under executive 
long term incentive plan

Equity issued under dividend 
reinvestment plan

General reserve for 
credit losses write-back

Derecognition of 
capitalised costs under 
SAAS arrangements

Share-based payment 
expense recognised

Entitlement offer share 
issuance costs, net of tax

Dividends paid

At 30 June 2022

At 1 July 2022

Profit for the year

Other comprehensive 
income/(expense)

Total comprehensive 
income for the year

Equity issued under 
employee share scheme

Equity issued under 
dividend reinvestment 
plan underwrite

Share-based payment 
expense recognised

Tax related movement 
– Executive long term 
incentive plan (ELTIP)

General reserve for 
credit losses write-back

Dividend reinvestment plan 
issuance costs net of tax

Dividends paid

At 30 June 2023

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 32,026 

 – 

 – 

 – 

 32,026 

5.4

 62 

 – 

 – 

 238 

 3,000 

 – 

5.4

5.4

5.4

2.6

 – 

 3,981 

 (3,981)

 – 

 – 

 (91)

 – 

 (627)

 – 

 – 

 (26,874)

 – 

 – 

 – 

 – 

 – 

 38,502 

 – 

 – 

 – 

 38,502 

5.4

 50 

5.4

 10,058 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 38 

 (111)

 111 

5.4

2.6

 (147)

 – 

 – 

 (24,720)

 – 

 – 

Equity issued under dividend 
reinvestment plan

5.4

 4,146 

 – 

 – 

 – 

 – 

 (238)

 – 

 – 

 – 

 227 

 – 

 – 

 – 

 – 

 32,026 

 6,976 

 – 

 6,976 

 6,976 

 – 

 39,002 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 62 

 – 

 3,000 

 – 

 (627)

 227 

 (91)

 (26,874)

 – 

 – 

 – 

 – 

 – 

 – 

 287 

 – 

 – 

 – 

 – 

 – 

 – 

 38,502 

 (564)

 – 

 (564)

 (564)

 – 

 37,938 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 50 

 – 

 10,058 

 – 

 – 

 – 

 – 

 – 

 – 

 4,146 

 287 

 38 

 – 

 (147)

 (24,720)

 211,167 

 209,788 

 211,167 

 209,788 

 2,257 

 2,257 

 1,027 

 1,027 

 6,674 

 (1,000)

 429,913 

 6,674 

 (1,000)

 429,913 

The accompanying notes form part of these financial statements.

 225,274 

 223,497 

 2,368 

 1,314 

 6,110 

 (1,000)

 457,563

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57

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of Cash Flows
for the financial year ended 30 June 2023

Cash flows from operating activities

Interest received

Interest paid

Fees and commissions received

Other non-interest income received

Payments to suppliers and employees 

Income tax paid

(Increase)/decrease in operating assets:

Due from other financial institutions

Financial instruments

Loans and advances

Increase/(decrease) in operating liabilities:

Due to other financial institutions

Notes

30 June 2023  
$ ‘000

30 June 2022  
$ ‘000

 374,687 

 (175,287)

 28,006 

 454 

 (98,173)

 (13,278)

 177,087 

 (44,119)

 27,351 

 1,688 

 (90,104)

 (7,220)

 (5,740)

 (1,864)

 (91,918)

 (135,256)

 (963,355)

 (1,381,203)

 65,681 

 1,706 

Deposits and other borrowings excluding subordinated notes and floating rate notes

 805,352 

 1,402,550 

Net cash flows from/(used in) operating activities

4.1

 (73,571)

 (49,384)

Cash flows from investing activities

Purchase of intangible assets

Proceeds from sale of non-current assets held for sale

Purchase of property, plant and equipment

Net cash flows from/(used in) investing activities

Cash flows from financing activities

Employee share issue

Entitlement and placement offer share issue

Payments for lease liabilities

Subordinated notes

Floating rate notes issue

Dividends paid net of dividend reinvestment plan

Net cash flows from/(used in) financing activities

Net increase/(decrease) in cash held

Cash at beginning of financial year

Closing cash carried forward

The accompanying notes form part of these financial statements.

 (2,943)

 – 

 (2,240)

 (5,183)

 50 

 – 

 (2,060)

 66 

 99,871 

 (10,610)

 87,317 

 8,563 

 119,215 

 127,778 

 (4,343)

 4,765 

 (700)

 (278)

 62 

 – 

 (1,669)

 15,097 

 99,709 

 (24,588)

 88,611 

 38,949 

 80,266 

 119,215

2.6

4.1

58

MyState LimitedAnnual Report 2023Notes to the consolidated financial statements
for the year ended 30 June 2023

1.1  Reporting entity
MyState Limited (the Company) is incorporated and domiciled in Australia and is a company limited by shares that are 
publicly traded on the Australian Securities Exchange. The address of its registered office and principal place of business is 
137 Harrington Street, Hobart, Tasmania 7000. The consolidated financial statements of MyState Limited and its subsidiaries 
(the Group) were authorised for issue by the Directors on 18 August 2023.

1.2  Basis of accounting
These consolidated financial statements are general purpose financial statements which have been prepared in accordance 
with the Corporations Act 2001, Australian Accounting Standards and Interpretations, and other requirements of the law. 
The financial report complies with Australian equivalents to International Financial Reporting Standards (‘AIFRS’). 

The financial statements comprise the consolidated financial statements of the Group. For the purpose of preparing the 
consolidated financial statements, the Company is a for-profit entity.

Where necessary, comparative figures have been re-classified and re-positioned for consistency with current period disclosures.

The consolidated financial statements have been prepared on the basis of historical cost, except for certain properties and 
financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained 
in the accounting policies.

Rounding of amounts
The Company is a company of the kind referred to in Australian Securities and Investments Commission (ASIC) Class Order 
2016/191, and, in accordance with that Class Order, amounts in the financial report are rounded off to the nearest thousand 
dollars, unless otherwise indicated. All amounts are presented in Australian dollars.

1.3  Use of estimates and judgement
The preparation of the financial report in conformity with Australian Accounting Standards requires the use of certain critical 
accounting estimates. It also requires management to exercise judgement in the process of applying the accounting policies. 
The notes to the financial statements set out areas involving a higher degree of judgement or complexity, or areas where 
assumptions are significant to the financial report such as:

•  loan origination cost amortisation, refer note 2.1;

•  impairment losses on loans and advances, refer note 4.3;

•  fair value of financial instruments, refer note 4.7;

•  impairment assessment of intangibles and goodwill, refer note 5.2; 

•  recoverability of deferred tax assets, refer note 6.1; and

•  assessment of lease liabilities and right-of-use assets, refer notes 4.6 and 5.1.

1.4  Provisions (other than for impairment of financial assets)
Provisions are recognised when the Group has a legal, equitable or constructive obligation to make a future sacrifice of economic 
benefits to other entities as a result of past transactions or other past events and it is probable that a future sacrifice of 
economic benefits will be required and a reliable estimate can be made of the amount of the obligation.

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59

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

2.1  Net banking operating income

Interest income

Loans and advances

Investment securities

Swap interest1

Total interest income

Interest expense

At call deposits

Fixed term deposits

Floating rate notes

Financing cost – leases

Swap interest2

Total interest expense

Non-interest income from banking activities

Transaction fees

Loan fees

Banking commissions

Other banking operations income 

Total non-interest income from banking activities

30 June 2023  
$‘000

30 June 2022  
$‘000

 318,169 

 30,989 

 3,813 

 156,130 

 4,513 

 (894)

 352,971 

 159,749 

 60,633 

 151,629 

 8,648 

 781 

 (1,313)

 16,972 

 30,379 

 1,003 

 918 

 232 

 220,378 

 49,504 

 3,367 

 5,580 

 3,120 

 1,410 

 13,477 

 3,703 

 6,284 

 3,282 

 1,834 

 15,103 

1.  Swap interest relates to hedges that the Group has entered into to protect its portfolio of loans and advances from changes in interest rates.

2.  Swap interest relates to hedges that the Group has entered into to protect its portfolio of term deposits from changes in interest rates.

Income accounting policy

Income is recognised to the extent that it is probable that the economic benefits will flow to the entity and the income 
can be reliably measured. The following specific recognition criteria must also be met before income is recognised.

Interest

Interest income is accrued using the effective interest rate method, which is the rate that exactly discounts estimated 
future cash receipts through the expected life of the financial instrument. Loan origination fees are recognised as 
components of the calculation of the effective interest rate method in relation to originated loans, and therefore affect 
the interest recognised in relation to this portfolio of loans. The average life of loans in the relevant loan portfolios is 
reviewed annually to ensure the amortisation methodology for loan origination fees is appropriate.

Interest expense is calculated on an accruals basis using the effective interest rate method. The effective interest 
rate method is the rate that exactly discounts future payments through the expected life of the financial instrument.

Non-interest income from banking activities

Refer to the ”income accounting policy” in note 2.2.

60

MyState LimitedAnnual Report 20232.2  Income from wealth management activities

Funds management income

Other fees and commissions

Total income from wealth management activities

30 June 2023  
$‘000

30 June 2022  
$‘000

8,798 

5,510 

14,308 

 9,078 

 5,742 

 14,820 

Funds management income and fiduciary activities
TPT Wealth Limited, a controlled entity of the Group, acts as Responsible Entity, Trustee and Funds Manager for eight managed 
investment schemes. The investment schemes place monies with external wholesale fund managers, direct mortgages 
and mortgaged backed securities, term deposits and other investments. The clients include individuals, superannuation funds 
and corporate investors.

The assets and liabilities of these funds are not included in the consolidated financial statements. Income earned by the Group in 
respect of these activities is included in the Consolidated Income Statement of the Group as “Funds management income”.

The following table shows the balance of the unconsolidated funds under management and funds under advice that gives rise 
to funds management and other fees and commissions income respectively:

Funds under management

Funds under advice

30 June 2023  
$m

30 June 2022  
$m

 994 

 490 

 1,062 

 434 

Other fees and commissions
TPT Wealth Limited provides private client tax accounting services and acts as Trustee and executor of estates. “Other fees 
and commissions income” is the income earned from these activities.

Income accounting policy

The Group earns three main types of fees and commissions under contracts with customers. The first income type is 
single performance obligation contracts, such as transaction services, where the performance obligation is performed and 
consideration received in quick succession. Income from these contracts is recorded as the performance obligations are 
satisfied. The second income type is where contracts with the customer are for the performance of multiple obligations 
over time and the customer only benefits from delivery of all those obligations together over time, for example the provision 
of trustee services and services to funds under management. For these contracts, income is recognised over the service 
period. The third type of income is insurance intermediary income where the performance obligations are satisfied 
substantially at the time of referring the customer and economic benefits flow to the Group over time. The Group 
has estimated that nil income will be brought forward as a contract asset under these contracts due to the insufficient 
probability of the timing and amount of future income that will flow from these contracts. This income is therefore 
recorded when received.

2.3  Income from other activities

Gain on revaluation of non-current assets held for sale

Gain on disposal of non-current assets held for sale

Total income from other activities

30 June 2023  
$‘000

30 June 2022  
$‘000

 – 

 – 

 – 

 530 

 324 

 854 

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61

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

2.4  Expenses
The following items are included within each item of specified expenses:

Occupancy costs include:

Operating lease payments 

Depreciation – right-of-use lease assets 

Depreciation – buildings and leasehold improvements 

Technology costs include:

 Amortisation – computer software 

Administration costs include:

30 June 2023  
$‘000

30 June 2022  
$‘000

453 

2,662 

209 

 185 

 2,728 

 281 

3,866 

 5,625 

Depreciation – furniture, equipment and computer hardware 

336 

 282 

The Group’s leasing activities
(i)  Real estate leases

The Group leases land and buildings for its office space and branch network. The leases of office space and branches typically 
run for a period of between three and 10 years. Some leases include an option to renew the lease for an additional period of 
the same duration after the end of the contract term.

(ii)   Other leases

The Group leases vehicles, with lease terms of three to five years. In some cases, the Group has options to purchase the assets at 
the end of the contract term; in other cases, it guarantees the residual value of the leased assets at the end of the contract term.

There are no other covenants or restrictions on the Group’s leases other than those identified above.

Amount recognised in the Consolidated Income Statement

Expenses relating to short-term leases and low-value leases 

70 

 101 

30 June 2023  
$‘000

30 June 2022  
$‘000

Expense accounting policy

Depreciation and amortisation expense

The Group adopts the straight line method of depreciating property, plant and equipment and amortising intangible 
assets over the estimated useful lives, commencing from the time the asset is held ready for use. Leasehold improvements 
and right-of-use assets are depreciated over the shorter of either the unexpired expected term of the lease or the estimated 
useful life of the improvements. Estimated useful lives are:

Buildings 

 40 years

Office furniture, fittings and equipment 

 4-7 years

Building fit-out 

Computer hardware 

Software 

Right-of-use assets 

 4-15 years

 3 years

 3-10 years

 2-15 years

Each year the useful life of assets are evaluated. The remaining useful life of select core banking systems was revised 
and extended in the prior year as the Group has implemented significant increased functionality and, in turn, longevity 
of these systems over their initial capacity. The revised remaining useful life is within the above-stated parameters; 
however, the total life since original core system implementation is in excess of the above-stated lives in some instances.

62

MyState LimitedAnnual Report 20232.5  Earnings per share

Basic earnings per share

Diluted earnings per share

Reconciliation of earnings used in calculation of earnings per ordinary share

Net profit after tax

Total statutory earnings

30 June 2023  
cents

30 June 2022  
cents

35.45

30.85

$ ‘000

38,502 

 38,502 

 30.34 

 30.15 

$ ‘000

 32,026 

 32,026 

Earnings used in calculating statutory earnings per ordinary share

38,502 

 32,026 

Add back: distributions accrued and/or paid on dilutive loan capital instrument

Total diluted earnings

4,136 

 42,638 

 – 

 32,026 

Earnings per share accounting policy

Basic earnings per share is calculated by dividing the Group’s profit attributable to ordinary equity holders by the 
weighted average number of ordinary shares outstanding during the financial year. Diluted earnings per share is 
calculated by dividing the Group’s profit attributable to ordinary equity holders by the weighted average number of 
ordinary shares that would be issued on the exchange of all the dilutive potential ordinary shares into ordinary shares.

