Takeover target St George Bank Ltd says it remains on track to meet its earnings growth target for fiscal 2008 and that its credit quality remains strong.
Chief executive Paul Fegan told the UBS Australian Financial Services Conference on Thursday that the bank's retail deposit balances are continuing to grow.
As at May 31, deposits had grown by 12.4 per cent on an annualised basis.
Residential receivables growth for the eight months was 10.1 per cent, annualised.
"St George is on track to grow broadly in line with system," he said according to notes of his speech filed with the Australian Securities Exchange.
"St George expects growth to slow from current levels in line with the moderation in system growth."
St George remained on track to meet its earnings per share growth target of eight to 10 per cent for the year, he said.
Mr Fegan said credit quality in the retail banking arm remained excellent, with arrears performance particularly strong.
St George continues to have no exposure to US or domestic sub-prime lending, collateralised debt obligations or hedge funds.
Overall credit quality in business banking also remains strong, he added.
About 95 per cent of the bank's portfolio is secured with greater than 80 per cent secured by property.
But managed funds balances had fallen by 9.5 per cent during in the eight months ended May and the bank said balance growth in the 2008 fiscal year will continue to reflect the performance of investment markets.
Mr Fegan said St George also remained on track to meet its other targets around cost to income, capital, credit quality and customer satisfaction as outlined in its 2008 first half results.
Westpac, led by former St George chief executive Gail Kelly, has launched an all scrip offer for St George worth around $17 billion.
The banks in May signed a merger implementation agreement and the St George board plans to recommend the merger, subject to an independent expert's report confirming it is in the best interests of shareholders.
St George shareholders will receive a scheme booklet, including the report, in October.
