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2018 Annual Results

Newcastle Permanent tables market-leading position in annual results

Newcastle Permanent published its annual results for 2017-18 overnight, reporting strong profit, capital adequacy and portfolio growth figures, capped by market-leading customer satisfaction and meaningful community support.

Celebrating its 115th year, Newcastle Permanent recorded a $43.8 million net profit after tax, up by 12.4% on the prior year, despite one of the most complex regulatory environments faced by the banking industry to date.

Chair Jeff Eather said that amid the background of the Financial Services Royal Commission, Newcastle Permanent’s strong performance was testament to the benefits of its customer-owned banking model.

“This year has been one of high operational complexity for our organisation, and I’m pleased to report that despite this, we’re thriving, becoming more efficient and remaining highly focussed on customer value and community support.

“Our market-leading customer satisfaction, improved profit, and exceptionally strong capital position combine to show that we are well placed to continue serving our customers for the next 115 years,” Mr Eather said.

Mr Eather also cited the performance of outgoing CEO Terry Millett in leading the organisation to deliver a raft of strategic projects and enhance the value delivered to customers during his decade-long tenure in the role. 

“The Board is extremely proud of the work Terry and his team have done to achieve such consistent, market leading results while navigating the increasingly complex operating and regulatory environment and intense competition. 

“In the ever-evolving realm of retail banking, we’ve delivered a range of significant upgrades to systems, processes and services which enrich our customers’ experiences and make us a far more efficient business, while maintaining our suite of highly awarded and industry-leading products.”

Mr Millett said he was proud of the achievements of the entire staff during his time as CEO over the past 10 years, capped this year with exceptional, market-leading customer metrics. 

Boy on fathers shoulders holding a toy plane
Family leaning out car window

In 2018, we proudly celebrated our 115th year of providing better value banking for our customers, and keeping the big four banks honest along the way.

Because we’re 100% owned by our customers, and we don’t have any shareholders, all our profits go back into the business to provide market leading products and services, and support for our local communities. 

Let’s take a look at some of our performance highlights.

We were rated the number one Australian financial institution for customer satisfaction in June*.

Having Australia’s happiest banking customers shows that our way of banking, that puts people before profits, is the way banking should be.

And to top it off, we took out Australia’s Home Lender of the Year and were crowned Australia’s best customer-owned banking organisation - just to name a couple of the national awards we received^.

Not bad for a year’s work, if you ask us.

Despite intense competitive pressure and a sustained period of record low interest rates, we delivered a strong $43.8m net profit after tax to reinvest in the business for the future to sustain our exceptional financial strength.  

We undertook one of our biggest ever recruitment drives, inviting Digital and IT specialists to take their seat with Newcastle Permanent.

Our staff uniforms also got a stylish makeover, and they’ve never looked better …[Nice twirl, Reece]

Again this year, we gave back to our local communities in a big way…  

Through our community partnerships, staff donations, volunteering and fundraising we invested over $2 million to help families in our communities lead healthy, active and happy lives.

We celebrated ten years of partnering with Northern NSW Football.

Plus, the Newcastle Permanent Charitable Foundation celebrated 15 years of supporting life-changing community projects with over $1.5m in grants distributed during the year.   
While it’s been a great year for us, it’s not time to put our feet up and rest on our laurels.

We’ve got a lot of exciting things in the works as we continue to roll out the biggest digital transformation in our history.

We recently launched Osko for near real-time payments – ahead of two of the four major banks#.

And we continue to improve our digital customer experience by enhancing our Internet and Mobile Banking, and instant account opening capability, and implementing new technologies that will make banking with us even easier.

All this wouldn’t be possible without the continued support of our customers. 

So on behalf of our dedicated team of nearly 1,000 local staff, we say thank you. 

We promise to continue delivering a better way of banking and meaningful support for our community – today, tomorrow and long into the future.

young girl spinning around

Of the many measures we use to evaluate our performance, one that stands out is our customer satisfaction that was 93%, as recorded by industry research agency Roy Morgan – making us the number one ranked financial institution in Australia in June 2018. Terry Millett, CEO

“Our profits are 100% retained in the business to benefit our customers and community, and this year we generated an estimated $102.2 million in customer value, made up of our net profit after tax of $43.8 million and our $58.4 million Mutuality Dividend – a great outcome for our customers,” Mr Millett said. 

“Never has the beacon of Newcastle Permanent shone brighter than this year amid the Royal Commission’s revelations of unethical and potentially illegal banking behaviour within some of the largest banks in Australia.

“In the midst of our organisation’s largest digital transformation, the future looks bright and I’m exceptionally proud to leave Newcastle Permanent in such strong and capable hands,” he said. 

Group of people walking on the beach
  • Net Profit After Tax of $43.8 million, up 12.4% from the prior year.
  • Capital Adequacy Ratio stands at 20.0%, significantly above regulatory requirements and far superior to the major banks and all other significant customer-owned banking institutions in Australia. 
  • Mutuality Dividend of $58.4 million, which is the amount independently calculated by Canstar (average of the two six-monthly calculations) to estimate the additional, collective financial benefit our customers receive by banking with Newcastle Permanent rather than the major banks.
  • Customer satisfaction of 93% (Roy Morgan, June 2018), making Newcastle Permanent the number one ranked financial institution in Australia at that time.
  • We invested more than $2 million in community programs and events which directly engaged 200,000 people in our communities, and helped them to lead happy and healthy lives.
  • Our home loan portfolio grew by 4.4% to $8.9 billion, which includes more than $2.0 billion of home loans in the Sydney market.  
  • Customer deposits increased to $8.1 billion
  • Arrears rate of just 0.1% which is almost 10x lower than the major and regional banks. 
  • Invested more than $55 million over the past five years in major strategic projects, including the ongoing maintenance of our information technology infrastructure and development of enhanced capability. 
  • Newcastle Permanent Charitable Foundation has provided more than $18.3 million in grants to date, to enable community initiatives addressing disadvantage and marginalisation in the areas of health, young people and social wellbeing.

Download a copy of the media release.

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Here's some more information for you: 
^Mozo Experts Choice 2018 Annual Awards. 
*Ratings sourced from Roy Morgan Customer Satisfaction Survey, June 2018. 
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