The following table details the weighted average number of shares (WANOS) used in the calculation of basic and diluted 
earnings per share: 

WANOS used in the calculation of basic earnings per share

Effect of dilution – executive performance rights

Effect of dilution – loan capital instrument

WANOS used in the calculation of diluted earnings per share

Potentially dilutive instruments
The following instruments are potentially dilutive during the reporting period.

 Number 

 Number 

 108,615,478 

 105,570,983 

 875,663 

 652,267 

28,697,572 

 – 

138,188,713 

 106,223,250 

Dilutive instruments

30 June 2023 30 June 2022

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Loan capital instrument

Executive performance rights

Subordinated note (with non viability clause)

Yes

Yes

No

n/a

Yes

No

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63

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

2.6  Dividends

Dividends paid

2021 Final dividend paid – 13.0 cents per share

2022 Interim dividend paid – 12.5 cents per share

2022 Final dividend paid – 11.5 cents per share

2023 Interim dividend paid – 11.5 cents per share

Total dividends paid

Date of payment

30 June 2023  
$‘000

30 June 2022  
$‘000

21 Sep 2021

15 Mar 2022

7 Sep 2022

21 Mar 2023

 – 

 – 

12,179 

12,541 

24,720 

 13,686 

 13,188 

 – 

 – 

 26,874 

The dividends paid during the year were fully franked at the 30% corporate tax rate.

30 June 2023  
$‘000

30 June 2022  
$‘000

Franking credit balance

The amount of franking credits available for the subsequent financial year are:

Franking account balance as at the end of the period at 30%

92,199 

 82,170 

Franking credits that will arise from the payment of income tax payable  
at the end of the period

 1,075 

 (638)

2.7  Segment financial information

Operations of reportable segments
The Group has identified two operating divisions and a corporate division, which are its reportable segments. These divisions 
offer different products and services and are managed separately. The Group’s management committee reviews internal 
management reports for each of these divisions at least monthly. 

Banking division
The Banking division’s product offerings include lending; encompassing home loans, personal, overdraft, line of credit 
and commercial products, transactional savings accounts and fixed term deposits and insurance products. It delivers these 
products and services through its branch network, digital channels and third party channels. The Banking division comprises 
the MyState Bank Limited Group. 

Wealth Management division
The Wealth Management division is a provider of funds management and trustee services. It operates predominantly 
within Tasmania. It holds $0.994 billion (2022: $1.062 billion) in funds under management on behalf of personal, business and 
wholesale investors as the responsible entity for eight managed investment schemes. The Wealth Management division comprises 
TPT Wealth Limited, which is a trustee company licensed within the meaning of Chapter 5D of the Corporations Act 2001 and 
is the only private trustee company with significant operations in Tasmania. 

Corporate and consolidation division
The corporate division is responsible for the governance of the Group. The corporate division charges the operating divisions 
on a cost recovery basis for costs it has incurred. This division is also where eliminations are allocated between the Banking 
division and the Wealth Management division.

64

MyState LimitedAnnual Report 2023Year ended 30 June 2023

Interest income

Interest expense

Other income

Transaction fees 

Loan fee income

Banking commissions 

Other banking operations income 

Funds management income 

Other Wealth management fees and commissions 

Total operating income 

Expenses

Personnel costs 

Administration costs 

Technology costs 

Occupancy costs 

Marketing costs 

Governance costs 

Impairment expense/(recovery) 

(Gain)/Loss on disposal of non-current assets 

Income tax expense 

Segment profit for the year 

Segment balance sheet information

Segment assets 

Segment liabilities 

Year ended 30 June 2022

Interest income 

Interest expense 

Other income

Transaction fees 

Loan fee income

Banking commissions 

Other banking operations income

Funds management income 

Other Wealth management fees and commissions 

Total operating income 

Expenses

Personnel costs 

Administration costs 

Technology costs 

Occupancy costs 

Marketing costs 

Governance costs 

Impairment expense/(recovery) 

(Gain)/loss on disposal of non-current assets 

Income tax expense 

Segment profit for the year 

Segment balance sheet information

Segment assets 

Segment liabilities 

Banking  
$’000

 Wealth 
management  
$’000

Corporate and 
consolidation 
$’000

Total  
$’000

 352,801 

 (220,365)

3,367 

5,580 

3,120 

 1,408 

– 

– 

145,911 

32,515 

24,093 

17,507 

3,949 

9,784 

886 

2,542 

– 

16,426 

38,209 

 125 

 (1)

 – 

 – 

 – 

 2 

 8,798 

 5,510 

 14,434 

 7,221 

 4,281 

 1,533 

 126 

 440 

 285 

 – 

 – 

 175 

 373 

 45 

 (12)

 352,971 

 (220,378)

 – 

 – 

 – 

 – 

 – 

 – 

 3,367 

 5,580 

 3,120 

 1,410 

 8,798 

 5,510 

 33 

 160,378 

 4,590 

 (6,946)

 44 

 317 

 9 

 2,017 

 – 

 – 

 82 

 (80)

 44,326 

 21,428 

 19,084 

 4,392 

 10,233 

 3,188 

 2,542 

 – 

 16,683 

 38,502 

9,037,452 

8,651,513 

 26,835 

 2,060 

 59,996 

 9,124,283 

 13,147 

 8,666,720 

159,721 

(49,495)

3,703 

6,284 

3,282 

1,834 

– 

– 

125,329 

31,514 

22,147 

16,136 

3,917 

9,782 

752 

(755)

(854)

12,852 

29,838 

 22 

 (2)

 – 

 – 

 – 

 – 

 9,078 

 5,742 

 14,840 

 6,723 

 2,633 

 1,577 

 95 

 420 

 189 

 (7)

 – 

 967 

 2,243 

 6 

 (7)

 – 

 – 

 – 

 – 

 – 

 – 

 (1)

 4,604 

 (7,021)

 (7)

 282 

 95 

 2,044 

 – 

 – 

 57 

 (55)

 159,749 

 (49,504)

 3,703 

 6,284 

 3,282 

 1,834 

 9,078 

 5,742 

 140,168 

 42,841 

 17,759 

 17,706 

 4,294 

 10,297 

 2,985 

 (762)

 (854)

 13,876 

 32,026 

7,995,029 

7,637,791 

 25,821 

 1,721 

 58,997 

 10,422 

 8,079,847 

 7,649,934

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65

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

3.1  Capital management strategy
The Group’s capital management strategy is to adhere to regulatory requirements and maximise shareholder value through 
optimising the level and use of capital resources, whilst also providing the flexibility to take advantage of opportunities as they 
may arise. 

The Group’s capital management objectives are to:

•  comply with internal and regulatory capital requirements;

•  ensure sufficient capital resource is available to support the Group’s business, operational and investment activities;

•  maintain balance sheet resilience to safeguard the Group’s ability to continue as a going concern; and

•  support MyState Limited’s and MyState Bank Limited’s credit rating.

The Group’s capital management policy considers each of internal, regulatory and rating agency capital requirements. 
Under APS 110 Capital Adequacy, the ultimate responsibility for the prudent management of capital resides with the Board of 
Directors. The Board must ensure that an appropriate level and quality of capital is maintained, commensurate with the type, 
amount and concentration of risk exposures. 

The Group’s regulatory capital requirements are measured on a Level 1 and Level 2 basis.

Level 1 is comprised of MyState Bank Limited (the ADI) and ConQuest 2010-1R.

Level 2 is comprised of the wider MyState Limited prudential group. This group includes MyState Limited (the non-operating 
holding company), MyState Bank Limited, Connect Asset Management Limited (the Securitisation programme Manager) 
and ConQuest 2010-1R.

All entities that are consolidated for accounting purposes are included within the Level 2 regulatory capital calculation 
except for TPT Wealth Limited and securitisation special purposes vehicles (Conquest 2014-2 Trust (deregistered during year), 
Conquest 2016-1 Trust (deregistered during year), Conquest 2016-2 Trust, Conquest 2017-1 Trust, Conquest 2018-1 Trust, 
Conquest 2019-1 PP Trust, Conquest 2019-2 Trust, Conquest 2022-1 Trust and Conquest 2023-1 Warehouse Trust).

The Group has developed a detailed Internal Capital Adequacy Assessment Plan (ICAAP). This plan covers the capital 
requirements of the Group on a Level 1 and Level 2 basis (as previously described) as well as TPT Wealth Limited. The Group’s 
capital position is monitored on a frequent basis and is reported to the Board monthly. The ICAAP also includes a three-year 
forecast of capital adequacy, which is prepared and submitted to the Board at least annually.

The ICAAP aims to ensure that adequate planning activities take place so that the Group is effectively capitalised. The ICAAP 
encompasses known financial events, dividend policy, capital raisings, securitisation and stress testing.

66

MyState LimitedAnnual Report 2023The Board has currently set a minimum total capital adequacy ratio of 14.0% for the Group (2022: 12.5%). Capital adequacy 
of the Group on a Level 2 basis is detailed in the following table:

Qualifying capital

Common Equity Tier 1 capital

Paid-up ordinary share capital(i)

Retained earnings

Reserves excluding general reserve for credit losses

Total common Equity Tier 1 capital

Less: Regulatory adjustments

Deferred expenditure including deferred tax assets

Goodwill and intangibles

Other deductions

Total regulatory adjustments

Net Common Equity Tier 1 capital

Additional Tier 1 capital

Floating rate notes AT1 issuance(iii)

Tier 2 capital

Subordinated notes(ii)

Equity reserve for credit losses

Total capital

Risk weighted assets

Capital adequacy ratio

30 June 2023  
$‘000

30 June 2022  
$‘000

 227,306 

 237,611 

 (1,134)

 211,167 

 221,796 

 6,980 

 463,783 

 439,943 

 41,775 

 63,793 

 49,065 

 154,633 

 309,150 

 35,540 

 64,556 

 47,086 

 147,182 

 292,761 

 63,836 

 – 

 49,901 

 2,368 

 425,255 

 50,000 

 2,257 

 345,018 

 2,755,453 

 2,780,972 

15.43%

12.41%

(i) 

 On 24 June 2021, the Group raised $24.2 million (5,628,573 shares at $4.30 each) under a retail entitlement offer. This followed an institutional entitlement 
offer and fully underwritten institutional placement (Placement), which raised $11.3 million and $20 million respectively (7,274,502 ordinary shares at  
$4.30 each) from existing and new institutional investors, on 2 June 2021. 

(ii)   On 10 July 2020, the Group issued $25 million of floating rate subordinated notes (“notes”). The issuer was MyState Limited. The notes have a term 

of 10 years, maturing 10 July 2030, and pay interest quarterly at a floating rate equal to the three-month BBSW plus a margin of 4.35% per annum. 
The issuer has the option to redeem these notes on 10 July 2025 and each quarterly interest payment date thereafter, and for certain regulatory events 
(in each case subject to APRA’s prior written approval). On the same date, and with the same terms, MyState Bank Limited issued $25 million of floating 
rate subordinated notes to MyState Limited with terms identical to those issued by MyState Limited.

 On 3 November 2021, the Group issued $25 million of floating rate subordinated notes (“notes”). The issuer was MyState Limited. The notes have a 
term of 10 years, maturing 3 November 2031, and pay interest quarterly at a floating rate equal to the three-month BBSW plus a margin of 2.75% 
per annum. The issuer has the option to redeem these notes on 3 November 2026 and each quarterly interest payment date thereafter, and for certain 
regulatory events (in each case subject to APRA’s prior written approval). On the same date, and with the same terms, MyState Bank Limited issued $25 
million of floating rate subordinated notes to MyState Limited with terms identical to those issued by MyState Limited.

 If APRA notifies the issuer that a non-viability trigger event has occurred, the notes will be converted into ordinary shares of MyState Limited, or written 
off. For the notes issued on 3 November 2021, the amount included in the Group’s Level 2 Tier 2 regulatory capital is a percentage equal to that of the 
external interest in the Group’s regulatory capital. The amount included in the Group’s Level 1 Tier 2 regulatory capital is 100%. For the notes issued on 
10 July 2020, the amount included in the Group’s Level 1 and Level 2 Tier 2 regulatory capital is 100%. 

(iii)   On 30 August 2022, MyState Limited (MyState) issued $65 million of inaugural Additional Tier 1 notes to wholesale investors (Capital Notes). The Capital 
Notes (‘’notes”) were fully paid, mandatorily convertible subordinated perpetual debt securities of MyState. The issuer was MyState Limited. The notes 
have a term in perpetuity and pay interest quarterly at a floating rate equal to the three-month BBSW plus a margin of 5.50% per annum. The issuer has 
the option to redeem these notes on 30 August 2027, 30 November 2027 and 28 February 2028 respectively, and for certain regulatory events (in each 
case subject to APRA’s prior written approval). If APRA notifies the issuer that a loss-absorption event has occurred, the notes will be converted into ordinary 
shares of MyState Limited, or written off. 

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67

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

3.2  Financial risk management
Risk management is an integral part of the Group’s business processes. The Board sets policy to mitigate risks and ensure  
the risk management framework is appropriate, to direct the way in which the Group conducts business. Promulgated Board-
approved policies ensure compliance throughout the business, which are monitored by way of a dedicated compliance system. 
Risk management plans exist for all documented risks within the Group and these plans are reviewed regularly by the Executive 
Management Team, the Group Risk Committee and the Board. Business units are accountable for risks in their area and are 
responsible for ensuring the appropriate assessment and management of these risks.

