The Newcastle Permanent Building Society’s consolidated group net profit has dropped from $45.9 million to $40 million but the men at its helm say the figure is ‘‘very strong’’ given the current economic climate and its ambitious investment strategy.
At its annual general meeting today, the Perm – the biggest building society in the country – reported its member-generated profit in the last financial year was $92.4 million, down from $102.5 million the previous year.
The mutality dividend – or the additional value the mutual says it delivers to its 325,000 members compared to the equivalent products at the Big Four banks – was $52.4 million, softening from $56.6 million a year earlier. Chief executive officer Terry Millett described the result as ‘‘very strong’’ when considering sliding official interest rates, increasing competition and the building society’s investment program.
‘‘It’s the third very strong year overall performance in our sector and against the major banks – prospective customers continue to respond and we continue to grow at a faster rate than our major competitors,’’ Mr Millett said.
‘‘Regionally we have consistently outperformed all of our customer-owned peers on a range of measures and we’ve also outperformed the major banks on critical measures including the ability to attract and retain customers.’’
With more than $8 billion in total assets, Newcastle Permanent derives 80 per cent of its business from retail deposits, in which it recorded a 10 per cent increase. The mutual also reported $1.4 billion in new home loans, representing 8 per cent growth in its home loan portfolio.
Mr Millett said boosted internal investment in developing systems and product enhancements also reflected on the bottom line.
‘‘Three years ago we were investing approximately $3.7 million in new capabilities for the benefit of members, last year we invested about $11 million and this year we are planning about 24 million,’’ he said.
Chairman Michael Slater said the 2008 Global Financial Crisis had forced the organisation to review its business plan and it had since proven its nous in continuing strong performances.
‘‘We are telling our members that we are confident given our base, our staff, our stratetic plan that those trends will continue in the future – we’ve nailed our flag to the mast,’’ he said.
The Newcastle Permanent has expanded its regional grip in the past six year to include the Mid North Coast, New England and Northern Rivers and aims to be the market share leader in regional NSW.
It also spent $1.5 million on regional charitable projects this year.