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Newcastle Permanent growth outpaces four major banks

Our customer-owned banking model continues to deliver better outcomes for our customers and communities.

Friday, 29 September 2017

Newcastle Permanent has released its results for 2016/17, featuring a $38.9 million profit, almost $11 billion in total assets and higher home loan and customer deposit portfolio growth rates than any of the four major banks.

Chair Jeff Eather said, "In our 114th year of operation, we continue to punch well above our weight growing faster than the four major banks in both home loans and customer deposits. We experienced an excellent 8.5% home loan growth rate, compared to industry growth of 6.6%, driving total loans to $8.7 billion. 

"Our customer deposits also grew by an impressive 11.1%, propelling total funding to $9.9 billion, and helping to make us the second largest customer-owned banking organisation in Australia.  


"This year we generated $92.7 million in long-term value for our customers, comprised of $38.9 million in net profit after tax and a $53.8 million Mutuality Dividend. We are proud of the Mutuality Dividend which is independently calculated* by Canstar to show how much better off our customers are by banking with us instead of the four major banks.

"To maintain our relevance and success, we must continue to look to the future. Our multi-year elevated investment program has helped us deliver products and services that are at the forefront of the industry for the next generation of banking customers. We will continue to focus on investing in digital channels and services to complement the personalised service of our branch network, local contact centre and mobile sales teams," Mr Eather said.

CEO Terry Millett highlighted customer satisfaction as a key measure of the financial institution’s success.

"Customer satisfaction is vital in any business, and this year we have achieved an impressive result of 93%^ – significantly higher than any of the four major banks. Plus we were recognised as a leader in customer satisfaction in the prestigious Mozo’s People’s Choice Awards for 2017.

"We refinanced almost half a billion dollars in home loans from the four major banks and their subsidiaries and now have almost $2 billion in home loans in the Sydney market, showing that customers are voting with their feet for a better way of banking with us. We also received more of the highest five-star ratings from Canstar for our home loans than the four major banks combined.

"These results show the strength of our customer-owned banking model which delivers better outcomes for our customers and communities, without the negative consequences of the profit-maximising culture of the four major banks. We offer our customers banking that gives back, with more than $2 million invested in community events, children’s education and sport including junior football and Surf Life Saving," Mr Millett said.     

The 2017 Annual Report can be downloaded here.

Footnotes:
* The Mutuality Dividend is independently calculated by Canstar to show the additional financial benefit (better interest rates and lower fees) customers receive by banking with Newcastle Permanent rather than holding the equivalent products at one of the four major banks. The Mutuality Dividend is the average of the two six-monthly calculations. 
^ Colmar Brunton Customer Satisfaction Survey, June 2017.

A young family of a man, woman and young daughter. The father is kissing his daughter on the head as they all look at a laptop.

We are proudly 100% owned by our customers, not shareholders, and have been since we started 114 years ago. We believe this creates better outcomes for our customers and communities, without the negative consequences of the profit-maximising cultures of the four major banks.

Just take a look at some of our performance highlights…

Again this year, our customers were happier than those of the four major banks^. 

Disclaimer: ^ Ratings sourced from Colmar Brunton Customer Satisfaction Survey, June 2017. 

It may have something to do with the industry awards we received for outstanding products and services, including more of the highest five-star ratings from Canstar for our home loans than the four major banks combined. 

But we didn’t stop there. To better serve current and future generations of customers, we were busy launching a new range of savings and everyday accounts…

…and upgrading our digital platforms, including Internet Banking and Apps to make banking on the go even better. 

We invested more than $2m in community events and children’s sport and education programs to help families in our communities lead healthy, active and happy lives. 

Our much loved, family-focused Cinema Under the Stars program celebrated 10 years as Australia’s largest free regional outdoor cinema program….

…and our passionate staff gave $60,000 from their own salaries and donated over 600 volunteer hours to help ease the load on local charities. 

Plus, the Newcastle Permanent Charitable Foundation provided over $1.6 million in grants to support life-changing projects in our local communities.

Despite intense competitive pressure and a sustained period of record low interest rates, we punched above our weight growing faster than the four major banks in both home loans and customer deposits… 

…and delivered a strong $38.9m net profit after tax to reinvest in the business for the future. 

This has helped us to maintain our position as financially, the strongest customer-owned banking institution in Australia*. 

Disclaimer: * Based on net assets 

This outstanding performance is all thanks to the continued support of our customers. On behalf of our dedicated team of nearly 1,000 local staff, we promise to continue delivering a better way of banking and meaningful support for our community – because that’s what we’re here for… and we’re here for good.


  • The second largest customer-owned banking institution in Australia with total assets of almost $11 billion (an increase of more than $1 billion during 2016/17).
  • Home loan portfolio grew by 8.5% to $8.5 billion – 1.3 times the industry growth rate (6.6%) and significantly higher than the four major banks (6.4% average growth).
  • Refinanced $494 million in home loans from the four major banks and their subsidiaries.
  • Over the past 5 years, total lending assets have grown by an impressive $2 billion, which represents an increase of more than 30%.  
  • Exceptional home loan credit quality with 90+ day arrears rate of just 0.1%.
  • Customer deposits grew by 11.1% to $7.9 billion – 1.6 times the industry growth rate (6.8%) and significantly higher than the four major banks (6.3% average growth rate).
  • Tier 1 Capital Ratio of 18.7% is significantly above regulatory requirements and far superior to the four major banks and all other significant customer-owned banking organisations.
  • Achieved customer satisfaction score of 93% (Colmar Brunton Customer Satisfaction Survey, June 2017), again surpassing the four major banks.
  • Generated total customer value of $92.7 million, made up of $53.8 million in Mutuality Dividend (the additional product value delivered to our customers compared to the equivalent products at one of the four major banks) plus $38.9 million net profit after tax. 
  • A further $11.6 million investment in projects and capital expenditure to strengthen IT infrastructure, enhance the customer value proposition, and adhere to changing regulatory requirements.
  • More than $2 million invested in community events, children’s education and sport including junior football and Surf Life Saving.

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