First home buyer focus helps propel bank growth

30 September 2024

• Supported 2.1% of all Australian first home buyers during FY24
• $1.32 billion in lending issued to first home buyers
• Active customers increased 3.4% to 414,000
• Customer NPS was strong and stable at 51
• Group NPAT of $37.3 million for FY24
• Retail deposits increased 4.7% to $13.6 billion

An unwavering focus on helping all Australians own their own home has continued to drive positive outcomes for Great Southern Bank and its customers in the past year.

The bank issued $4.23 billion in new or additional lending to homebuyers during FY24, including $1.32 billion in loans to first homebuyers, it announced today in its annual results. According to the bank’s figures, the average first home buyer borrowed $518,000 in FY24, an increase of over $25,000 (5.1%) on FY23, as home prices continued to increase.

Market share among first homebuyers remained particularly strong, with the bank supporting around 2.1% of those Australians who became first home buyers during the year. This is close to three times its overall market share, demonstrating the bank’s commitment to its purpose of helping all Australians own their own home.

Lending remained strong across all segments, with its home loan book growing at 1.2 times system to more than $16.2 billion. Retail deposits grew by 4.7% to $13.6 billion, with customers reacting positively to the bank’s competitive savings range.

The bank’s success in attracting and retaining customers, steady home loan growth and effective cost management helped the bank to achieve a solid Group NPAT of $37.3 million.

The bank is investing in its future and building a pipeline for profit and customer growth with its new small business offering. Leveraging its partnership with fintech and equity partner Constantinople, the bank is in market with an innovative offering that provides smaller businesses with simple, intuitive, and integrated banking products on a single digital platform.

Supporting customers

The bank’s multi-year investment in technology and service improvements is delivering faster loan decisions, improved customer service, and industry-leading products and interest rates.

Paul Lewis, Managing Director and Chief Executive Officer of Great Southern Bank, said: “Since rebranding as Great Southern Bank three years ago, we’ve comprehensively transformed our operations, become more efficient and more competitive.

“Our home lending decisions are being made faster than ever before. At the same time, the consistently high rates offered on our term deposits are setting benchmarks the biggest banks struggle to match.”

Key customer service results for the year include:

• Net Promoter Score – a measure of how likely customers are to recommend the bank – was strong and stable at 51.
• Recognised for the tenth year in a row as the Canstar Customer-Owned Bank of the Year - Savings.
• The bank was ranked first in the industry for the on-time settlement of home loans during every month of FY24, as measured by online settlements provider PEXA.
• A stronger focus on investor lending drove a significant uplift, with investors now representing around 25% of the flow of new home lending.
• Average call wait times for the Customer Contact Centre fell to 37 seconds, and calls abandoned by customers fell significantly to just 1.7% of calls.

Robust growth underpinning stable profits

Mr Lewis said: “The solid profit result we’re announcing today reflects prudent cost management, the positive impacts of our ongoing business transformation, and good outcomes across customer growth and retention.

“These profits will be reinvested back into our bank for the benefit of our customers, providing much-needed capital to enable us to continue to lend to more Australian homebuyers in the year ahead.”

Great Southern Bank saw growth particularly in personal loans, credit cards and investor home lending. Net interest income remained steady at $349.1 million even as compressed margins and strong competition impacted the banking sector. Despite disciplined cost management, the bank’s operating costs were up by 3.3% as it faced into economic headwinds including higher inflation and cost of living pressure.

There was a six-basis point uptick in the bank’s 90+ days home loan arrears, though the bank’s arrears rate remains less than half of the overall industry average. First home buyer arrears rates are in line with the overall customer base.

Helping communities and the environment

The bank made further progress in its efforts to be a responsible bank and a better corporate citizen, including:

• Becoming a Certified B Corporation (B Corp), a testament to its dedication to ethical business practices and social and environmental responsibility.
• Transitioned two of its hubs as well as a further nine branches to 100% renewable electricity.
• Issuing more than $4 million in green personal loans in the first year since launching, with particularly strong uptake for electric and hybrid vehicles.
• Entering into more than 35,000 individual payment plans or hardship arrangements to help customers experiencing vulnerability across the year.