Risk exposure profile

The Group actively monitors a range of risks, which are not limited to, but include the following:

•  credit risk,

•  market risk; and

•  liquidity risk.

3.2.1  Credit risk
Approach to credit risk management

Credit risk arises within the Group’s lending and treasury investment activities and is the risk that a counterparty may fail 
to complete its contractual obligations when they fall due.

The Group’s approach to managing this risk is to separate prudential control from operational management by assigning 
responsibility for approval of credit exposures to specific individuals and management committees. The Group Risk Committee 
has oversight of credit risk exposures and the Enterprise Risk Committee monitors credit-related activities through regular 
reporting processes, including monitoring large exposure to single groups and counterparties. The roles of funding and 
oversight of credit are separate.

Board-approved lending policies guide the processes for all loan approvals by subsidiary operations. All loans over a designated 
amount, whether within delegated limits or not, are reported to the Group Risk Committee on a regular basis. Any loan outside 
of delegated limits must be approved by the Board prior to funding.

Maximum exposure to credit risk

The amounts disclosed in the following table are the maximum exposure to credit risk, before taking account of any collateral 
held or other credit enhancements. For financial assets recognised in the Statement of Financial Position, the exposure to credit 
risk equals their carrying amount. For customer commitments, the maximum exposure to credit risk is the full amount of the 
committed facility as at the reporting date.

Cash and liquid assets

Due from other financial institutions

Other assets

Financial instruments

Loans and advances

Customer commitments(i)

Maximum exposure to credit risk

(i)  For further information regarding these commitments, refer to note 8.1.

30 June 2023  
$‘000

30 June 2022  
$‘000

 127,778 

 48,003 

 12,085 

 119,215 

 40,924 

 9,831 

 936,880 

 842,926 

 1,124,746 

 1,012,896 

 7,908,080 

 6,971,375 

 147,912 

 268,364 

 9,180,738 

 8,252,635 

68

MyState LimitedAnnual Report 2023The credit quality of financial assets has been determined based on Standard & Poor’s credit ratings for financial assets other 
than loans and advances at amortised cost. For loans and advances at amortised cost, the assets identified as being “closely 
monitored” are those assets that are greater than 30 days past due. New facilities are loans that have been funded within the 
financial year.

Credit quality of financial assets

Financial assets other than loans and advances at amortised cost

Equivalent S&P rating A+ and above

Equivalent S&P rating A and below

Loans and advances at amortised cost

New facilities – not closely monitored

New facilities – closely monitored

Continuing facilities – not closely monitored

Continuing facilities – closely monitored

Total on balance sheet exposure to credit risk

Loans and advances at amortised cost past due analysis

Not past due 

Past due days:

31 to 60 days

61 to 90 days

More than 90 days

Total loans and advances at amortised cost

Estimate of collateral held against past due assets

30 June 2023  
$‘000

30 June 2022  
$‘000

 914,400 

 210,346 

 622,183 

 390,713 

 2,589,507 

 2,860,403 

 7,983 

 1,372 

 5,260,343 

 4,085,757 

 50,247 

 23,843 

 9,032,826 

 7,984,271 

 7,862,948 

 6,942,215 

 16,059 

 11,476 

 17,597 

 8,285 

 7,166 

 13,709 

 7,908,080 

 6,971,375 

 51,194 

 39,730 

Estimate of collateral held

To mitigate credit risk, MyState Bank Limited (ADI) holds collateral against select loans and advances in the form of 
a mortgage charge over property. The bank can take possession of the security held against the loans and advances as 
a result of customer default. The collateral shown above is an estimate of the value of collateral held, it is not practicable 
to determine the fair value.

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69

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

3.2  Financial risk management continued
Credit quality is impacted by concentration risk created by the ensuing vulnerability of assets to similar conditions such 
as economic or political factors. The Group monitors the geographical diversification of its loans and advances. An analysis 
of this concentration of credit risk at the reporting date is shown in the following table:

Tasmania

Victoria

New South Wales

Queensland

Western Australia

Australian Capital Territory

South Australia

Northern Territory

Gross loans and advances at amortised cost

There are no loans that individually represent 10% or more of shareholders’ equity.

3.2.2  Market risk
Managing market risk

30 June 2023  
$‘000

30 June 2022  
$‘000

 2,533,845 

 2,510,364 

 1,789,071 

 1,356,804 

 1,648,836 

 1,414,717 

 1,559,328 

 1,415,876 

 181,467 

 125,683 

 83,175 

 99,602 

 19,810 

 68,109 

 71,510 

 12,769 

 7,915,134 

 6,975,832 

Market risk is the exposure to adverse changes in the value of the Group’s portfolio as a result of changes in market prices 
or volatility. The Group is exposed primarily to interest rate risk.

Interest rate risk exposure

The operations of MyState Bank are subject to the risk of interest rate fluctuations as a result of mismatches in the timing 
of the repricing of interest rates on its assets and liabilities. 

Value at Risk (VaR)

The following table indicates the VaR based on historical data. The Group estimates VaR as the potential loss in earnings 
from adverse market movements over a 20-day holding period to a 99% confidence level. Market risks attributable to trading 
activities are primarily measured using a historical simulation Value-at-Risk (VaR) model based on historical data. VaR takes 
account of all material market variables that may cause a change in the value of the loan portfolio. As an additional overlay 
to VaR, the individual market risks of interest rate, foreign exchange, credit and equity are managed using a framework that 
includes stress testing, scenario analysis, sensitivity analysis and stop losses. Risks are monitored and measured against limits 
delegated by the Asset Liability Committee (ALCO) and approved by the Group’s Risk Committee. Although an important tool 
for the measurement of market risk, the assumptions underlying the model are limited to reliance on historical data.

Value at risk (post-tax) based on historic data

Average

Minimum

Maximum

30 June 2023  
$‘000

30 June 2022  
$‘000

 4,440 

 2,059 

 7,964 

 4,084 

 3,286 

 4,878 

70

MyState LimitedAnnual Report 2023p
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Derivatives

The Group is exposed to changes in interest rates. The only derivative instruments currently entered into by the Group are 
interest rate swaps. The Group protects its portfolio of fixed rate loans, corporate and retail term deposits, NCDs and exposure 
to variable rate debt obligations by paying fixed or variable rates to swap providers and receiving fixed or variable rates 
in return, dependent on the hedged item. The hedge instruments are benchmarked to either BBSW (Bank Bill Swap rate) 
or AONIA (RBA Interbank Overnight Cash Rate). The hedging strategy will assist with managing interest rate margins in an 
increasing interest rate environment and reduce earnings volatility, all else equal. The hedge reduces net interest margin 
volatility on MyState’s variable interest rate loans by matching the repricing frequency of assets and liabilities.

Derivatives accounting policy

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and subsequently remeasured 
to their fair value. Fair values are obtained from quoted market prices in active markets. Movements in the carrying 
amounts of derivatives are recognised in the Consolidated Income Statement, unless the derivative meets the requirements 
for hedge accounting.

The Group documents the relationship between the hedging instruments and hedged items at inception of the transaction, 
as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also 
documents its assessment of whether the derivatives used in hedging transactions have been, or will continue to be, 
highly effective in offsetting changes in the fair values or cash flows of hedged items. This assessment is carried out both 
at inception and on a monthly basis.

Cash flow hedges

The Group has cash flow hedges that are used to hedge the variability of interest rates in relation to certain assets and 
liabilities. These derivative instruments are established with terms that exactly match the terms of the asset or liability 
designated as the hedged item and therefore form highly effective relationships. The portion of the asset or liability 
designated in the hedging relationship is determined by reference to specific fixed rate assets or liabilities within the 
deposit or loan portfolio. The Group conducts tests for ineffectiveness and sources of ineffectiveness are limited to 
credit risk of parties to the relationship. The variability in fair values attributable to an item designated as a cash flow 
hedge is recognised in Other Comprehensive Income to the extent of the hedge’s effectiveness. Any ineffective portion 
of the change in the fair value of a derivative is recognised immediately in the Consolidated Income Statement.

Derivatives that do not qualify for hedge accounting

If a derivative expires or is sold, terminated or exercised, or no longer meets the criteria for hedge accounting, or the 
designation is revoked, then hedge accounting is discontinued and the amount recognised in Other Comprehensive Income 
remains in Other Comprehensive Income until the forecast transaction affects the Consolidated Income Statement. 
If the forecast transaction is no longer expected to occur, it is reclassified to the Consolidated Income Statement 
as a reclassification adjustment.

When a derivative is not designated in a qualifying relationship, all changes in its fair value are recognised immediately in 
the Consolidated Income Statement, as a component of net income from other financial instruments carried at fair value.

The following table indicates the Group’s hedge exposures at 30 June 2023.

Description

Notional amount of hedging instrument(i)

Carrying amount of hedging instrument(i)

The following table indicates the Group’s hedge exposures at 30 June 2022.

Description

Notional amount of hedging instrument(i)

Carrying amount of hedging instrument(i)

(i)  Note that derivatives are reported as financial instruments in the Statement of Financial Position.

Cash flow 
hedges  
$‘000

 1,243,290 

 8,728 

Fair value 
hedges  
$‘000

 – 

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$‘000

 577,129 

 9,534 

Fair value 
hedges  
$‘000

 – 

 – 

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71

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

3.2  Financial risk management continued

3.2.3  Liquidity risk
Managing liquidity risk

Liquidity risk is the risk that the Group is unable to meet its financial and statutory obligations as they fall due, which could 
arise due to mismatches in cash flows.

The Group maintains a portfolio of highly marketable assets that can be liquidated in the event of an unforeseen interruption 
of cash flows. The Group also has committed lines of credit that it can access to meet its liquidity needs. Liquidity scenarios 
are calculated under stressed and normal operating conditions, to assist in anticipating cash requirements providing  
adequate reserves.

The Group’s objective is to manage its funds in a way that will facilitate growth in core business under a wide range of market 
conditions. The Group maintains, and adheres to, a Liquidity Risk Management framework (LRMF). This process includes 
acknowledgement of liquidity risks within the Group and justification of the amount of liquidity that is being held based on 
the liquidity risk profile of the organisation.

Group Treasury is responsible for implementing liquidity risk management strategies in accordance with the LRMF. The Group’s 
Assets and Liabilities Committee (ALCO) assists the Board with oversight of asset and liability management including liquidity 
risk management. The Group’s liquidity policies are approved by the Board after endorsement by the Group Risk Committee 
and the Banking Group’s ALCO.

On 19 March 2020, the Reserve Bank of Australia (RBA) established a Term Funding Facility (TFF) that offered ADI’s three-year 
funding at a rate of 0.25% per annum to support the Australian economy through COVID-19. MyState Bank Limited, the Group’s 
ADI, was granted an allowance of $109.0m which was fully drawn ahead of the 30 September 2020 deadline.

On 1 September 2020, the RBA announced changes to the TFF, including a Supplementary Allowance that provided ADI’s 
additional three-year funding at a rate of 0.10%. MyState Bank Limited was granted an allowance of $75.7m which was fully 
drawn ahead of the 30 June 2021 deadline.

The combined drawn amount as at the reporting date of $154.7m is reported separately in note 4.5. At 30 June 2023, funding 
under the TFF has been secured by $183.7m of eligible asset backed self-securitisation. The funding was drawn down progressively 
and will therefore be able to be repaid progressively at the end of each respective three-year term, which commenced in May 
2023 and will end in June 2024.

72

MyState LimitedAnnual Report 2023p
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Liquidity risk exposure

The Group is exposed to liquidity risk primarily through its banking activities. The Group’s contractual cash flows associated 
with its financial liabilities and hedging derivatives within relevant maturity groupings is as follows. These are presented on an 
undiscounted basis and, therefore, will not agree to amounts presented on the Consolidated Statement of Financial Position 
as they incorporate principal and associated future interest payments.

On demand  
$‘000

< 3 months 
$‘000

3 months 
to 1 year 
$‘000

1 year 
to 5 years 
$‘000

 > 5 years 
$‘000

Total 
$‘000

2023

At call deposits

 3,380,217 

 – 

At call deposits

 3,413,960 

 – 

Due to other financial 
institutions

Term deposits

Term funding facility

Negotiable certificates 
of deposit

Subordinated notes

Floating rate notes

Securitisation liabilities

Additional Tier 1 Hybrid 
capital instrument 

Contractual 
amounts payable

Derivative liability

2022

Due to other 
financial institutions

Term deposits

Term funding facility

Negotiable certificates 
of deposit

Subordinated notes

Floating rate notes

Securitisation liabilities

Additional Tier 1 Hybrid 
capital instrument

Contractual 
amounts payable

Derivative liability

 3,380,217 

 695,420 

 2,782,998 

 1,882,786 

 57,514 

 8,798,935 

 – 

 259 

 2,405 

 10,898 

 14,621 

 57,514 

 75,790 

 – 

 – 

 – 

 – 

 66,295 

 70,225 

 2,378,555 

 432,306 

 79,633 

 75,874 

 377,419 

 914 

 3,275 

 17,325 

 2,741 

 9,826 

 – 

 – 

 261,647 

 96,538 

 295,315 

 1,099,499 

 1,121 

 3,362 

 74,713 

 – 

 – 

 22,982 

 789,825 

 1,219,829 

 – 

 30,214 

 342,481 

 174,805 

 664 

 924 

 1,991 

 2,771 

 92,557 

 277,672 

 – 

 – 

 183,770 

 155,507 

 – 

 10,619 

 152,163 

 794,187 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 3,380,217 

 – 

 – 

 – 

 – 

 66,295 

 2,881,086 

 155,507 

 394,744 

 – 

 – 

 – 

 274,748 

 1,491,352 

 79,196 

 – 

 – 

 – 

 – 

 – 

 – 

 58,148 

 – 

 – 

 – 

 13,563 

 3,413,960 

 22,982 

 2,193,424 

 185,721 

 517,286 

 71,422 

 155,858 

 1,164,416 

 – 

 3,413,960 

 1,249,433 

 1,707,282 

 1,296,246 

 58,148 

 7,725,069 

 – 

 186 

 5,096 

 18,009 

 – 

 23,291 

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73

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

3.2  Financial risk management continued

Contractual maturity of assets and liabilities

The contractual maturities of the Group’s financial assets and liabilities as at the reporting date are contained in the following 
table. The Group expects that certain assets and liabilities will be recovered or settled at maturities which are different to their 
contractual maturities.

