Doing things differently - CEO Paul Lewis
Investing in its business and, as usual, allowing costs to get away from it, Great Southern Bank has reported a lower profit over the half year to December 2023.
“Market conditions and sector-wide cost pressures saw the bank record a softer net profit of A$16.9 million,” the bank said in a media release yesterday.
Great Southern reported a full year profit of $44.5 million in FY2023.
“Increased competition and rising funding costs related to the end of the RBA Term Funding Facility has reduced net interest income,” the bank said.
“The bank’s strategic investments in its digital infrastructure, risk management systems and IT capabilities also contributed to elevated operating costs, with continued investment in the bank’s micro-business supporting the bank's future growth.”
This is a reference to the bank’s most strategic investment in recent times, its “new, digital-first banking proposition to address the underserved Australian small business market.”
Developed in partnership with the fintech Constantinople (in which the bank owns an equity stake), the bank said it is “is specifically targeting nano (sole traders) and micro businesses (employing less than four people).”
Paul Lewis, CEO of Great Southern Bank said its new business app would provide small business customers “with simple, intuitive, and integrated banking products all sitting on one digital platform.
“Through our small business offering, we’re doing something different. This is an industry-leading proposition.
“We're blending the best aspects of neo banks with the crucial elements they lack - banking expertise, licences, and capital. And that is going to give us a strong competitive edge in a very sizeable market.
“At this stage, small business customers have access to transaction and savings accounts, overdraft facilities and unsecured loans. In time, we’ll expand to offer credit cards, home loans for self-employed business owners and vehicle loans and asset finance.
“Our goal is for customers to be able to enjoy seamless integration with key business management tools, including payments providers and credit assessment services. Essentially, they’ll be able to manage all their business finances easily and in one place.”
The bank’s unsecured business loans in a range from $20,000 to $50,000 via the new app are likely to prove a popular product, and test the bank’s credit policies.
They will be available to small business operators with a minimum turnover of $70,000, an ABN, GST registration and not much else.
· Disclosure: the author is a member of Great Southern Bank