I would now like to hand the conference over to Mr. Milos Sulisic, Managing Director and CEO. Please go ahead.
Good morning, everybody, and thanks for joining us for the full year 'twenty one. I'm Milos Sublasi, Managing Director and CEO, and also on the call with me is Gary Dickson, our CFO. We spoke to the investor presentation lodged with the ASX earlier this morning, which is also available on our website. You can see from the agenda on Page 2 that I'll provide a brief business update before handing over to Gary to take you through the financial results in detail, including the details behind our nearly 20% growth in net profit after tax earnings per share and our strong capital strategy. I'll then outline our 2025 growth strategy and outlook.
And as usual, we'll welcome questions at the end of the presentation, and the call operator will moderate these questions. So first, the business overview and key highlights on Page 4, just like to provide a quick recap of the tremendous evolution that LifeStation made over the past 5 years. In a very disciplined and deliberate manner, we've transformed from a branch based credit union to a customer base that was largely concentrated in Tasmania to now bring a digital bank with an increasingly geographical diverse customer base. Today, our new customer origination is increasingly being done online. Our processes are more customer focused.
We're driven to provide account opening, account servicing and transaction processes at the forefront of what customers are looking for in today's world. We've also simplified and digitized our processes, making them more intuitive and faster and have artificial intelligence enabled customer insights that we deliver to our customers to help them manage their financial well-being. All of this means our customers find us easy to deal with, leading to deeper and longer lasting relationships. On Page 5, you can see that as a result of our evolution, we're now incredibly well positioned for accelerated growth. Over many years, we've achieved consistent above system loan and deposit book growth, and we now have 60% of our home loan book on Mainland Australia, a big change from a few short years ago.
And pleasingly, with this, we have continued to grow our Tasmanian book. Our 2024 is going to accelerate our growth profile. This bold strategy builds on our strong financial position and demonstrated execution capability and our leading customers when they're promoted to school via our digital offering. Our recent share placed $5,000,000 gives us the balance sheet strength and flexibility to rapidly accelerate growth across both our banking and wealth management businesses. The key highlights on Page 6 show that we've delivered an outstanding result for the 2021 financial year, a period in which we saw a considerable operating environment.
Now with our recent strategies with a focus on driving strong customer acquisition through increased marketing and sales investment, deliberate, disciplined and focused investment in digital innovation, a laser like view on managing operating expenses, while maintaining a culture obsessed with delivering positive customer experiences and a continuous eye on driving the cultural transformation required to manage a bank in a modern world. You'll see evidence of these in the presentation this morning. And as you can see here, our headline KPIs continue to head in the right direction. Net profit after tax increased 20.9 percent to $36,300,000 while earnings per share increased 19.2 percent to $0.132 sorry, dollars 0.39.2 a share. Operating expenses were managed carefully, leading to the cost to income ratio, excluding 1 off restructuring costs, decreasing 153 basis points to 61.3%.
Our net interest margin increased by 10 basis points to 1.96%, underpinned by increasing customer deposits and lower funding costs. Customer deposits were up 13.2% over the past 12 months, helped by our award winning bonus MyState Bank Bonus Saver account, up 3 19% since June last year. All of these initiatives saw us achieve peer leading return on tangible equity of 14.1%, up 133 basis points on the previous corresponding period. It's important to note that these good figures were possible due to the trust our customers place in us because we focus on near interest and needs and our increasing ability to attract new customers as a result. Over the past year, we've welcomed 17,000 new customers and this number is continuing to increase on a rolling 12 month basis.
We continue to be one of the customer advocacy leaders in the sector with a customer net promoter score of +47. Ongoing investments in new marketing initiatives will further support this growth going forward. With a customer funding ratio of a healthy 73.4%, we can comfortably support growth. Other savings also allowed us to increase our marketing investment along the X and C Board. So we've witnessed our digitalization strategy, which has transformed MyState into a digital, scalable business and positioned us so well for the future.