30 June 2023

30 June 2022

< 12 months  
$‘000

 > 12 months  
$‘000

Total  
$‘000

< 12 months  
$‘000

> 12 months  
$‘000

Total  
$‘000

Financial assets

Cash and liquid assets

 127,778

Due from other financial 
institutions

Other assets

 48,003

 12,085

 –

 –

 –

 127,778

 119,215

 48,003

 12,085

 40,924

 9,831

 –

 –

 –

 119,215

 40,924

 9,831

Financial instruments

 194,676

 742,204

 936,880

 381,929

 460,997

 842,926

Loans and advances(i)

 62,808

 7,845,272

 7,908,080

 73,160

 6,898,215

 6,971,375

Total financial assets

 445,350 

 8,587,476

 9,032,826

 625,059

 7,359,212

 7,984,271

Financial liabilities

Due to other financial 
institutions

Other liabilities

Deposits

 (66,295)

 (18,111)

 –

 –

 (66,295)

 (18,111)

 (22,982)

 (17,213)

 –

 –

 (22,982)

 (17,213)

 (5,777,052)

 (876,928)

 (6,653,980)

 (5,982,929)

 (140,918)

 (6,123,847)

Term funding facility

 (79,040)

 (75,660)

 (154,700)

 (30,000)

 (154,700)

 (184,700)

Subordinated notes

Floating rate notes

 – 

 – 

 (49,824)

 (49,824)

 (249,556)

 (249,556)

 – 

 – 

 (49,758)

 (49,758)

 (149,685)

 (149,685)

Securitisation liabilities

 (350,190)

 (1,046,100)

 (1,396,290)

 (273,421)

 (816,773)

 (1,090,194)

Additional Tier 1 Hybrid 
capital instrument 

 – 

 (63,835)

 (63,835)

 –

 –

 –

Total financial liabilities

 (6,290,688)

 (2,361,903)

 (8,652,591)

 (6,326,545)

 (1,311,834)

 (7,638,379)

Net contractual amounts 
receivable/(payable)

 (5,845,338)

 6,225,573 

 380,235 

 (5,701,486)

 6,047,378 

 345,892 

(i)  Contractual recovery is subject to evolving regulatory and industry support for counterparties requesting such support, as at the reporting date, the primary 

support provided to borrowers is repayment deferral periods.

74

MyState LimitedAnnual Report 20233.3  Average balance sheet and sources of net interest income
The following table shows the major categories of interest-earning assets and interest-bearing liabilities, together with their 
respective interest earned or paid by the Group and the average interest rates. Averages are calculated based on the balance 
at each month end. 

30 June 2023

30 June 2022

Average 
balance  
$‘000

Interest  
$‘000

Average 
rate  
%

Average 
balance  
$‘000

Interest  
$‘000

Average  
rate  
%

Average assets 
and interest income

Interest-earning assets

Cash and liquid assets

 140,274 

 312 

Financial instruments

 890,124 

 30,676 

Loans and advances(i)

 7,203,932 

 321,982 

0.22%

3.45%

4.47%

 109,206 

 739,889 

 26 

 4,487 

 5,933,925 

 155,236 

Total average  
interest-earning assets

 8,234,330 

 352,970 

4.29%

 6,783,020 

 159,749 

Non-interest earning assets

 148,048 

 – 

 – 

 142,541 

 – 

Total average assets

 8,382,378 

 352,970 

4.21%

 6,925,561 

 159,749 

Average liabilities 
and interest expense

Interest-bearing liabilities

Deposits and derivatives

 6,799,811 

 156,449 

Notes and bonds on issue

 1,460,606 

 63,927 

2.30%

4.38%

 5,588,647 

 1,146,984 

 31,184 

 16,822 

Total average  
interest-bearing liabilities

 8,260,417 

 220,376 

2.67%

 6,735,631 

 48,006 

Non-interest bearing liabilities

 66,928 

 – 

 – 

 36,982 

 – 

Total average liabilities

 8,327,345 

 220,376 

2.65%

 6,772,613 

 48,006 

Reserves

 423,242 

 – 

 – 

 397,433 

 – 

0.02%

0.61%

2.62%

2.36%

 – 

2.31%

0.56%

1.47%

0.71%

 – 

0.71%

 – 

Total average liabilities 
and reserves

 8,750,587 

 220,376 

2.52%

 7,170,046 

 48,006 

0.67%

(i)  The offset account average balance included in Loans and advances is $295.861 million (2022: $262.919 million).

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75

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

4.1  Cash and liquid assets

Notes, coins and cash at bank

Other short-term liquid assets

Total cash and liquid assets

30 June 2023  
$‘000

30 June 22  
$‘000

123,138 

4,640 

127,778 

 114,570 

 4,645 

 119,215 

Reconciliation of profit for the year to net cash provided by operating activities

Profit for the year

38,502 

 32,026 

Add/(less) items classified as investing/financing activities or non-cash items:

Depreciation of property, plant and equipment

Depreciation of right-of-use assets

Amortisation of intangible assets

Loss/(gain) on sale of non-current assets

Bad and doubtful debts expense net of recoveries

Share-based payment

Tax movement within reserves

Changes in assets and liabilities:

Decrease/(increase) in due from other financial institutions

Decrease/(increase) in loans and advances

Decrease/(increase) in financial instruments

Decrease/(increase) in other assets

Decrease/(increase) in deferred tax assets

Increase/(decrease) in due to other financial institutions

Increase/(decrease) in deposits and other borrowings

Increase/(decrease) in employee benefits provisions

Increase/(decrease) in tax liabilities

Net cash flows used in operating activities

Cash and liquid assets accounting policies

Cash and liquid assets

545 

4,980 

3,866 

 – 

2,542 

287 

 (564)

 563 

 2,728 

 5,625 

 (854)

 (762)

 227 

 (2,990)

 (7,079)

 (9,065)

 (939,247)

 (1,363,313)

 (94,778)

 (125,795)

 (2,254)

 (664)

46,271 

 (548)

 3,617 

 2,059 

870,064 

 1,403,585 

 (240)

4,198 

 345 

 3,168 

 (73,571)

 (49,384)

Cash and liquid assets in the Consolidated Statement of Financial Position and for the purposes of the Consolidated 
Statement of Cash Flows comprise cash at bank and in hand and short-term deposits with an original maturity of less 
than three months, net of outstanding bank overdrafts. Cash flows arising from deposits, share capital, investments, 
loans to subsidiaries and investments in associates are presented on a net basis in the Statement of Cash Flows.

Cash flow statement

Cash flows arising from the following activities are presented on a net basis in the Statement of Cash Flows:

•  customer deposits and withdrawals from savings and fixed-term deposit accounts;

•  movements in investments;

•  amounts due to and from other financial institutions; 

•  customer loans and advances; and

•  dividends paid. 

Where operational income and expense accruals and prepayments are included in the above line items, the movements 
will differ between the Statement of Financial Position and the disclosure in this note.

76

MyState LimitedAnnual Report 20234.2  Financial instruments

Financial instruments at amortised cost

Negotiable certificates of deposits

Term deposits 

Floating rate notes 

Other deposits 

30 June 2023  
$‘000

30 June 2022  
$‘000

 156,832 

35,700 

734,962 

658 

 341,098 

 35,700 

 455,878 

 721 

Total financial instruments at amortised cost 

928,152 

 833,397 

Financial instruments at fair value

Derivatives 

Total financial instruments 

Financial instruments accounting policies

Financial instruments at amortised cost

8,728 

 9,529 

936,880 

 842,926 

Financial instruments at amortised cost are those non-derivative financial assets that the Group has acquired with the 
objective of holding in order to collect contractual cash flows. The contractual terms of the financial asset give rise on 
specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial instruments at fair value

Financial instruments other than those carried at amortised cost, are carried at their fair value at the reporting date. 
Note 4.7 contains information on how the Group determines fair values. Fair value gains and losses are recognised in 
comprehensive income until the derecognition date, at which point the net gains and losses are transferred to profit 
or loss for that instrument.

Derecognition of financial assets and liabilities

Financial assets are derecognised when the contractual rights to receive cash flows from the assets have expired, or 
where the Group has transferred its contractual rights to receive the cash flows of the financial assets and substantially 
all the risks and rewards of ownership. Financial liabilities are derecognised when they are extinguished, i.e. when the 
obligation is discharged, cancelled or expired.

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77

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

4.3  Loans and advances

Classification of loans and advances at amortised cost

Residential loans secured by mortgage

Personal loans and unsecured overdrafts 

Overdrafts secured by mortgage 

Commercial loans 

Total loans and advances at amortised cost 

Less:

Specific provision for impairment 

Collective provision for impairment 

30 June 2023  
$‘000

30 June 2022  
$‘000

 7,838,723 

 6,872,096 

9,249 

25,401 

41,761 

 20,238 

 31,846 

 51,652 

7,915,134 

 6,975,832 

171 

6,883 

 – 

 4,457 

Total loans and advances at amortised cost net of provision for impairment 

7,908,080 

 6,971,375 

Loans and advances at amortised cost accounting policy

Loans and other receivables that have fixed or determinable payments that are not quoted in an active market are 
classified as ”loans and advances”. Loans and advances are recognised on trade date and are measured at amortised 
cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective 
interest rate, except for short-term receivables when the effect of discounting is immaterial.

Provision for impairment

Specific provision for impairment

Opening balance 

Net specific provision funding 

Write-off of previously provisioned facilities 

Closing balance of specific provision for impairment 

Collective provision for impairment

Opening balance 

Net collective provision funding 

Write-off of previously provisioned facilities

Closing balance of collective provision for impairment 

Total balance of provision for impairment 

Charge to profit for impairment on loans and advances

Increase/(decrease) in specific provision for impairment 

Increase/(decrease) in collective provision for impairment 

Bad debts recovered 

Bad debts written off directly

Total impairment (recovery)/expense on loans and advances

78

30 June 2023  
$‘000

30 June 2022  
$‘000

– 

171 

– 

171 

4,457 

2,426 

 – 

6,883 

7,054 

171 

2,426 

(399)

 344 

 2,542 

 50 

 (50)

 – 

 – 

 5,368 

 (918)

 7 

 4,457 

 4,457 

 (50)

 (918)

 (539)

 745 

 (762)

MyState LimitedAnnual Report 2023Movements in provisions and reserve

Stage 1

Stage 2

Stage 3

12-month 
ECL  
$‘000

Lifetime 
ECL  
$‘000

Collectively 
assessed – 
lifetime  
ECL  
$‘000

Individually 
assessed – 
lifetime  
ECL  
$‘000

Subtotal 
(1)  
$‘000

General 
reserve 
for credit 
losses  
(2)  
$‘000

Grand total 
 (1) + (2)  
$‘000

Balance as at 1 July 2021

 2,550 

 807 

 1,888 

 50 

 5,295 

 2,488 

 7,783 

Transfers during the period to:

Increase/(decrease) 
in provisions

Total provision 
for doubtful debts 
as at 30 June 2023

Balance as at 1 July 2022

Transfers during the period to:

Increase/(decrease) 
in provisions

Total provision 
for doubtful debts 
as at 30 June 2022

 (433)

 72 

 (427)

 (50)

 (838)

 (231)

 (1,069)

 2,117 

 2,117 

 879 

 879 

 1,461 

 1,461 

 – 

 – 

 4,457 

 4,457 

 2,257 

 2,257 

 6,714 

 6,714 

 867 

 607 

 952 

 171 

 2,597 

 111 

 2,708 

 2,984 

 1,486 

 2,413 

 171 

 7,054 

 2,368 

 9,422 

The Group has undertaken a review of the expected credit loss (ECL) of its lending portfolios against relevant specific economic 
conditions under varying scenarios. The review considered the macroeconomic outlook, customer credit quality, the quality 
of collateral held and exposure at default as at the reporting date. These model inputs including forward-looking information 
have been revised in recognition that rising cash rates is a key driver of the estimates therein. The modelled ECL is sensitive to 
the current environment of high inflation and cost of living pressures, and the longevity of any monetary and fiscal intervention, 
as these influence both the probability of default and the value of collateral that may be utilised. Whilst the inputs have been 
revised, the underlying methodology for calculating the ECL is consistently applied in the current and comparative period as 
described in the Impairment of financial assets accounting policy presented below.

At 30 June 2023, this review includes forward looking economic assumptions using a scenario weighting of 40% base case, 
50% moderate recession and 10% strong recovery. The key assumptions used to determine the forward looking economic overlay 
were revised to incorporate the latest observed economic data, including a higher Official Cash Rate (OCR), increasing levels 
of unemployment and lower near term house price growth, with price falls under the moderate recession scenario of -15% and 
20% respectively across FY24 and FY25.

Given the uncertain economic outlook of the Australian and global economy, global geopolitical uncertainties still lingering, 
rising cost of living pressures and their repercussions on financial hardships, future economic conditions that result in outcomes 
that differ from the current estimate are possible and will be accounted for in future periods. 

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79

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

4.3  Loans and advances continued

Impairment of financial assets accounting policy

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are 
considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after 
the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. 
The primary source of credit risk for the Group arises on its loan portfolio. In relation to this portfolio, the Group 
maintains a specific provision and a collective provision.

