The Newcastle Permanent is marking 115 years in business. To the uninitiated, give us a snapshot of how it began?
Newcastle Permanent began in 1903 when a group of hardworking people who couldn’t get a home loan from the banks—because they weren’t wealthy—created a cooperative building society. They put their savings together to help everyone in the cooperative access a home loan and eventually everyone did. Fast forward 115 years and this is still the ethos of what we do today – helping people buy their own home.
The biggest milestones for the bank to date?
We now have more than $10 billion in assets and last financial year our loan growth exceeded that of the major banks. This asset portfolio makes us the largest customer-owned financial institution in NSW and the second-largest in Australia.
How many members do you have and what shape is the business in?
We have more than 320,000 customers predominantly in northern and central west NSW with strong growth in Sydney. We are the financially strongest customer-owned banking institution in Australia in terms of net assets.
The toughest moments for the building society in the past decade?
A stand out is the Global Financial Crisis. While Australia weathered the GFC storm relatively well, our government cooperated with an international banking regulatory framework to provide further protections for the global banking industry. This resulted in significant regulatory reform and oversight for Australian financial services operators. Add to this the need to respond to rapidly changing customer preferences for digital banking and it has certainly been an interesting decade.
And biggest highlight?
Reaching $10 billion in assets had been such an achievement, and for a business based right here in the Hunter!
The Royal Commission into Misconduct into the Banking, Superannuation and Financial Services Industry has started and the big four are in the firing line. Will Newcastle Permanent make a submission?
It’s only early days, but at this stage is does not appear that we’ll be asked to participate in the Royal Commission.
Will the findings of the commission, due in 2018, affect your operations?
The Terms of Reference of the Royal Commission are quite broad and inquire into banking, superannuation, and the financial services industry. At the moment it is not really possible to predict what the outcomes and timings of the Royal Commission’s recommendations will be. However, it’s reasonable to expect there’ll be changes that will affect the entire industry, including Newcastle Permanent.
How can the Perm compete with the big four?
Our business model is different because we’re customer-owned. We don’t distribute profits to shareholders (because we don’t have shareholders), but instead reinvest our profits into the business to benefit our customers and their communities by keeping our loan and deposit rates very competitive.
What is the Perm doing via its Charitable Foundation that has a real impact?
This year the Newcastle Permanent Charitable Foundation is also celebrating a milestone, marking 15 years of supporting our community. In this time the Foundation has provided more than $17.5 million to more than 420 life-changing and community initiatives.
Why is there nostalgia for the Perm in the Hunter?
The fact that we are often called “the Perm” says a lot! I think it’s the simple fact that we’ve always been here. Our head office is in the CBD, we employ almost 1,000 staff, we’re active in supporting our community, and at some stage of their life most Novocastrians have had a bank account with us. We’re intrinsically tied to the memories and lives of Novocastrians.
The fact that we are often called “the Perm” says a lot! We’re intrinsically tied to the memories and lives of Novocastrians.Terry Millet
The Perm has had memorable ad campaigns, but did you expect the Sunshine Over My Shoulder song, created by local business The Proverbials, to become so loved?
We knew the 2012 ad campaign was special; majestically showcasing our region and how lucky we are that we can serve our region. But we never thought in our wildest dreams that the song would resonate so well and become a wedding song!
You worked at one of the big four before the Perm. How do the two differ?
At a big four all your work is devoted to lining the pockets of shareholders. At Newcastle Permanent, we’re all about people. Our mission statement is we are “Here for good” and that means for our customers, our people, the community, and the long term. This was a pleasant culture change coming from a big four where the community wasn’t even a consideration!
What innovation is ahead for the Perm?
Our customers are rapidly shifting their preferences to online banking. I think the last time our industry saw such a shake-up was when computers became the norm more than 30 years ago. We’re working towards a time where our customers, if they wish, will not need to visit a branch to do any of their banking—and that day isn’t too far away.