Morningstar says cost savings from Auswide merger to boost profit growth for Australia's MyState

Morningstar expects strong earnings growth for MyState MYS.AX in fiscal 2026 and 2027, with cost savings from the February 2025 acquisition of Auswide Bank underpinning the earnings growth forecasts

However, the market is likely awaiting further progress on cost-out from merger integration, adds the investment research firm

"One step toward achieving up to A$25 million ($16.67 million) in pretax cost savings was MyState handing back the Auswide banking license to the Australian Prudential Regulation Authority" - Morningstar

Morningstar expects the financial services firm's poor cost/income ratio of 68% in fiscal 2025 to improve to 60% by fiscal 2030, mostly driven by merger cost savings

While MYS lacks the scale of its much larger competitors, Morningstar says it could be a potential acquirer of even smaller lenders struggling to meet regulatory and compliance requirements, and the technology spending required to meet customer expectations

YTD, stock up 1.8%

($1 = 1.4997 Australian dollars)