Specific provisions for impairment are made against individual risk rated credit facilities where a loss is expected. 
The provisions are measured as the difference between a financial asset’s carrying amount and the expected future 
cash flows.

All other loans and advances that do not have an individually assessed provision are assessed collectively for impairment. 
The collective provisions are calculated using an Expected Credit Loss (ECL) model. This model is forward looking 
and does not require evidence of an actual loss event for impairment provisions to be recognised. 

The Group applies a three-stage approach to measuring the ECL based on credit risk since origination. The Group 
estimates ECL through modelling the probability of default, loss given default and exposure at default, as follows: 

Stage 1 – Performing – This category includes financial assets that have not experienced a significant increase in 
credit risk since their origination. For these financial assets an allowance equivalent to 12 months’ ECL is recognised, 
which represents the credit losses expected to arise from defaults occurring over the next 12 months.  

Stage 2 – Under-performing – This category includes financial assets that have experienced a significant increase 
in credit risk since their origination and are not credit impaired. For these financial assets an allowance equivalent 
to lifetime ECL is recognised. Lifetime ECL is the credit losses expected to arise from defaults occurring over the 
remaining life of the financial assets. 

Stage 3 – Non-performing (impaired) – This category includes financial assets that are credit impaired. The provision 
is also equivalent to the lifetime ECL. The difference to the provision calculated on stage 2 loans is that the stage 3 loan 
calculation is not discounted over a future period, but rather the provision is calculated at nominal value. 

Financial assets in stage 1 and stage 2 are assessed for impairment collectively, whilst those assets in stage 3 are subject 
to either collective or specific impairment assessment. 

Significant changes in credit risk 

Significant increases in credit risk for financial assets are assessed by comparing the risk of a default occurring over 
the expected life of a financial asset at the reporting date compared to the corresponding risk of default at origination. 
In determining what constitutes a significant increase in credit risk, the Group considers qualitative and quantitative 
information. The judgement to determine this is primarily based on changes in internal customer risk grades since 
origination of the facility. For all of the Group’s loan portfolios, in addition to the primary indicator, a mathematical 
model has been developed to identify where a facility’s recent behaviour has deteriorated significantly from its original 
behaviour. 

Key judgements and estimates made by the Group include the following: 

Forward looking information 

The measurement of expected credit losses needs to reflect an unbiased probability-weighted range of possible 
future outcomes. AASB 9 provides limited guidance on how to meet this requirement and, consequently, the Group 
has developed an approach considered appropriate for its credit portfolio, informed by emerging market practices. 

In applying forward looking information in its AASB 9 credit models, the Group considered three alternate economic 
scenarios (base case, strong recovery and moderate recession), to ensure a sufficient unbiased representative sample 
is included in estimating ECL. At 30 June 2023, the forward looking component of the collective provision for doubtful 
debts is $1.6m (2022: $0.9m). The balance of the overlay at 30 June 2022 reflected the level of uncertainty of the potential 
ongoing impact of COVID-19 at that time. At 30 June 2023, while there are no customers on COVID-19-related assistance, 
the overlay now primarily reflects the uncertainty surrounding the impact of inflation and higher interest rates on 
borrowers and the economy more broadly.

80

MyState LimitedAnnual Report 2023 
 
4.4  Transfer of financial assets (securitisation program)
Some loans and advances to customers are sold by the Group to securitisation vehicles. The transfer takes the form of the 
Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes. The Group utilises its 
securitisation program to provide regulatory capital relief and funding diversification.

The following table sets out the carrying values at the transaction date of financial assets transferred during the financial year in 
this manner to vehicles that provide regulatory capital relief and the value of the associated liabilities issued from the vehicles. 
This table does not include transfer of assets to the securitisation vehicle in which the Group is the bond holder.

Transferred financial assets:

Loans and advances 

Associated financial liabilities:

Securitisation liabilities to external investors 

30 June 2023  
$‘000

30 June 2022  
$‘000

594,305 

 350,389 

594,305 

 350,389 

Transfer of financial assets accounting policy

Once assets are transferred to a securitisation vehicle, the Group does not have the ability to use the transferred 
assets during the term of the arrangement. The Group does not have any loans transferred to unconsolidated 
securitisation vehicles. 

The consolidated securitisation vehicles generally transfer all the risks and rewards of ownership of the assets to the investors 
in the notes. However, derecognition of the transferred assets from the Group is prohibited because the cash flows 
that the securitisation vehicles collect from the transferred assets on behalf of the investors are not passed to them 
without material delay. In these cases, the consideration received from the investors in the notes in the form of cash 
is recognised as a financial asset and a corresponding financial liability is recognised. The investors in the notes have 
recourse only to the cash flows from the transferred financial assets.

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81

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

4.5  Deposits and other borrowings including subordinated notes

Deposits

At call deposits

Term deposits 

Negotiable certificates of deposit 

Total deposits 

Other borrowings

Subordinated notes(i) 

Floating rate notes(ii) 

Securitisation liabilities 

Term funding facility 

Additional Tier 1 Hybrid capital instrument(iii) 

Total deposits and other borrowings including subordinated notes 

Concentration of deposits:

Customer deposits 

Wholesale deposits 

Subordinated notes(i) 

Floating rate notes(ii) 

Term funding facility 

Securitisation liabilities 

Additional Tier 1 Hybrid capital instrument(iii) 

Total deposits

30 June 2023  
$‘000

30 June 2022  
$‘000

 3,380,217 

 3,413,960 

2,881,086 

 2,193,424 

392,677 

 516,463 

6,653,980 

 6,123,847 

49,824 

249,556 

 49,758 

 149,685 

1,396,290 

 1,090,194 

154,700 

63,835 

 184,700 

 – 

8,568,185 

 7,598,184 

6,236,356 

 5,553,779 

417,624 

49,824 

249,556 

154,700 

 570,068 

 49,758 

 149,685 

 184,700 

1,396,290 

 1,090,194 

63,835 

 – 

 8,568,185 

 7,598,184 

(i)    Refer to note 3.1 (ii) for details regarding the subordinated notes issue.

(ii)   On 13 October 2022, floating rate notes with a face value of $100m and term of three years were issued by MyState Limited.

(iii) On 30 August 2022, MyState Limited (MyState) issued $65 million of inaugural Additional Tier 1 notes to wholesale investors (Capital Notes).

There are no customers who individually have deposits which represent 10% or more of total liabilities.

Deposits and other borrowings accounting policy

Deposits and other borrowings are initially measured at fair value, net of transaction costs and are subsequently measured 
at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The Group does not currently hold any financial liabilities at fair value.

82

MyState LimitedAnnual Report 20234.6  Other liabilities

Trade payables and related accruals 

Lease liabilities

Total other liabilities

Lease liabilities

30 June 2023  
$‘000

30 Jun 2022  
$‘000

9,934 

8,177 

18,111 

 6,975 

 10,238 

 17,213 

Lease liabilities are initially measured at the present value of the future lease payments at the commencement date, 
discounted using the interest rate implicit in the lease (or if that rate cannot be readily determined, the lessee’s incremental 
borrowing rate).

Lease payments are allocated between principal and interest expense. Interest expense is recognised as a financing 
cost within interest expense (refer note 2.1) in the income statement over the lease period. Any variable lease payments 
not included in the measurement of the lease liability are also recognised in the income statement in the period in which 
the event or condition that triggers those payments occurs. Lease liabilities are remeasured when there is a change 
in future lease payments arising from a change in lease term, an assessment of an option to purchase the underlying 
asset, an index or rate, or a change in the estimated amount payable under a residual value guarantee. When the lease 
liability is remeasured, a corresponding adjustment is made to the carrying value of the right-of-use (ROU) asset, 
or, in the income statement, where the carrying value of the ROU asset has been fully written down. The ROU asset 
is recorded in property, plant and equipment and right-of-use assets (refer to note 5.1).

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83

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

4.7  Fair value of financial instruments

Classification of financial instruments
Cash and liquid assets and amounts due from financial institutions are carried at cost. As these assets are short-term assets, 
their cost is considered to approximate their fair value.

The following financial assets and liabilities are also carried at amortised cost:

•  financial instruments;

•  loans and advances;

•  deposits; and

•  other borrowings.

The aggregate net fair value of financial assets and financial liabilities which are carried at amortised cost is:

Financial assets

Financial instruments 

Loans and advances 

Total financial assets 

Financial liabilities

Deposits 

30 June 2023

30 June 2022

Carrying  
value  
$‘000

Net fair  
value  
$‘000

 Carrying 
value  
$‘000

 Net fair  
value  
$‘000

928,152 

 911,377 

 833,397 

 819,283 

7,908,080 

 7,840,782 

 6,971,375 

 6,893,600 

8,836,232 

 8,752,159 

 7,804,772 

 7,712,883 

6,653,980 

 6,651,540 

 6,123,847 

 6,117,002 

Other borrowings including subordinated notes 

1,914,205 

 1,912,535 

 1,474,337 

 1,473,059 

Total financial liabilities 

8,568,185 

 8,564,075 

 7,598,184 

 7,590,061 

The aggregate net fair values of financial assets and financial liabilities which are carried at fair value is:

Financial assets

Derivative assets

Due from other financial institutions 

Total financial assets 

Financial liabilities

Due to other financial institutions 

Total financial liabilities 

30 June 2023

30 June 2022

Carrying  
value  
$‘000

 8,728 

48,003 

56,731 

66,294 

66,294 

Net fair  
value  
$‘000

 8,728 

 48,003 

 56,731 

 66,294 

 66,294 

Carrying  
value  
$‘000

Net fair  
value  
$‘000

 9,529 

 40,924 

 50,453 

 22,982 

 22,982 

 9,529 

 40,924 

 50,453 

 22,982 

 22,982 

Fair value hierarchy
The level in the fair value hierarchy of the inputs used in determining the fair values is shown below. 

The fair value of these assets is:

Level 1 – inputs that are prices quoted for identical instruments in active markets;

Level 2 – inputs based on observable market data other than those in level 1; and

Level 3 – inputs for which there is no observable market data.

Where the expected maturity is in excess of 12 months, the fair value is discounted to its present value. During the half year, 
there have been no material transfers between levels of the fair value hierarchy. Classifications are reviewed at reporting dates 
and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair 
value measurement.

84

MyState LimitedAnnual Report 2023Fair value hierarchy for items carried at amortised cost

2023

Financial assets

Financial instruments

Loans and advances 

Financial liabilities

Deposits

Other borrowings including subordinated notes 

2022

Financial assets

Financial instruments 

Loans and advances 

Financial liabilities

Deposits 

Other borrowings including subordinated notes 

Level 1  
value  
$‘000

Level 2  
value  
$‘000

Level 3  
value  
$‘000

 Total  
value  
$‘000

 – 

– 

– 

– 

– 

– 

– 

– 

 911,377 

 – 

 911,377 

 – 

 7,840,782 

 7,840,782 

 6,651,540 

 1,912,535 

 – 

 – 

 6,651,540 

 1,912,535 

 819,283 

 – 

 819,283 

 – 

 6,893,600 

 6,893,600 

 6,301,702 

 1,288,359 

 – 

 – 

 6,301,702 

 1,288,359 

There has been no impact on profit and loss of fair value movements of assets that are within Level 3 of the fair value hierarchy.

Fair value hierarchy for items carried at fair value

Level 1  
value  
$‘000

Level 2  
value  
$‘000

Level 3  
value  
$‘000

 Total  
value  
$‘000

2023

Financial assets

Derivative assets 

Due from other financial institutions 

Financial liabilities

Due to other financial institutions 

2022

Financial assets

Derivative assets 

Due from other financial institutions 

Financial liabilities

Due to other financial institutions 

– 

– 

– 

– 

– 

– 

 8,728 

 48,003 

 66,294 

 9,529 

 40,924 

 22,982 

 – 

 – 

 – 

 – 

 – 

 – 

 8,728 

 48,003 

 66,294 

 9,529 

 40,924 

 22,982 

There has been no impact on profit and loss of fair value movements of assets that are within Level 3 of the fair value hierarchy. 
The Group has performed a VaR analysis as detailed in note 3.2, Market risk. VaR takes account of all material market variables 
that may cause a change in the value of the loan portfolio, being 100% of Level 3 inputs. 

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85

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

5.1  Property, plant and equipment and right-of-use assets

Leasehold improvements

At cost 

Accumulated depreciation 

Plant and equipment

At cost 

Accumulated depreciation

Right-of-use assets – land and buildings 

At cost 

Accumulated depreciation

Total property, plant and equipment 

30 June 2023  
$‘000

30 June 2022  
$‘000

7,429 

(7,030)

 399 

6,175 

 (5,375)

800 

15,181 

 (8,403)

 6,778 

7,977 

 7,370 

 (6,820)

 550 

 5,847 

 (5,040)

 807 

 15,581 

 (6,485)

 9,096 

 10,453 

Property, plant and equipment accounting policy

Leasehold improvements

Leasehold improvements are carried at cost less any subsequent accumulated depreciation on leasehold improvements. 

Plant and equipment and right-of-use (ROU) assets

Plant and equipment and right-of-use assets are measured at cost less accumulated depreciation and any impairment 
in value. The cost of ROU assets correspond to the amount recognised for the lease liability on initial recognition together 
with any lease payments made at or before the commencement date, net of any lease incentives received and initial 
direct costs.

Impairment of property, plant and equipment and right-of-use assets

The carrying values of property, plant and equipment and right-of-use assets are reviewed for impairment when 
events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not 
generate largely independent cash flows, the recoverable amount is determined for the cash-generating unit to 
which the asset belongs.

Derecognition of property, plant and equipment and right-of-use assets

An item of property, plant and equipment or right-of-use asset is derecognised upon disposal or when no future economic 
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset 
(calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the 
Consolidated Income Statement in the year the item is derecognised.

