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Customer ‘flight to value’ boosts growth at customer-owned bank

  • The bank’s active customer base grew by 5.0% to 401,000.
  • Group Net Profit after Tax (NPAT) of $44.5m, placing the bank in a strong position to continue growing its customer offering
  • Supported 2.88% of all Australian first home buyers
  • Total home lending up 6.6%
  • Retail deposits up 9.0% to $13.0bn
  • Key savings products featured in top 5 market rates over 90 times*

Great Southern Bank is supporting a record percentage of the Australian first home buyer market and attracting high levels of customer deposits, the bank announced today in its full year results. Competitive pricing, service improvements and purpose-led strategy have all grown the appeal of the bank, which grew customer numbers by 5% for the year.

Key customer highlights included total home lending up by 6.6%, retail deposits up by 9.0% and the bank’s personal loan portfolio grew 7.7% against a contracting market. The bank’s home lending balances grew at 1.3 times system.

Great Southern Bank made a solid Group NPAT of $44.5 million, a result in line with average pre-COVID levels.

Paul Lewis, Managing Director and Chief Executive Officer at Great Southern Bank, said:

“We’re seeing a ‘flight to value’ as Australians seek out the best return on their money, and competitive home loan rates, at a bank that aligns to their own personal values.

“Our competitive rates and our participation in Government-backed home lending schemes is very attractive to customers looking to earn a high rate of return on their savings, or wanting to buy a home sooner by saving on the upfront costs.

“In line with our purpose of helping all Australians own their own home, we supported 2.88% of all Australian first home buyers last year, which is more than three times our overall home lending market share. At the same time, over the last 12 months our most popular savings products have been in the top five market rates over 90 times*.

“We now offer flexible interest rates on our personal loans that reflect each customers’ credit score, enabling us to compete with – and often beat – the biggest banks.

“Across the market we’re seeing this same pattern repeated - smaller banks like ourselves are growing faster than the major banks.”

The bank continued to improve its broker service even as it grew the number of brokers on its lending platform to over 6,200 (up by 32%). It was also first in the industry for on-time settlements, and was consistently rated in the top quartile among smaller banks for broker experience**.

Sustainable profits and future growth

“This is a strong profit - we’re seeing the benefits of ongoing investments and improvements in our services, in our home lending platform, and in the appeal of our rebranded bank. These profits are ultimately reinvested back into the bank for the benefit of our customers and to ensure our continued sustainability, as we face into a challenging external environment which will place pressure on margins in the coming year.”

Following the announcement of its partnership with fintech Constantinople earlier this year, the bank is continuing to build a digital-first bank offering in the micro-business market. The significant opportunity presented by the small business market was demonstrated through the bank’s recent growth in the segment, even ahead of launching its digital bank offering, with the bank increasing its new business lending to SMEs.

Support for customers

Home lending arrears remained relatively flat, increasing only 3 basis points to 0.24 per cent, demonstrating that to date, the majority of the bank’s home loan customers are managing higher interest rates and the rollover from low-rate fixed loans. The bank’s flexible approach to supporting its customers saw it provide changed repayment options to thousands of customers who needed temporary assistance.

Delivering on commitments to be a responsible bank

The bank continued to take major steps in addressing its environmental and social responsibilities, affirming its position as a credible, responsible banking alternative. In the past 12 months the bank has:

  • Provided $2 million in long-term financing to Victorian based not-for-profit housing provider National Affordable Housing (NAH) to support more households to buy a home, without needing to save a deposit, via the BuyAssist shared equity program.
  • Launched its second Financial Inclusion Action Plan (FIAP) to improve the financial wellbeing of customers, team members and communities, and completed all 35 actions from its inaugural Reflect Reconciliation Action Plan (RAP). Both the FIAP and RAP connect closely to the bank’s purpose by empowering stakeholders, including First Nations peoples, to live in a more financially secure environment, with greater control over their choice of home.
  • Committed $1 million to a three-year partnership with Mission Australia to fund energy and water efficiency measures which help social housing tenants reduce their emissions and save hundreds of dollars every year.
  • Taken positive steps towards reaching net zero emissions by 2040 – a key commitment in the bank’s Climate Action Plan - and retained its carbon neutral certification under Climate Active. Among other things, the bank has launched green personal loans to help customers reduce their emissions through the purchase of hybrid or electric vehicles and energy efficiency upgrades to their homes.

* Based on a weekly survey of four of Great Southern Bank’s most popular savings products, benchmarked against comparable products offered by competitors.
** June 2023 survey of brokers drawn from across the industry

About Great Southern Bank

For over 75 years, we’ve been putting our customers first, and today we look after the financial needs of more than 401,000 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.