Sweating assets and keeping a grip on costs, Defence Bank has produced a profit at the upper end of the range for the mutual banking sector in 2022.

Its net profit of A$16.7 million was up 20 per cent on 2021, for a return on equity of 7.9 per cent, up 80 basis points.

The return on assets was 0.54 per cent - at the top end of the range for the mutual banking sector.

“We just focus on delivering a sustainable year on year performance,” David Marshall, the CEO said.

“A lot of these organisations do these massive transformations, but don’t realise them.”

“We see our partners as family,” he said, thinking of its systems provider Data Action and payments provider Cuscal.

Defence’s loan book increased 7 per cent to $2.7 billion and the deposit book increased 8 per cent, both slightly ahead of system.

The profit benefited from a revaluation of Defence’s holding in Cuscal shares.

Marshall said: “On mergers, we don’t have an appetite for consolidation at this point [though] ongoing regulation will drive mergers.”