86

MyState LimitedAnnual Report 2023 
5.2  Intangible assets and goodwill

Goodwill  
$‘000

Software  
$‘000

Total  
$‘000

Year ended 30 June 2023

At 1 July 2022, net of accumulated amortisation

Additions

Transfer out from derecognition of SAAS capitalised costs

Amortisation

 65,152 

 – 

 – 

 – 

At 30 June 2023, net of accumulated amortisation

 65,152 

 13,693 

 2,943 

 – 

 (3,866)

 12,770 

 78,845 

 2,943 

 – 

 (3,866)

 77,922 

At 30 June 2023

Cost (gross carrying amount less impairment)

 65,152 

 40,293 

 105,445 

Accumulated amortisation 

Net carrying amount

Year ended 30 June 2022

At 1 July 2021, net of accumulated amortisation 

Additions

Transfer out from derecognition of SAAS capitalised costs

Amortisation

At 30 June 2022, net of accumulated amortisation 

At 30 June 2022

Cost (gross carrying amount less impairment)

Accumulated amortisation 

Net carrying amount

 – 

 (27,523)

 (27,523)

 65,152 

 12,770 

 77,922 

 65,152 

 – 

 – 

 – 

65,152

 65,152 

 – 

 65,152 

 18,326 

 4,343 

 (3,351)

 (5,625)

 13,693 

 83,478 

 4,343 

 (3,351)

 (5,625)

 78,845 

 40,293 

 (26,600)

 13,693 

 105,445 

 (26,600)

 78,845 

Intangibles accounting policy

Intangible assets acquired separately are capitalised at cost and from a business combination are capitalised at fair 
value as at the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible 
assets. The useful lives of these intangible assets are assessed to be either finite or infinite. Where amortisation is 
charged on assets with finite lives, this expense is taken to the Consolidated Income Statement. Certain costs directly 
incurred in acquiring and developing software are capitalised and amortised over the estimated useful life. 

Software as a Service arrangement

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Any capitalised costs of configuring or customising a supplier’s application Software in a Software as a service arrangement 
have been derecognised in the financials in line with the IFRS Interpretation Committee’s (IFRIC) agenda decision in 
April 2021. The impact has been recognised in the Group’s retained earnings. 

Intangible assets are tested for impairment where an indicator of impairment exists and, in the case of indefinite life 
intangibles (limited to goodwill), annually, either individually or at the cash-generating unit level. Useful lives are also 
examined on an annual basis and adjustments, where applicable, are made on a prospective basis.

Goodwill is treated as an indefinite life intangible, software and other intangibles are finite life intangibles. Refer to note 
2.4 Expenses for the useful life of tangible and intangible assets.

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87

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

5.2  Intangible assets and goodwill continued

Impairment testing of goodwill
For the purpose of impairment testing, goodwill has been allocated to the Group’s two cash-generating units (CGUs) the 
Banking Business and the Wealth Management Business. These CGUs represent the lowest level within the Group at which 
the goodwill is monitored for internal management purposes. The aggregate carrying amounts of goodwill allocated to each 
CGU for the purpose of impairment testing is as follows:

Banking Business 

Wealth Management Business 

Total goodwill 

30 June 2023  
$‘000

30 June 2022  
$‘000

40,189 

24,963 

65,152 

 40,189 

 24,963 

 65,152 

The Group’s assessment of goodwill value-in-use exceeds the carrying value allocated to the CGUs and included in the 
financial statements. 

The recoverable amounts for each CGU’s value-in-use was determined using cash flow projections from Board-approved 
financial budgets for the year ending 30 June 2024. Growth rates have been applied from year two through to year 10. 
Cash flows are projected by undertaking detailed calculations for each income and expense category over a three-year 
period and are then extrapolated off the third year, which is the lowest point of growth. An exit value is calculated at the 
end of 10 years, based on an implied terminal value earnings multiple of 10.5 and 12.7 for the Banking Business and the 
Wealth Management Business respectively, and a long-term growth rate not exceeding industry. A post-tax discount rate 
of 10.9% (15.6% pre-tax) and 9.9% (14.1% pre-tax) was used for the Banking Business and the Wealth Management Business 
respectively. Certain income categories are modelled by projecting growth in relevant portfolio balances and the resulting 
income derived there from. Other non-portfolio-related income streams and expense categories are modelled by projecting 
real rates of growth (above inflation) for each category. Terminal value is determined at year 10 using the assumption that the 
CGU achieves no real growth above inflation into perpetuity. The growth rates applied do not exceed the long-term average 
growth rate for the business which the CGU operates. The discount rate used of 10.9% reflects the Group’s post-tax nominal 
weighted average cost of capital, which has been reviewed by externally engaged advisers and approved by the Board. 
Average inflation is projected to be 5.6%. The method for determining value-in-use is consistent with that adopted in the 
comparative period.

The key assumptions adopted in assessing Banking’s value-in-use are the rate of growth in the balance of the housing loan 
portfolio and the outlook for net interest margin (NIM). Taking into account Management’s past experiences and external evidence, 
the assumptions that have been adopted for both of these components are considered to be reasonable. Management expects 
that any reasonably possible change to assumptions used in Management’s assessment will not result in impairment.

The key assumption adopted in assessing Wealth Management’s value-in-use is the rate of growth in income derived from 
management fee (MF) income. MF income is derived from its activities as the responsible entity for various Managed Investment 
Schemes (MIS). MF income derived is directly related to the portfolio balances of the MIS. Other sources of income for the 
Wealth Management Business are its Trustee Services divisions. Taking into account Management’s past experiences and 
external evidence, the assumptions adopted are considered reasonable. Management’s assessment of Wealth Management’s 
value-in-use exceeds its carrying value. Any reasonably possible change to assumptions used in Management’s assessment 
will not result in impairment.

Goodwill accounting policy

Goodwill on the acquisition of businesses is carried at cost as established at the date of the acquisition of the business 
less accumulated impairment losses, if any. 

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups 
of CGUs) that is expected to benefit from the synergies of the combination.

A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is 
an indication that the unit may be impaired. If the recoverable amount of the CGU is less than its carrying amount, 
the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to 
the other assets of the unit pro-rata based on the carrying amount of each asset in the CGU. Any impairment loss for 
goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent 
periods. On disposal of the relevant CGU, the attributable amount of goodwill is included in the determination of the 
profit or loss on disposal.

Impairment of subsidiaries accounting policy

Investments in subsidiaries are tested annually for impairment or more frequently if events or changes in circumstances 
indicate that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which 
the investment’s carrying amount exceeds its recoverable amount (which is the higher of fair value less costs to sell 
and value-in-use). At each balance sheet date, the investments in subsidiaries that have been impaired are reviewed 
for possible reversal of the impairment.

88

MyState LimitedAnnual Report 20235.3  Employee benefits provisions

Balances

Provision for annual leave 

Provision for long service leave 

Total employee benefits provisions 

Due to be settled within 12 months 

Due to be settled in more than 12 months 

Total employee benefits provisions 

30 June 2023  
$‘000

30 June 2022  
$‘000

2,198 

3,147 

5,345 

4,193 

1,152 

5,345 

 2,319 

 3,266 

 5,585 

 4,129 

 1,456 

 5,585 

Employee benefits accounting policy

Liabilities for salaries, wages and annual leave are recognised in respect of employees’ service up to the reporting 
date. Where settlement is expected to occur within 12 months of the reporting date, the liabilities are measured at their 
nominal amounts based on the remuneration rates which are expected to be paid when the liability is settled. Where 
settlement is expected to occur later than 12 months from reporting date, the liabilities are measured at the present 
value of payments which are expected to be paid when the liability is settled.

A liability for long service leave is recognised and measured at the present value of expected future payments to be 
made in respect of services provided up to the reporting date. Consideration is given to expected future wage and 
salary levels, experience of employee departures and periods of service.

Contributions are made by the Group to employee superannuation funds and are charged as expenses when incurred.

5.4  Share capital

Issued and paid up ordinary shares 

Movements in ordinary share capital

30 June 2023  
$‘000

30 June 2022  
$‘000

225,274 

 211,167 

30 June 2023

30 June 2022

Number 
of shares

Amount  
$‘000

Number  
of shares

Opening balance 

105,904,941 

 211,167 

 105,275,092 

Shares issued pursuant to the:

– Group employee share scheme 

10,954 

 50 

 12,584 

– Dividend reinvestment plan underwrite 

2,587,858 

 10,058 

– Dividend reinvestment plan 

– Less: Share issue transaction costs, net of tax 

1,090,682 

– 

 4,146 

 (147)

 – 

 617,265 

 – 

Closing balance 

109,594,435 

 225,274 

 105,904,941 

Amount  
$‘000

 208,196 

 62 

 – 

 3,000 

 (91)

 211,167 

Terms and conditions
Ordinary shares have the right to receive dividends as declared from time to time and, in the event of a winding up of the 
Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares and amounts 
paid up on the shares held. Ordinary shares entitle their holder to one vote per share, either in person or by proxy at meetings 
of the Company. 

The Company does not have authorised capital or par value in respect of its issued shares.

The Group offers share-based remuneration; refer to the Remuneration report for further information regarding these arrangements.

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89

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

6.1  Income tax expense, current and deferred tax balances
The major components of income tax expense/(benefit) are:

Income tax expense

Current income tax charge 

Adjustment in respect of current income tax of previous years 

Adjustments in respect of deferred income tax of previous years

Adjustments in respect of equity/goodwill 

Relating to origination and reversal of temporary differences 

Total income tax expense 

A reconciliation between tax expense and accounting profit before income tax 
multiplied by the Group’s applicable income tax rate is as follows:

Income tax expense attributable to:

Accounting profit before income tax 

The income tax expense comprises amounts set aside as:

Provision attributable to the current year at the statutory rate of 30%, being:

– Prima facie tax on accounting profit before tax 

– Under/(over) provision in prior year 

Expenditure not allowable for income tax purposes 

Other 

30 June 2023  
$‘000

30 June 2022  
$‘000

16,674 

 12,426 

78 

289 

(358)

16,683 

 (34)

 – 

 (2,789)

 4,273 

 13,876 

55,185 

 45,902 

16,556 

 13,771 

78 

49 

– 

 (34)

 139 

 – 

Income tax expense reported in the consolidated income statement 

16,683 

 13,876 

Total income tax expense 

Weighted average effective tax rates

Deferred income tax relates to the following:

Deferred tax assets

Employee entitlements 

Provisions 

Doubtful debts 

Other 

Total deferred tax assets 

Current tax receivable 

Total tax assets 

Deferred tax liabilities

Financial assets at fair value 

Property, plant and equipment 

Other 

Total deferred tax liabilities 

Current tax payable 

Total tax liabilities 

90

 16,683 

 13,876 

30.2%

30.2%

1,604 

267 

2,116 

1,571 

5,558 

– 

5,558 

59 

1,945 

4,271 

6,275 

2,509 

8,784 

 1,676 

 243 

 1,337 

 1,639 

 4,895 

 1,383 

 6,278 

 61 

 1,711 

 4,198 

 5,970 

 – 

 5,970 

MyState LimitedAnnual Report 2023Movements in deferred tax balances

 Deferred tax assets 

Deferred tax liabilities

30 June 2023  
$’000

30 June 2022  
$’000

30 June 2023  
$’000

30 June 2022  
$’000

Opening balance 

Reclassification deferred tax 

(Charged)/credited to income statement 

Credited/(charged) to equity 

Adjustments for deferred tax of prior years

4,895 

 5,900 

 5,970 

71 

545 

47 

 – 

 (130)

 (916)

 41 

 – 

 71 

 476 

 (242)

 – 

Closing balance 

5,558 

 4,895 

 6,275 

 2,802 

 (130)

 468 

 2,830 

 – 

 5,970 

Taxation accounting policy
Income tax expense is recognised in the Consolidated Income Statement, except to the extent that it relates to items 
recognised directly in other comprehensive income, in which case it is recognised in the Consolidated Statement of 
Comprehensive Income. Income tax expense on the profit or loss of the period comprises current tax and deferred tax.

Current tax payable
Current tax payable is the expected tax payable on the taxable income for the financial year using tax rates that have 
been enacted, and any adjustment to tax payable in respect of previous years.

Deferred tax
Deferred income tax is provided on all temporary differences at reporting date. Temporary differences are calculated 
at each reporting date as the difference between the carrying amount of assets and liabilities for financial reporting 
purposes and their tax base.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

•  where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a 

transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit 
nor taxable profit or loss; and

•  when the taxable temporary differences associated with the investments in subsidiaries and the timing of the reversal 
of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the 
foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets 
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible 
temporary differences and the carry forward of unused tax assets and unused tax losses can be utilised except:

•  when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition 
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affect 
neither the accounting profit nor the taxable profit and loss; and

•  when the deductible temporary differences are associated with investments in subsidiaries, in which case a deferred 

tax asset is only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable 
future and taxable profit will be available against which the temporary differences can be utilised. 

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets 
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same 
taxable authority.

The Group undertakes transactions in the ordinary course of business where the income tax treatment requires the 
exercise of judgement. The Group estimates its tax liability based on its understanding of the tax law.

Tax consolidation
The Group has elected to be taxed as a single entity under the tax consolidation regime. The head company is MyState 
Limited. The members of the Group have entered into a tax sharing agreement that provides for the allocation of income 
tax liabilities among the entities should the head entity default on its tax payment obligations. No amounts have been 
recognised in the financial statements in respect of this agreement on the basis that the possibility of default is remote.

The Company and the controlled entities in the tax consolidated group continue to account for their own current and 
deferred tax amounts. The Company has applied the separate tax payer within group approach in determining the 
appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated group.

In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities (or assets) 
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in 
the tax consolidated group. 

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement 
are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

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91

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

7.1  Parent entity information
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, 
are the same as those applied in the consolidated financial statements. Refer to note 1 and policy notes within the financial 
statements for a summary of the significant accounting policies relating to the Group.

