MyState Continues Loan and Margin Growth, Coronavirus Provisions Wound Back

No-moat-rated MyState’s first-half fiscal 2021 profit bounced back 13% to AUD 17 million. The result and outlook exceeded our expectations. Loan impairments look likely to be lower than first feared, margins are better than expected on an influx of customer deposits, and operating costs are being well managed. We have raised our fiscal 2021 net interest income and operating income forecasts by 5% and 9%. Our fair value estimate increases 4% to AUD 5.20 per share on better short-term earnings and the time value of money. MyState is currently fairly valued.