December 28, 2006

Deutsche Bank initiates coverage of Home Building Society Limited

Deutsche Bank has initiated coverage of West Australian (WA) financial services provider Home Building Society Ltd (ASX: HME), with a Buy recommendation.

Research analyst, Douglas Farrell initiated coverage with an A$16.50 twelve month price target.

Mr Farrell said “Home Building Society presents both an exposure to West Australian lending growth, and the potential for earnings upside following the recent merger with StateWest.

“We believe the company will continue to capture market share by appealing to WA patriotism, providing high quality customer service and competitive products.

“Home also has the opportunity to drive further consolidation in the industry, and despite the significant hurdles to some of these transactions, we believe Home is the most natural and likely ultimate owner of the WA Police and Nurses, United Credit and University Credit unions,” he noted.

Home Building Society is a permanent building society based in Perth. It was established as a mutual society in 1946, and demutualised becoming listed on the Australian Stock Exchange in 2002. A recently completed merger with StateWest created an entity with over 110,000 customers and customer funds under management exceeding A$3.5 billion.

The company derives most of its revenues from providing residential mortgage lending, with approximately 90% of these housing loans concentrated in the greater Perth metropolitan area, which includes Mandurah. Home Building Society’s housing loan book has increased by 110 per cent over the last three and a half years.

Equity rating recommendations are based on expected total return (including dividends):

  • Buy: 10% or more over a 12-month period
  • Hold: between -10% and 10% over a 12-month period
  • Sell: -10% or worse over a 12-month period

For further information, please call:

Cathy Knezevic +61 2 8258 2792
Kate Abrahams +61 2 8258 2416

Deutsche Bank

Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With Euro 1,097 billion in assets and 67,474 employees in 73 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.