It's changed the way our customers interact with us, and the continuing growth in online banking has enabled us to expand their online services, offer more intuitive and innovative products and services and reduce the number of branches we operate as customers continue to move to digital service offerings. Turning to Slide 7, you can see more on our key metrics and performance trials, 6% over the year to $5,600,000,000 led by an uplift in second half applications and settlements. You can see from the graph on the right that my stake return on equity compares well to peers, significantly higher than other regional banks. The directors have declared a foreign dividend of $0.13 per share fully tranked, taking the full year dividend to $0.255 a share. All of this shows that our multiyear transformation journey is really bearing fruit, and we're well placed to harness this increased momentum because we now have the fundamental structures in place that allow us to take advantage of evolving market conditions and customer needs.
I'll talk to the outlook and strategy shortly, but for now, I'll hand over to Gary to take you through the financial detail.
Thanks, Nelson. Good morning, everyone. Moving to the results summary on Slide 9. All key financial metrics have moved positively during the year, and we remain pleased with the underlying momentum of the business in what has been a challenging, albeit more positive than expected, external environment. Total operating income was $138,500,000 up 7.5% on the prior year, benefiting from balance sheet growth, disciplined margin management, a significant increase in retail deposits and lower wholesale funding costs.
Net interest margin for the year of 1.96% was up 10 basis points on FY 'twenty's level of 1.86%. That's despite a challenging environment with increased competition in the low risk owner occupied lending market for the loan devaluation ratio of less than 80%, which we target. Operating expenses, excluding restructure costs, increased 4.9%, resulting in positive jaws at a similar level to that experienced in FY 'twenty. The cost to income ratio improved by 153 basis points to 61.3 percent with the benefits of process reengineering and automation driving improved operating margin. As I mentioned, we achieved around 20% growth in both net profit after tax and EPS for the year, with net profit up 20.9 percent to CNY 36,300,000 and EPS up 19.2 percent to $0.392 per share.
The Board have declared a final dividend of $0.13 per share. My state remains comfortably capitalized above regulatory minimums with a total capital ratio on 30 June 2021 of 14.8%. Slide 10 shows the key drivers of the 20.9% increase in statutory net profit after tax after allowing for restructure costs incurred in closing 4 bank branches in Central Queensland and a reorganization of the TPT Wealth Business. Net interest income benefited from a higher average balance sheet, lower funding costs and focused margin management. Wealth management income declined due to lower average funds under management, partly reflecting the impact of COVID-nineteen on investment markets in the Q2 of calendar year 2020 and lower trust fees.
Debt expense was $5,900,000 lower with the prior period expense of $4,900,000 reflecting in part the increased 90 plus days of these at 30 June 2020, but principally a significant increase in the forward looking economic overlay in response to the uncertainty created by the COVID-nineteen pandemic. The current period writeback of $1,000,000 was a result of reduced arrears and the improved economic outlook, in particular for unemployment and house prices. On Slide 11, you can see we continue to manage operating cost growth while maintaining ongoing investment in our capability, marketing and digitization program. The uplift in marketing spend of $1,100,000 during the year has contributed to customer acquisition, particularly retail deposits, as we build the bank's franchise on Australia's Eastern seaboard. Digital marketing is enabling us to reach a broader population with new online and mobile products.
Restructuring costs of $2,600,000 are from the closure of MyState Bank's 4 Central Queensland branches and 2 branches in Tasmania, along with rationalization of corporate office locations in Tasmania. The resulting annualized savings of approximately $2,100,000 continue to be reinvested in growth related initiatives across MyState Bank and TpT Wealth. There are now 7 branches continuing to service Tasmania with the broader Australian customer base serviced entirely by digital platforms and supported by the Tasmanian based customer care center and 3rd party services such as those provided by Australia Post. Personnel costs in FY 2020 benefited from the forfeiture of short term incentives due to the impacts of COVID-nineteen. In 2021, we've also selectively grown distribution capability across Tasmania, Victoria and the leadership programs for the senior management team.
