Voting is set to open today on the proposed merger of the region’s two largest locally-based financial institutions.
Eligible members can have their say on the amalgamation between Newcastle Permanent and Greater Bank from Wednesday 28 September, ahead of the former’s special general meeting on 2 November.
Both organisations confirmed the two iconic brands will continue, the entity will remain 100% customer-owned and their contact centres and headquarters will remain based in the Hunter.
“Given the changes in the industry and evolving consumer preferences, the board believes merging is the way forward,” Newcastle Permanent chair Jeff Eather said.
“Each and every day, we’re competing against the major banks and to do so successfully requires continuous adaptation of our business model.
“Merging with Greater Bank represents an unparalleled opportunity to bring our organisations together to create a financial powerhouse for the region.
“Our merged entity will benefit from our combined strengths, be a more resilient force in the market and enable us to continue to deliver the best value and service to our customers.
“The Newcastle Permanent Board of Directors unanimously supports the merger, as does the Greater Bank Board of Directors.
“We’re encouraging our members to also vote in favour of this proposal.”
The historic occasion coincides with Newcastle Permanent releasing its annual results, which are headlined by a record $2.6 billion in home loan approvals and total assets growing to $12.1 billion.
“Despite the rapidly changing economic environment, we’ve performed well across our core businesses,” CEO Bernadette Inglis said.
“In FY2022, against a backdrop of historically low interest rates and fierce competition from the major banks, we maintained last year’s incredible momentum to reach a new record of $2.6 billion in home loan approvals, growing the portfolio to $9.8 billion.
“We’re continuing to challenge ourselves to accelerate growth and help even more customers achieve their dream of home ownership.
“This was no better demonstrated than in May when we reached the new high of approving almost 1,000 applications in just that one month.”
Customer deposit growth contributed to the majority of funding for the year and provided a resilient liquidity position for Newcastle Permanent.
“On deposits, we again recorded good growth, ending the year up almost 7% at $9.5 billion,” Ms Inglis said.
“Our strong financial position built over many years enabled us to pass on increased deposit rates for more than 155,000 customers from May when the official cash rate started to rise.”
While total net profit for the consolidated group did decrease to $32 million, Ms Inglis attributed this to the impact of financial market volatility on the Newcastle Permanent Charitable Foundation’s investment fund and Newcastle Permanent’s increased investment in digital innovation, growth and compliance.
“We have taken significant strides forward with technology this past financial year,” she said.
“We’ve delivered new payment platforms, adopted digital signatures and digital verification of identity, streamlined online account opening, and enhanced our fraud protection technology as an additional safeguard against emerging financial crimes.
“This investment combined with expenditure related to our proposed merger with Greater Bank, and important but increasing compliance and regulation, has led to reduced profit this year.
“However, this result remains in line with our budget forecast and with overall net assets increasing to $1.1 billion, we have retained our position as one of Australia’s leading customer-owned financial institutions.”
People
Ms Inglis said Newcastle Permanent showed strong commitment to career development this past financial year, with many employees benefiting from upskilling and secondment opportunities brought about by COVID-19.
“While no doubt disruptive, the pandemic provided us the opportunity to fast-track new initiatives and introduce new technology, and new ways of working,” she explained.
“Our people have shown incredible adaptability and resilience, with more than 10% transferring their wonderful face-to-face customer service skills to new, virtual ways of helping our customers.
“Another exceptional employee engagement score this year shows that we’re genuinely committed to supporting and developing our people and to living our values – and we’re excited for what our merger could bring for our team.
“With growth in our sights, our merged entity would be one of the biggest local employers, creating more opportunities for our people and enabling them to forge rewarding and diverse careers right here in the region.”
Customers
Ms Inglis said the mutual was focused on providing world-class customer service and delivering on its strategy this year.
“A highlight was launching digital payments, Apple Pay and Google Pay, for our customers and the uptake has been phenomenal with more than eight million transactions since launch,” she added.
“In addition, our new app, which offers more opportunity for personalised banking, accounts for more than $500 million in customer transactions every month and ranked second [in our peer set] on the Apple App Store during the year.
“Branches continue to be a critical part of our service offering and in the past three years we have invested $2.5 million to deliver fresh, bright branch spaces for our customers.
“The most recent being Charlestown, which underwent significant refurbishment in FY2022.”
For the third consecutive year, Newcastle Permanent received the Roy Morgan Award for Customer Satisfaction (Building Society/Credit Union) and was recognised by Forbes as one of Australia’s Best Banks.
Community
Mr Eather noted a significant milestone for FY2022 was finalising the organisation’s Reconciliation Action Plan (RAP), a key deliverable of Newcastle Permanent’s Environmental, Social, Governance Framework published last year.
“As a customer-owned mutual, acting responsibly and ethically is at our core,” he said.
“We know that supporting reconciliation matters to our people and our customers, and our Reconciliation Action Plan is a reflection of the dedication within our organisation to understand how we can best contribute to positive and lasting change and healing.
“When preparing our RAP, we engaged with our Aboriginal and Torres Strait Islander communities to help us capture and include a variety of views, feedback and ideas as it was vital we delivered a truly authentic and meaningful plan.
“The result is a Reflect RAP, endorsed by Reconciliation Australia, that sees real action for us to deliver today while also laying the foundation for future reconciliation initiatives for our organisation and our people.”
In FY2022 Newcastle Permanent continued its yearly commitment of investing almost $1.5 million to support its local communities.
Also, its Employee Donation Program surpassed the impressive milestone of more than $1 million donated to local charity groups since its inception.
“This incredible achievement reflects the generosity of spirit of our people, digging deep to support charities that matter to them. Beyond the dollars donated, this extends to their own time,” Mr Eather said.
“Every year our people have access to two paid community leave days to volunteer with a local charity they’re passionate about, and it was wonderful to see the enthusiasm with which our people returned to this hands-on support once lockdowns and restrictions eased.”
Further to Newcastle Permanent’s community contribution, Newcastle Permanent Charitable Foundation continued to support innovative, grassroots charities making a meaningful difference to the lives of people facing disadvantage in regional communities.
“Since its inception in 2003, the charitable foundation has granted $24.7 million to 536 important projects and initiatives,” Mr Eather said.
“This past financial year included more than $1.6 million granted to 23 projects focused on delivering life-changing projects and infrastructure to support their local communities.
“The charitable foundation combined with our major community sponsorship and partnership programs continue to go from strength-to-strength, and should our merger with Greater Bank proceed, we’ve committed to maintaining our combined community investment.
“Between Newcastle Permanent, Greater Bank and our respective charitable foundations, that represents more than $4.5 million going back to our local communities every year.
“And, I think I speak for both of our organisations when I say our aspiration is for this to grow.”
