Newcastle Permanent CEO Bernadette Inglis
The level of mortgages and other loans deferred peaked around five per cent and “is reducing month on month” at Newcastle Permanent Building Society.
But a generous pandemic provision reduced NPBS’ net profit to A$30.1 million over the year to June 20202, down from $35.7 million in 2019.
“We have a strong organisation and business and are well capitalised with over $1 billion in equity, so we feel well positioned for the future,” the CEO Bernadette Inglis said yesterday.
With a capital adequacy ratio of 21.2 per cent (up from 20.2 per cent in 2019) NPBS is on the money when it says “this makes Newcastle Permanent one of the best-capitalised ADIs in Australia”.
Excluding an increase in the impairment provision and a reduction in the fair value of investments held in the charitable trust, “profitability remained relatively consistent with the prior year as net interest margin levels were maintained and lower non-interest income was largely offset by reduced operational expenditure” NPBS said in the annual report.
Total assets increased by 2.5 per cent to $11.1 billion, though there was a reduction in lending assets of 2.8 per cent, in part due to “the impact of the pandemic in the latter part of the year on customer repayment behaviour”.
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Inglis told Banking Day “this year we really focussed in on customers, focussed on home loans; not just deferrals, but [encouraging members] to make extra repayments.
Those people that had some disposable income, we encouraged to pay down debt.
“We also opened 46,000 new accounts.”
Deposit growth matched asset growth at 3 per cent, with $8.5 billion and a deposit to loan ratio around 84 per cent.
Home loan approvals for the year were $1.7 billion.
In September, Newcastle Permanent acquired $300 million in mortgages from Athena Home Loans, and is likely to buy more from this fintech.
NPBS has wound up its Newcastle Friendly Society arm.