Turning to the next slide, our loan book growth was above system in FY 2021 led by home lending of 1.3x system and up 6.8 with a significant increase in applications and settlements in the second half of the financial year. The chart at the top right shows that both applications and settlements were up strongly on the prior year, while the chart below which take up the majority of our loan book. We have maintained our focus on low risk owner occupied lending with a loan to valuation ratio of less than 80%, while also continuing to be a strong supporter of the 1st home loan deposit scheme. We've continued our solid momentum into FY 'twenty two with home loan applications up 69% in Q4 FY 2021 relative to PCP. Going forward, maintaining quality lending growth remains a key focus.
With the market loans having changed dramatically in recent years with the growth in the number of monoline providers combined with the shift in consumer preference to buy now pay later products, most states ceased originating personal loans at the end of May. Customer needs for personal loans are now satisfied by a referral arrangement in a similar manner to that of general and health insurance. Slide 13 highlights the continued high credit quality underpins our balance sheet strength. As I mentioned previously, we continue to focus on low risk owner occupied lending with an LVR of less than 80% and the growth in greater than 90% LVR loans reflects our ongoing support of the first time loan deposit scheme. At 30 June, loans of prior COVID-nineteen related assistance that are currently receiving further assistance now only account for 0.2% of the book.
In the appendix, we have provided an update on the level of assistance provided to customers following the latest delta outbreak and subsequent lockdowns across Mainland Australia. As of 16th August, 56 customers had sought assistance, the majority of whom are based in New South Wales. While the Australian economy has performed more strongly than expected over the past year with strong house price growth and declining unemployment levels, the ongoing disruption caused by the pandemic is expected to continue to impact High State Bank will continue to support impacted customers over the coming months. Our 3rd and plus day arrears remain considerably below industry benchmarks for both the major and regional banks. On the next slide, the chart on the top right highlights that approximately 73% of our funding is sourced from customer deposits.
Our funding mix continues to be enhanced by growth in lower cost at core deposits, which increased 49% on the prior year. We've also seen significant growth in our award winning Bonus Saver account, which was up 3 19% since 30 June 2020 due to increased online acquisition. Its fee free savings account was awarded a 5 star rating by Canstar and received Mozo's Experts Choice Award. In June 2021, we issued senior unsecured medium term notes totaling CAD 50,000,000 for the first time. And by 30 June 2021, we had fully drawn down our allowance under the RBA's term funding facility.
MyState Bank's reliance on securitization reduced during the year as a result of the increase in customer deposits. It remains an important component of the funding mix and is expected to contribute around 20% to 23% of the bank's funding for the foreseeable future. Slide 15 shows that while my state continues to operate in a highly competitive market, focused management of deposit rates and lending rates and lower wholesale funding costs have driven an improvement in net interest margin of 10 basis points on FY 2020. The RBA has reduced the cash rate by 140 basis points since early June 2019 with flow on effects to both the earning rate on assets and the cost of funding. Term deposit margins continued to reduce as the book rolled to lower rates following RBA cash rate changes.
Our bonus saver account generated strong inflows and we continue to benefit from increased liquidity across the system due to the broad package of federal government initiatives to support the economy. While the lending market remains highly competitive, our lending book continues to grow as a result of the bookings Tasmania reaching a record high of over $2,100,000,000 and ongoing diversification across the Eastern seaboard. Exit NIM in the month of June was 1.89%. Looking forward, we expect net interest margin to remain under pressure with competition in the home loan market intensifying with lower funding costs which will contribute in the period ahead. Turning to capital on Slide 16.
MyState remains well capitalized with all capital ratios comfortably above regulatory minimums. The group's total capital ratio on 30 June 2021 was 14.84%, an increase of 183 basis points on the prior year. Our common equity Tier 1 ratio and Tier 1 ratio is 13.08%. The proceeds of our May capital raise will be deployed to rapidly accelerate our deposit and net income growth. Our capacity to issue on Tier 1 capital and further Tier 2 capital and securitization will provide further capital flexibility going forward.
