Great Southern Bank has increased its share of the home lending market on the back of its broker network, rising by 32%, its financial year 2023 results have revealed.
As one of Australia’s largest customer-owned banks, Great Southern Bank’s broker numbers now total 6 6.00. This has helped drive growth in the first-home buyer market, with the bank now servicing 2.88% of Australia’s first-time home buyers.
The full-year results for 2023 also show Great Southern Bank is attracting high levels of customer deposits, with total lending portfolio balances up 6.6%, home loan portfolio growth of 1.3 times the system, and retail deposits up by 9.0%.
In a statement on the results released today, the bank attributed its competitive pricing, service improvements, and purpose-led strategy for the 5% increase in customer numbers to 401,000.
Great Southern Bank cracked the 6,000 mark for broker numbers in December 2022, receiving a boost from its partnership with broker network Lendi Group.
Bank-supplied results of a June survey of brokers from across the industry show that once a broker collaborates with the bank on a loan, they typically work with the bank on an average of six loans over the year.
The same survey also found that brokers ranked Great Southern Bank first for on-time settlements and consistently placed it in the top quartile among smaller banks for broker experience.
The number of customers Great Southern Bank helped via the Home Guarantee Scheme grew 77% year on year, with the newly introduced regional homebuyer scheme making a significant contribution to the rise in application numbers.
The bank recorded a group net profit after tax of $44.5 million, in line with average pre-COVID levels.
Great Southern Bank managing director and CEO Paul Lewis (pictured above) said “We’re seeing a ‘flight to value’ as Australians seek out the best return on their money and competitive home loan rates at a bank that aligns with their own personal values”.
“Our participation in government-backed home lending schemes is very attractive to customers wanting to buy a home sooner by saving on the upfront costs,” Lewis said.
“In line with our purpose of helping all Australians own their own home, we supported 2.88% of all Australian first home buyers last year, which is more than three times our overall home lending market share.
“Across the market, we’re seeing this same pattern repeated – smaller banks like ourselves are growing faster than the major banks.”
Lewis said the results showed the benefits of ongoing investments and improvements in services in the bank’s home lending platform, and the appeal of the rebranding of the bank, previously known as CUA.
“Our profit is ultimately reinvested back into the bank for the benefit of our customers and to ensure our continued sustainability, as we face a challenging external environment that will place pressure on margins in the coming year.”
Lewis said home lending arrears remained relatively flat, increasing only three basis points to 0.24%, demonstrating that to date, the majority of the bank’s home loan customers were managing higher interest rates and the rollover from low-rate fixed loans.
“The bank’s flexible approach to supporting its customers saw it provide modified repayment options to thousands of customers who needed temporary assistance.”
To facilitate future growth, Great Southern Bank has made significant changes to its credit policy and processes to support investors looking to purchase their first investment property or refinance their home loan.
Lewis said customers could now offset their investor’s home loan’s annual interest expense against their taxable income.
The bank has also simplified its minimum document requirements for self-employed applicants and increased rental income recognition to 90%.
The Great Southern Bank also highlighted its commitment to environmental and social responsibilities.
These included providing $2 million in long-term financing to Victorian-based not-for-profit housing provider National Affordable Housing, $1 million to a three-year partnership with Mission Australia to fund energy and water efficiency measures for social housing tenants, and taking positive steps towards reaching net zero emissions by 2040.
Customer-owned banks as a group were the most trusted by banking consumers, recording a higher net trust score than any individual bank in Australia, according to Roy Morgan’s Customer Owned Banking Association (COBA) – Trust and Distrust Report earlier this year.
The report also found that a total of 25 of COBA’s member brands were mentioned, unprompted by respondents in the Roy Morgan Risk Monitor.
This included Bank Australia, Bank First, Great Southern Bank, Heritage and People’s Choice, IMB, and Police Bank.