Statement of Financial Position

Assets

Cash and liquid assets 

Other receivables 

Related party receivables 

Investments in subsidiaries 

Current and deferred tax assets 

Total assets 

Liabilities

Other liabilities 

Other borrowings 

Related party payables 

Tax liabilities 

Employee benefits provisions 

Total liabilities 

Net assets 

Equity

Share capital 

Retained earnings 

Reserves 

Total equity 

Financial performance

Profit after income tax for the year 

Other comprehensive income 

Total comprehensive income 

30 June 2023  
$‘000

30 June 2022  
$‘000

4,903 

833 

50,000 

340,469 

1,024 

 3,963 

 1,131 

 50,000 

 324,392 

 1,200 

397,229 

 380,686 

457 

 820 

50,000 

 50,000 

4,188 

2,557 

373 

57,575 

 5,392 

 (1,467)

 439 

 55,184 

339,654 

 325,502 

331,203 

 317,095 

7,139 

1,312 

 7,182 

 1,025 

339,654 

 325,302 

24,637 

 26,813 

– 

 – 

24,637 

 26,813 

The parent entity has not entered into any guarantees and does not have any contingent liabilities as at 30 June 2023 
(30 June 2022: nil).

Transactions between the Company and the consolidated entities principally arise from the provision of management and 
governance services. All transactions with subsidiaries are in accordance with regulatory requirements, the majority of which 
are on commercial terms. All transactions undertaken during the financial year with the consolidated entities are eliminated 
in the Consolidated Financial Statements. Amounts due from and due to entities are presented separately in the Statement 
of Financial Position of the Company except where offsetting reflects the substance of the transaction or event.

92

MyState LimitedAnnual Report 20237.2  Controlled entities and principles of consolidation
Details of the Group’s material subsidiaries at the end of the reporting period are as follows.

Significant subsidiaries

Principal activities

Country of incorporation

MyState Bank Limited

Banking 

TPT Wealth Limited

Wealth Management 

Australia

Australia

Connect Asset Management Pty Ltd Manager of Securitisation Vehicles

 Australia 

Ownership 
interest

100%

100%

100%

Basis of consolidation accounting policy

The consolidated financial statements incorporate the financial statements of the Company and entities (including 
structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:

•  has power over the investee;

•  is exposed, or has rights, to variable returns from its involvement with the investee; and

•  has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are 
changes to one or more of these three elements of control.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when 
the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. 
The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights 
in an investee are sufficient to give it power, including:

•  the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

•  potential voting rights held by the Company, other vote holders or other parties;

•  rights arising from other contractual arrangements; and

•  any additional facts and circumstances that indicate that the Company has, or does not have, the current ability 
to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous 
shareholders’ meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company 
loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the 
year are included in the Consolidated Income Statement and Other Comprehensive Income from the date the Company 
gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of Other Comprehensive Income are attributed to the owners of the Company and 
to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company 
and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies 
in line with the Group’s accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members 
of the Group are eliminated in full on consolidation.

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93

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

7.3  Related party disclosures
The ultimate parent entity and controlling entity is MyState Limited. Balances and transactions between the Company and its 
subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this 
note. Details of transactions between the Group and other related parties are disclosed in the following paragraphs.

Managed Investment Schemes
Within the Group, TPT Wealth Limited (TPT) is a Responsible Entity for Managed Investment Schemes (Funds) and, accordingly, 
has significant influence over their activities. TPT receives management fees from these Funds. TPT also pays expenses of 
the Funds for which it is reimbursed. TPT and the Company have also invested in these Funds and receive distributions on 
these investments. These investments are made on the same terms and conditions that apply to all investors in these Funds. 
Details of these transactions and balances are as follows:

Management fees received 

Balance of investment held at year end 

Distributions received from managed funds 

The Funds have:

 Consolidated

TPT

30 June 2023  
$‘000

30 June 2022  
$‘000

30 June 2023  
$‘000

30 June 2022  
$‘000

8,799 

2,605 

74 

 9,078 

 2,532 

 23 

 8,799 

 2,605 

 74 

 9,078 

 2,532 

 22 

•  accepted money on deposit from Directors and Executives or entities associated with Directors and Executives at prevailing 

Fund rates and conditions;

•  loaned money to MyState Bank, in the form of term deposits and negotiable certificates of deposit, totalling $2.61m  

(2022: $2.58m); and

•  invested in the ConQuest Trusts Residential Mortgage Backed Securities Program in the form of Class A and B notes 

totalling $32.50m (2022: $31.29m).

These deposits are made on the same terms and conditions that apply to all similar transactions.

Key Management Personnel
(i)  Loans to Directors

During 2023, secured loans advanced to the Managing Director and Chief Executive Officer were nil. At 30 June 2023, 
the balance outstanding was nil (2022: $0.97m).

(ii)  Individual Directors and Executive compensation disclosures

Information regarding individual Directors, Executive compensation and equity instruments disclosures, as required by the 
Corporations Regulation 2M.2.03, is provided in the Remuneration Report section of the Directors’ report. Disclosure of the 
compensation and other transactions with Key Management Personnel (KMP) is required pursuant to the requirements of 
Australian Accounting Standard AASB 124 Related Party Disclosures. The KMP of the Group is comprised of the Non-Executive 
Directors, Managing Director and Chief Executive Officer and certain Executives.

Key Management Personnel compensation

The key management personnel compensation comprised:

Short-term employee benefits 

Post-employment benefits 

Share-based payment(i) 

Termination benefits 

30 June 2023  
$‘000

30 June 2022  
$‘000

3,963 

 3,888 

330 

261 

268 

 323 

 208 

 – 

(i)  These amounts are estimates of compensation and include a portion that will only vest to the Managing Director or Executive when certain performance 
criteria are met or a ‘Capital Event’ occurs. The fair value of shares is calculated at the date of grant and is allocated to each reporting period over the 
period from grant date to vesting date. The value disclosed is the portion of the fair value of the shares allocated to this reporting period.

94

MyState LimitedAnnual Report 2023 
8.1  Contingent liabilities and expenditure commitments
MyState Bank Limited has provided guarantees to third parties in order to secure the obligations of customers. The maximum 
exposures to these guarantees are disclosed below. The range of situations in which these guarantees are given include:

•  local government authorities, to secure the obligations of property and sub-divisional developers to complete 

infrastructure developments;

•  local government authorities, schools and other building owners, to secure the obligations of building contractors 

to complete building works;

•  landlords, to secure the obligations of tenants to pay rent; and

•  CUSCAL, to secure payroll and direct debit payments processed by CUSCAL on behalf of customers.

Customer commitments

Loans approved but not advanced to borrowers

Undrawn continuing lines of credit 

Performance guarantees 

Total customer commitments 

30 June 2023  
$‘000

30 June 2022  
$‘000

 91,849 

53,591 

2,472 

 207,176 

 58,269 

 2,919 

147,912 

 268,364 

Guarantees are issued in accordance with approved Board policy. Those guarantees over $10,000 are required to be secured. 
In the event that a payment is made under a guarantee, the customer’s obligation to MyState Bank Limited is crystallised in 
the form of an overdraft or loan. 

Estate administration
TPT Wealth Limited acts as executor and trustee for a significant number of trusts and estates. In this capacity, this Company 
has incurred liabilities for which it has a right of indemnity out of the assets of those trusts and estates. Accordingly, these 
liabilities are not reflected in the financial statements.

Other contracted commitments for expenditure on plant and equipment as at the reporting date are for only minimal amounts.

8.2  Remuneration of auditors

During the financial year, the following fees which are shown exclusive of GST claimed were 
paid or payable for services provided by the auditor of the Group, Wise Lord & Ferguson:

30 June 2023  
$‘000

30 June 2022  
$‘000

Audit services

Audit of the financial statements of the consolidated entities 

Total remuneration for audit services 

Audit-related services

Assurance-related services 

Audit of loans and other services to the securitisation program 

Total remuneration for audit-related services 

Other non-external audit-related services

Other services 

Total remuneration for non-audit related services 

Total remuneration for services provided 

448 

448 

60 

4 

64 

49 

49 

561 

 418 

 418 

 51 

 4 

 55 

 51 

 51 

 524 

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95

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued

8.3  Events subsequent to balance date 
There are no matters or circumstances that have arisen since the end of the year which significantly affected or may significantly 
affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods.

8.4  Other significant accounting policies, new accounting standards and disclosures
The principal accounting policies, which are consistent with those applied in the comparative period unless otherwise stated, 
that have been adopted in the preparation of the Financial report are set out in this section and the preceding sections.

(i)  Other assets
Other assets comprise accounts receivable, accrued income and prepayments. Accounts receivable are initially recorded at 
the fair value of the amounts to be received and are subsequently measured at amortised cost using the effective interest rate 
method, less any provision for impairment loss. 

(ii)  Other liabilities
Other liabilities comprise accounts payable and accrued expenses and represent liabilities for goods and services received 
by the Group that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the 
amounts normally paid within 30 days of the recognition of the liability.

(iii)  New and revised accounting standards
The Group has adopted the following new standards and amendments to standards:

•  AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition 

of Accounting Estimates.

•  AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities 

arising from a Single Transaction.

Adoption of these amendments has not resulted in any significant changes in how the Group currently applies 
accounting standards.

The following accounting standards will become effective in future financial years:

•  AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current 

(effective 1 January 2024).

Adoption of these amendments is not expected to result in any significant changes to how the Group applies accounting 
standards in future financial years.

96

MyState LimitedAnnual Report 2023Directors’ declaration 
for the year ended 30 June 2023

In accordance with a resolution of the Directors of MyState Limited, we state that:

1. 

In the opinion of the Directors:

(a)  The financial statements and notes of the Group set out on pages 54 to 96 are in accordance with the Corporations 

Act 2001, including:

(i)  giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for the 

year ended on that date; and

(ii)  complying with accounting standards, the Corporations Regulations 2001 and other mandatory professional 

reporting requirements; and

(b)  There are reasonable grounds to believe that MyState Limited will be able to pay its debts as and when they become 

due and payable.

2.   The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 by the Chief 

Executive Officer and Chief Financial Officer for the financial year ended 30 June 2023.

3.  The financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 1.2.

This declaration is made in accordance with a resolution of the Directors.

On behalf of the Board

Vaughn Richtor  
Chairman

Brett Morgan  
Managing Director and Chief Executive Officer

Hobart, dated this 18 August 2023

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97

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Independent auditor’s report

IInnddeeppeennddeenntt  AAuuddiittoorr’’ss  RReeppoorrtt  ttoo  tthhee  SShhaarreehhoollddeerrss  ooff  MMyySSttaattee  LLiimmiitteedd  

OOppiinniioonn    

We have audited the financial report of MyState Limited (the Company) and its subsidiaries (collectively 
the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the 
consolidated statement of comprehensive income, the consolidated statement of changes in equity 
and  the  consolidated  statement  of  cash  flows  for  the  year  then  ended,  and  notes  to  the  financial 
statements, including a summary of significant accounting policies, and the directors’ declaration.  

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations 
Act 2001, including: 

(i)  giving a true and fair view of the consolidated financial position of the Group as at 30 June 
2023 and of its consolidated financial performance for the year then ended on that date; 
and  

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.  

BBaassiiss  ffoorr  OOppiinniioonn    

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under 
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report 
section of our report. We are independent of the Group in accordance with the auditor independence 
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional 
& Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are 
relevant  to  our  audit  of  the  financial  report  in  Australia.  We  have  also  fulfilled  our  other  ethical 
responsibilities in accordance with the Code.  

We confirm that the independence declaration required by the Corporations Act 2001, which has been 
given to the directors of the Company, would be in the same terms if given to the directors as at the 
time of this auditor’s report. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis 
for our opinion.  

KKeeyy  AAuuddiitt  MMaatttteerrss  

Key audit matters are those matters that, in our professional judgement, were of most significance in 
our audit of the financial report of the current period. These matters were addressed in the context 
of  our  audit  of  the  financial  report  and  in  forming  our  opinion  thereon,  and  we  do  not  provide  a 
separate  opinion  on  these  matters.  For  each  matter  below,  our  description  of  how  our  audit 
addressed the matter is provided in that context. 

We  have  fulfilled  the  responsibilities  described  in  the  Auditor’s  Responsibilities  for  the  Audit  of  the 
Financial Report section of our report, including in relation to these matters. Accordingly, our audit 
included  the  performance  of  procedures  designed  to  respond  to  our  assessment  of  the  risks  of 
material misstatement of the financial statements.  

98

MyState LimitedAnnual Report 2023 
 
 
  
The  results  of  our  audit  procedures,  including  the  procedures  performed  to  address  the  matters 
below, provide the basis for our audit opinion on the accompanying Financial Report.  

11.. OOppeerraattiioonn  ooff  IITT  SSyysstteemmss  aanndd  CCoonnttrroollss

Key audit matter 

How our audit addressed the matter 

This is a key audit matter because a significant part of 
the Group’s financial reporting process is heavily reliant 
on IT systems with automated processes and controls 
for the capture, processing, storage, and extraction of 
information. 

There  has  been  continued  change  to  the  Group’s  IT 
landscape  in  the  2023  financial  year  and  it  has  been 
essential  to  ensure  appropriate  user  access  and 
change  management  protocols  exist  and  are  being 
observed. These protocols are important because they 
ensure  that  access  and  changes  to  IT  systems  and 
related  data  are  made  and  authorised 
in  an 
appropriate manner. 

These  key  controls  mitigate  potential  fraud  or  error 
because of change to an application or underlying data. 

MyState  has  outsourced  arrangements  in  place  for  a 
number of key IT processes. 

We  focus  our  audit  on  those  IT  systems  and  controls 
that  are  significant  to  the  Group’s  financial  reporting 
process. 

