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Great Southern Bank grows lending to first time buyers in strong first half

24 March 2022

  • Loans settled up 89.4 per cent on the prior first half result to $2.67 billion
  • Net interest income up 3.0 per cent to $148.69 million
  • Great Southern Bank doubled its market share for first home buyers year-on-year
  • Home loan portfolio growth was 1.8 times system growth
  • Consolidated assets up 5.1 per cent for the six months, closing at $17.12 billion
  • Retail customer deposits increased 4.3 per cent for the half year to $11.75 billion
  • Group net profit after tax of $15.7 million for continuing operations1

Australia’s largest customer-owned bank, Great Southern Bank, has doubled its market share and lending to first time buyers from a year earlier, bucking industry trends and aligning to its purpose of helping all Australians own their own home.

Great Southern Bank increased its monthly home lending to around $160 million in December 2021, up from $80 million in December 2020, while industry lending to first time buyers fell 10 per cent over the same period. The bank now supports around two per cent of the first-time buyer market – double the share it held a year earlier.

Key results in the first half of the financial year include 6.2 per cent growth in total loans under management which passed $14 billion for the first time and adding a further 5,100 active customers.

Retail deposits grew 4.3 per cent over the half-year, in line with lower consumer spending due to COVID-19 and the bank’s competitive savings offerings. Net profit after tax (NPAT) was $15.7 million for the bank’s continuing operations, reflecting the challenging market and more deliberate focus on its banking business.

“As a customer-owned bank, it’s our responsibility to help with the great financial challenge for this generation – owning your own home,” said Paul Lewis, CEO and Managing Director of Great Southern Bank.

“Thanks to our strong, sustainable financial performance we are making a meaningful, positive difference in the lives of more Australians, and helping them achieve their dreams of home ownership.

“As a customer-owned bank, it’s important to make sustainable profits to help grow our business, but we don’t need to maximise profits for shareholder benefit. Nonetheless, this is a challenging operating environment characterised by increasing regulation and compliance costs, a competitive market and ongoing pressure on funding costs and margins. We expect to see continued pressure on profitability into the second half.

“Much of our work has been in support of the Government home ownership schemes. Through these schemes – namely the First Home Loan Deposit Scheme, the New Home Guarantee and the Family Home Guarantee - Great Southern Bank has helped around 3,000 people to buy their own home over the past two years.”

Following its successful rebrand in June 2021 and the sale of its health business completed in October 2021, the bank has strengthened the focus on its core banking operations. The new brand in particular is increasing the bank’s appeal among a younger demographic who will carry the torch for customer-owned banking for future generations.

“The average age of new customers is under 30, around 20 years younger than the average age of our overall customer base [49 years old],” Mr Lewis said. “That’s encouraging - we rebranded to ensure our relevance to future generations, as our research showed that 70 per cent of millennials didn’t know what a credit union is. Attracting this younger audience is a strong sign that we are moving in the right direction.”

Investments in technology like the new Lendfast home loan origination system have also delivered increasing operational efficiency, allowing the bank to grow its lending, while effectively managing costs.

“Crucially, the ‘time to yes’ – or the average time taken to unconditionally approve a loan - is down to two days for many loans, which is great news for our customers and our growing network of brokers,” Mr Lewis said.

“Our investment in technology in previous years has put us in a good position. We’re agreeing a higher number of home loans in a significantly reduced period of time. Our home lending grew at 1.8 times system growth thanks to the strength of our offering and the way our rebrand is resonating with first time buyers and refinancing Australians.

“As most people choose a home loan via mortgage brokers, their support is crucial to our success. It’s incredibly pleasing to see that by December 2021 over three quarters [77 per cent] of our home loans were being arranged by brokers, up from half [56 per cent] in December 2020. We are deep in negotiations to add new aggregators – and thousands of new brokers – to our network in the coming months.

2021 independent recognition:

  • Most Recommended First Home Buyers Loan - DBM Australia Financial Awards  
  • Exceptional Everyday Account: Everyday Snap Account - Mozo Experts Choice
  • Best Bank Account Award: Everyday Snap Account - RateCity Bank Account Awards
  • Best Kids Saving Account: Youth eSaver - RateCity Bank Account Awards
  • Best Regular Savers Account: eSaver Reward - RateCity Bank Account Awards  
  • Best Mutual Lender - RFI Group Australian Lending Awards

View our complete list of awards

About Great Southern Bank

For over 75 years, we’ve been putting our customers first, and today we look after the financial and insurance needs of more than 375,000 Australians. We have changed our name from CUA to Great Southern Bank but we remain customer owned and firmly focused on helping all Australians own their own homes.

1 Net profit after tax for the group excludes items relating to discontinued operations.