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Our results are the culmination of almost a decade’s work to strategically position ourselves as the best retail financial institution in Australia.

Thursday 29 September, 2016.

Newcastle Permanent has released its annual results to 30 June 2016 showing 11.5% growth in its home loan portfolio – almost twice as much as national system growth of 6.7% – marking an exceptional year for Australia’s largest building society. Supporting the superior home loan portfolio growth, retail deposits grew by 9.9%. 

“Newcastle Permanent operates entirely for the benefit of our customers, who are also our owners, and this year we’ve increased the total value we generated for our customers to $95.6 million, an increase of 7.8%. This value is comprised of $40.9 million net profit after tax and $54.7 million in Mutuality Dividends – which is the value our customers receive by doing their banking with us rather than the major banks,” Chairman Michael Slater said. 

“Newcastle Permanent remains the strongest customer-owned financial institution in Australia in terms of net assets, total assets of almost $10 billion and credit ratings unsurpassed by any other mutual,” he added. 

Newcastle Permanent’s Tier 1 Capital Ratio of 18.86% is significantly higher than the major banks’ and the minimum capital requirement imposed by the banking regulator. 

CEO Terry Millett said the results were the culmination of almost a decade’s work to strategically position Newcastle Permanent as the best retail financial institution in Australia. 

“The 2015/16 period challenged all financial institutions with ongoing margin pressure caused by lending and capital regulation as well as historically low interest rates and intense competition. Our results show the strength and competitiveness of our customer value proposition, and the ongoing sustainability and relevance of our customer ownership model providing relief for customers within a market dominated by a gang of profit-hungry major banks,” he said. 

“One of the important markers for Newcastle Permanent is our customer satisfaction score, which remains at least 10 points clear of the best performing major bank again this year, recorded at 92.3% by Roy Morgan in June 2016. We refinanced more than half a billion dollars in home loans from the major banks last year, showing that customers are voting with their feet for a better way of banking with us. 

Mr Millett added, “Newcastle Permanent’s strong financial results are balanced by our ongoing community sponsorship program which invests more than $1.5 million in our local communities every year and benefits thousands of families in regional NSW, plus almost $60,000 in staff donations to local charities.”

The results will be tabled at Newcastle Permanent’s AGM on Friday, 28 October 2016.

2015/16 financial year highlights

  • Home loan portfolio grew by 11.5% to $7.86 billion compared with national system growth of 6.7%. 
  • Newcastle Permanent refinanced more than $671 million in home loans from the major banks. 
  • Retail deposits grew by 9.9% to $7.07 billion. 
  • Tier 1 Capital Ratio of 18.86%. 
  • Achieved customer satisfaction score of 92.3% as measured by Roy Morgan, June 2016. 
  • Total achieved customer value of $95.6 million, made up of $54.7 million in mutuality dividend (the additional product value delivered to our customers compared to the equivalent products at the major banks) plus $40.9 million net profit after tax. 
  • Exceptional home loan credit quality with 90+ day arrears rate of just 0.13%. 
  • The largest customer-owned banking institution based in NSW with total assets of almost $10 billion (as at 30 June 2016), making Newcastle Permanent one of the top 20 Australian retail banking institutions. 
  • Financially the strongest customer-owned banking institution in Australia based on net assets and credit ratings. Long term credit ratings have been re-affirmed by two major international credit rating agencies and are unsurpassed by all other building societies and mutual banks. 
  • A further $7.8 million investment in projects and capital expenditure to strengthen IT infrastructure, enhance the customer value proposition, and adhere to changing regulatory requirements. 
  • Community Support Program invested more than $1.5 million in community sponsorships to entertain and enrich the community through a range of family-friendly initiatives.

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*Each year the additional financial benefit customers receive by banking with Newcastle Permanent rather than holding the equivalent products at one of four major banks is calculated by CANSTAR - one of Australia’s leading financial services research firms. This benefit is called the ‘Mutuality Dividend’ and this year our customers received $54.7 million in value as a result of banking with Newcastle Permanent rather than one of the four major banks.