We  assessed  and  tested  the  design  and  operating 
effectiveness of the Group’s IT controls, including those 
over  user  access  and  change  management  as  well  as 
data reliability and integrity. 

This involved assessing: 

•

•

•

•

and

control 

environment 

Technology 
governance;
Change  management  processes  for  software
applications;
Access 
segregation of duties;
the
System 
appropriateness of management’s testing and
implementation controls;

controls  designed 

development, 

reviewing 

enforce

to 

• We carried out direct tests of the operation of
key  programs  to  establish  the  accuracy  of
calculations, the correct generation of reports,
and  to  assess  the  correct  operation  of
automated 
technology-
dependent manual controls; and
Third party reports on IT systems and controls.

controls 

and 

•

For  outsourced  providers,  we  obtain  assurance  from 
third  party  auditors  on  the  design  and  operating 
effectiveness of controls. 

22.. RReeccooggnniittiioonn  aanndd  MMeeaassuurreemmeenntt  ––  GGooooddwwiillll

Refer to Note 5.3 ‘Goodwill’ 

Key audit matter 

How our audit addressed the matter 

There is also a high level of judgement required in the 
Group’s annual testing of impairment of goodwill with 
significant  forward-looking  assumptions  used  in  the 
valuation models. 

Details on the methodology and assumptions used in 
the impairment assessment if goodwill are included in 
Note 5.3 – Intangible assets and goodwill.  

To  address  the  risk  of  material  misstatement  and 
obtain  sufficient  audit  evidence,  we  performed  the 
following procedures over goodwill: 

•

•

Assessed  whether  the  models  used  in  the
impairment  testing  of  goodwill  met  the
requirements  of  Australian  Accounting
Standards;
Assessed  the  appropriateness  of  the  Cash
Generating  Units  (CGU)  identified  to  which
goodwill has been allocated;

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99

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Independent auditor’s report continued

Key audit matter 

How our audit addressed the matter 

•

•

•

•

forecasts  based  on 

Agreed  the  forecast  cash  flows  to  the  most
recent forecasts approved by management or
the Board, considered the reasonableness of
these 
the  current
economic  environment,  and  assessed  the
accuracy of the Group’s previous forecasts by
performing  a  comparison  of  historical
forecasts to actual results;
Assess  the  key  assumptions  used  in  the
impairment  assessment  with  reference  to
market rates and historical performance;
Test 
the  mathematical  accuracy  of 
impairment models;
Assessed  the  adequacy  of  the  disclosures
associated with the impairment assessment of
goodwill within the financial report.

the

33.. PPrroovviissiioonn  ffoorr  IImmppaaiirrmmeenntt  oonn  LLooaannss  aanndd  AAddvvaanncceess

Refer to Note 4.3 ‘Loans and advances’ 

Key audit matters 

How our audit addressed the matter 

The provision for impairment on loans and advances 
is a key audit matter because of the Group’s significant 
balance of loans and advances, the significant growth 
in  loan  balances  during  the  2023  financial  year,  and 
the significant judgement inherent in the provisioning 
model.  The  provisioning  model  is  determined  in 
accordance with the requirements of AASB 9 Financial 
Instruments.  

Provision  for  impairment  of  loans  and  advances  that 
exceed specific thresholds are individually assessed by 
cash 
reference 
management  with 
repayments  and  proceeds  from  the  realisation  of 
security. 

future 

to 

Other loans that do not have an individually assessed 
provision are assessed on a portfolio basis with loans 
with similar risk characteristics. 

Key areas of judgement included: 

•

•

The design of the expected credit loss model
used;
Assumptions used in the expected credit loss
model 
(for  exposures  assessed  on  an
individual  or  collective  basis)  such  as  the
financial  condition  of 
the  counterparty,
expected  future  cash  flows,  and  forward-
looking  macroeconomic  factors  (e.g.  GDP

100

To  address  the  risk  of  material  misstatement  and 
obtain  sufficient  audit  evidence,  we  performed  the 
following  procedures  over 
for 
impairment on loans and advances: 

the  provisions 

•
•

•

•

•

•

•

the

the  assumptions  within 

Assessed the governance oversight;
Reviewed  and  tested  the  calculation  of  the
expected  credit  loss  model,  including  the
specific  provision,  collective  provision  for
impairment and management overlays;
Considered 
management overlays;
Ensured the methodology for write off of debt
was consistent with prior periods;
Tested  the  accuracy  of  the  data  used  to
calculate the provision;
Reviewed  a  sample  of  current  arrears
balances and reviewed follow up procedures,
including  whether  specific  financial  assets  in
arrears had been appropriately provided for;
and
Reviewed  management  assessments  of
provision 
loans  that  exceed  specific
thresholds.

for 

We  also  assessed  the  on-going  impact  of  regulatory 
changes on the provision for impairment on loans and 

MyState LimitedAnnual Report 2023Key audit matters 

How our audit addressed the matter 

advances,  specifically 
Standard APS 220 Credit Risk Management. 

the 

impact  of  Prudential 

We  considered  the  impact  of  the  growth  in  loan 
balances on credit risk and tested the internal control 
environment that supports lending. 

of 

incorporation 

growth,  unemployment  rates,  central  bank 
interest rates); 
forward-looking
The 
information  to  reflect  current  or 
future
external factors, specifically judgments related
to  current  economic  uncertainty,  both  in  the
multiple  forward-looking  scenarios  and  the
probability  weighting  determined  for  each  of
these scenarios
The  design  of  the  management  overlays
applied  in  response  to  significant  economic
events; and
The stress test modelling undertaken to verify
provisioning levels.

•

•

•

OOtthheerr  IInnffoorrmmaattiioonn  

The  directors  are  responsible  for  the  other  information.  The  other  information  comprises  the 
information  included  in  the  Group’s  annual  report  for  the  year  ended  30  June  2023,  but  does  not 
include the financial report and our auditor’s report thereon.  

Our opinion on the financial report does not cover the other information and accordingly we do not 
express any form of assurance conclusion thereon.  

In connection with our audit of the financial report, our responsibility is to read the other information 
and, in doing so, consider whether the other information is materially inconsistent with the financial 
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.  

If, based on the work we have performed, we conclude that there is a material misstatement of this 
other information, we are required to report that fact. We have nothing to report in this regard.  

RReessppoonnssiibbiilliittiieess  ooff  tthhee  DDiirreeccttoorrss  ffoorr  tthhee  FFiinnaanncciiaall  RReeppoorrtt  

The directors of the Company are responsible for the preparation of the financial report that gives a 
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 
and for such internal control as the directors determine is necessary to enable the preparation of the 
financial report that gives a true and fair view and is free from material misstatement, whether due to 
fraud or error.  

In preparing the financial report, the directors are responsible for assessing the ability of the Group 
to continue as a going concern, disclosing, as applicable, matters related to going concern and using 
the going concern basis of accounting unless the directors either intend to liquidate the Group or to 
cease operations, or has no realistic alternative but to do so.  

AAuuddiittoorr’’ss  RReessppoonnssiibbiilliittiieess  ffoorr  tthhee  AAuuddiitt  ooff  tthhee  FFiinnaanncciiaall  RReeppoorrtt  

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is 
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that 
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that 
an audit conducted in accordance with the Australian Auditing Standards will always detect a material 

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101

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Independent auditor’s report continued

misstatement when it exists. Misstatements can arise from fraud or error and are considered material 
if,  individually  or  in  the  aggregate,  they  could  reasonably  be  expected  to  influence  the  economic 
decisions of users taken on the basis of this financial report. 

As  part  of  an  audit  in  accordance  with  the  Australian  Auditing  Standards,  we  exercise  professional 
judgement and maintain professional scepticism throughout the audit. We also:  

•

Identify and assess the risks of material misstatement of the financial report, whether due to
fraud  or  error,  design  and  perform  audit  procedures  responsive  to  those  risks,  and  obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not  detecting  a  material  misstatement  resulting  from  fraud  is  higher  than  for  one  resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.

• Obtain  an  understanding  of  internal  control  relevant  to  the  audit  in  order  to  design  audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Entity’s internal control.
Evaluate  the  appropriateness  of  accounting  policies  used  and  the  reasonableness  of
accounting estimates and related disclosures made by management.

•

• Conclude  on  the  appropriateness  of  management’s  use  of  the  going  concern  basis  of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Entity’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures  are  inadequate,  to  modify  our  opinion.  Our  conclusions  are  based  on  the  audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Entity to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures,  and  whether  the  financial  report  represents  the  underlying  transactions  and
events in a manner that achieves fair presentation.

•

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible  for  the  direction,  supervision  and  performance  of  the  Group  audit.  We  remain
solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned 
scope and timing of the audit and significant audit findings, including any significant deficiencies in 
internal control that we identify during our audit. 

We  also  provide  the  Directors  with  a  statement  that  we  have  complied  with  relevant  ethical 
requirements regarding independence, and to communicate with them all the relationships and other 
matters that may reasonably be thought to bear on our independence, and where applicable, related 
safeguards.  

From the matters communicated with the Directors, we determine those matters that were of most 
significance in the audit of the financial report of the current period and are therefore the key audit 
matters. We describe these matters in our auditor’s report unless law or regulation precludes public 

102

MyState LimitedAnnual Report 2023p
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disclosure about the matter or when, in extremely rare circumstances, we determine that a matter 
should not be communicated in our report because the adverse consequences of doing so would 
reasonably be expected to outweigh the public interest benefits of such communication. 

RReeppoorrtt  oonn  tthhee  RReemmuunneerraattiioonn  RReeppoorrtt  

OOppiinniioonn  oonn  tthhee  RReemmuunneerraattiioonn  RReeppoorrtt  

We have audited the Remuneration Report included in the Directors' Report (pages 35 to 52 of this 
Annual Report) for the year ended 30 June 2023. 

In our opinion, the Remuneration Report of MyState Limited, for the year ended 30 June 2023 
complies with section 300A of the Corporations Act 2001. 

RReessppoonnssiibbiilliittiieess  

The  Directors  of  the  Company  are  responsible  for  the  preparation  and  presentation  of  the 
Remuneration  Report  in  accordance  with  section  300A  of  the  Corporations  Act  2001.  Our 
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted 
in accordance with Australian Auditing Standards. 

WWIISSEE  LLOORRDD  &&  FFEERRGGUUSSOONN  

NNIICCKK  CCAARRTTEERR  
Partner 
Date: 18 August 2023 

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103

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholder information

Voting rights
In accordance with the MyState Limited Constitution, a shareholder is entitled to exercise one vote in respect of each fully paid 
ordinary share held.

Range of units at 17 August 2023
The Company’s quoted securities on the ASX (ASX Code: MYS) are ordinary fully paid shares.

Range

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 and over

Rounding

Total

Unmarketable parcels

Minimum $500.00 parcel at $3.5300 per unit

Top holders (grouped) as at 17 August 2023

Total holders

Units

% units

51,302

21,559,109

3,405

1,322

1,298

8,769,055

9,647,810

29,454,576

53

40,163,885

19.67

8.00

8.80

26.88

36.65

0.00

57,380

109,594,435

100.00

Minimum 
parcel size

142

Holders

671

Units

38,489

Rank Name

Units

% Units

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED

CITICORP NOMINEES PTY LIMITED

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

NATIONAL NOMINEES LIMITED

SELECT MANAGED FUNDS LTD

MR BRIAN DAVID FAULKNER

BEECHWORTH HOLDINGS PTY LTD 

BNP PARIBAS NOMS PTY LTD 

MR KENNETH JOSEPH HALL 

PRESTIGE FURNITURE PTY LTD

IOOF INVESTMENT SERVICES LIMITED 

STANBOX NO 2 PTY LTD

NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>

HORRIE PTY LTD 

MRS WENDY JEAN FAULKNER

ECAPITAL NOMINEES PTY LIMITED 

NETWEALTH INVESTMENTS LIMITED 

DONETTA PTY LIMITED

MR SIMON HENRY LUDDINGTON

20

MRS JOAN ELIZABETH EVERSHED

Totals: Top 20 holders of ordinary fully paid shares (total)

Total remaining holders balance

9,237,711

8,859,859

5,951,817

1,363,847

1,225,960

1,026,000

1,000,000

730,457

684,588

595,000

569,825

540,000

538,262

418,905

411,864

393,645

354,270

350,000

312,666

312,547

8.43

8.08

5.43

1.24

1.12

0.94

0.91

0.67

0.62

0.54

0.52

0.49

0.49

0.38

0.38

0.36

0.32

0.32

0.29

0.29

34,877,223

74,717,212

31.82

68.18

Unquoted securities
A total of 588,308 unquoted performance rights issued pursuant to the company’s employee incentive scheme (ASX code: 
MYSAC) are held by 11 people.

104

MyState LimitedAnnual Report 2023Corporate directory

Registered Office
MyState Limited 
ABN 26 133 623 962
Level 2, 137 Harrington Street
Hobart TAS 7000

Phone: 138 001

Website: mystatelimited.com.au

Email: info@mystatelimited.com.au

Company Secretary
Scott Lukianenko

Share Registry
Computershare Investor Services
GPO Box 2975EE
Melbourne VIC 3000

Phone: 1300 538 803

Overseas callers: +61 3 9415 4660

Website: computershare.com.au

Auditors
Wise Lord & Ferguson
Level 1, 160 Collins Street
Hobart TAS 7000

Australian Securities 
Exchange Listing
MyState Limited is listed on the 
Australian Securities Exchange under 
the code MYS.

MyState Bank
ABN 89 067 729 195

Phone: 138 001

Website: mystate.com.au

Email: info@mystate.com.au

TPT Wealth
ABN: 97 009 475 629

Phone: 1300 138 044

Website: tptwealth.com.au

Email: info@tptwealth.com.au

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105

MyState LimitedAnnual Report 2023 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
mystatelimited.com.au