Newcastle Permanent recorded a $43.8 million net profit after tax in 2017/18 in what its chairman says was a year of ‘high operational complexity’.
The building society released its financial results overnight, reporting strong profit, capital adequacy and portfolio growth figures.
The net profit result was a 12 per cent increase on the previous year despite one of the most complex regulatory environments faced by the banking industry to date.
Chairman Jeff Eather said that amid the background of the Financial Services Royal Commission, Newcastle Permanent’s performance was testament to the 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,” he said.
“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 cited the performance of outgoing CEO Terry Millett in leading the organisation to deliver a raft of strategic projects over the past decade. He said Newcastle Permanent had made significant upgrades to systems, processes and services, which had enriched customer experiences and made for a more efficient business.
“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,” he said.
Mr Millett said “never has the beacon of Newcastle Permanent shone brighter than this year”.
“Our profits are 100 per cent 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,” he said.
“Of the many measures we use to evaluate our performance, one that stands out is our customer satisfaction that was 93 per cent, as recorded by industry research agency Roy Morgan – making us the number one ranked financial institution in Australia in June 2018.”
“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.”
Newcastle Permanent 2017-18 results
- Home loan portfolio grew by 4.4 per cent to $8.9 billion.
- More than $2.0 billion of home loans in the Sydney market.
- Mutuality Dividend of $58.4 million.
- Capital Adequacy Ratio stands at 20.0 per cent.
- Customer deposits increased to $8.1 billion.
- Arrears rate of just 0.1 per cent, almost 10 times lower than major and regional banks.