Moving to Wealth Management on the next slide. From a financial perspective, TpT Wealth had a disappointing year. Income from Wealth Management activities was $2,200,000 or 14% lower than the prior year, driven by lower fees from trustee related services and management fees. Our funds under management grew 3.4% during the year and closed at just over $1,100,000,000 driven by growth in our income funds, average funds under management were approximately 4.5% lower than the prior year. Significant restructuring initiatives have been undertaken in CPT Wealth over the past 2 years with fund administration and fund accounting outsourced, investment management for TpT Wealth's growth funds outsourced and TpT Wealth's core lending and trustee systems replaced.
In early 2021, we enhanced our distribution capability to drive growth on the Eastern seaboard, while remaining focused on the strong competitive position TPT Wealth commands in Tasmania. Subleasingly, our fixed term was recently in order of the force which the significant change agenda is now broadly complete and will enable efficiency benefits as the business gains scale. Almost onethree of our investors are transitioning to our new digital portal, and we are looking to further differentiate returns across our range of funds by enabling investment in longer term assets with the potential to generate improved yield for investors. I'll now return you to Mill to talk about our strategy and future outlook.
Thanks very much, Gary. Turning to Page 19. Whilst many of the macro challenges continue with the ongoing effects of COVID-nineteen, creating a more volatile business environment, MyStat remains well positioned for continued growth. Our focus remains on continually simplifying, automating and improving productivity to enable us to invest and innovate to grow retail deposits, home loans and our managed fund investment products. In terms of specific challenges, we've outlined targeted responses to enable us to accelerate our growth trajectory.
For example, our simple, easy and low tuck origination processes mean that we're well placed in a competitive environment to grow retail deposit funding efficiently. Our simplified business model, and continuous increase in automation addresses challenges posed by increasing regulatory requirements. And because we're a trusted aircraft customers, we're able to challenge of changing our and increasing customer demands. Despite a more volatile environment, we believe we can confidently grow market share, and indeed, we're well placed to do so. More recently, we've seen a solid and sustained increase in our Tasmanian book.
At the same time, there's a significant and sustained increase in home loan applications in Mainland Australia. This will move to settlements and increasing book growth in the period ahead. Slide 20 summarizes our 2025 strategy. Our overarching ambition is to grow our share in deposits, lending and fund. Our focused strategy will enable us to deliver on this by building on our achievements so far.
Our strong financial position, demonstrated execution capability and leading customer in the promoter store. The 2025 strategy is also underpinned by our 4 strategic priorities of customer experience and acquisition, increased distribution capacity, enhanced increasingly productive operations and significant expenditure on culture and capability development. The acceleration of our growth strategies across both banking and wealth management will enhance our evolution as a digital bank and funds management business. This in turn means our growing customer base across Eastern seaboard will find that MyStack is easier, more trustworthy and intuitive to deal with, allowing us to achieve deeper relationships with our customers. In closing, on Slide 21, we're currently focused on rapidly accelerating our balance sheet and improving our operating leverage in line with business growth.
We're targeting ROE accretion over time as new capital is deployed. In FY 'twenty two, we expect earnings per share and ROE will be diluted while this new capital is being deployed, and we also expect operating expenditure, particularly marketing and sales investment, will rise to support growth. We've transformed the business and remain extremely well placed to take advantage of that. We commenced the new financial year in a strong position, and the operational efficiencies that we've made in rest of the years are enabling their growth to accelerate. On the Board that I'll be retiring at the end of this year, I've thoroughly enjoyed what will be 7.5 years of my state and firmly believe that the business is really set for significant growth in the near term.
But I also know that it's my time to hand the reins to someone else to drive the business. I'm absolutely thrilled to be able to deliver such a strong result and lead such a vibrant business as I close out my executive career. Now I'll now hand back to the operator, who will moderate the Q and A.
Thank you. There are no questions at this time.
I'll now hand it back
to Mr. Silasich for closing remarks.
Okay. Thank you very much for that. And no question has probably been such a very good result and everyone's comfortable with what they've seen. So thanks again for your time. If you do have any further than what we can do to assist you, good morning and have a great day.
Thank you for your attendance.