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”.
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.