Great Southern Bank lifts first home lending book

Queensland-based Great Southern Bank has expanded its first-home buyers loan book, but faces higher operating costs amid rising economic headwinds.

First-home buyer Victoria Athanasiadis, 29, is among Great Southern’s customers.

Customer-owned Great Southern Bank has expanded its first-home buyers loan book, but faces higher operating costs amid rising economic headwinds.

The Brisbane-based bank, formerly Credit Union Australia (CUA) issued $4.2bn in new or additional lending to home buyers last financial year, including $1.3bn in loans to first-home buyers.

It posted net profit of $37.3m compared to $44.5m in the prior corresponding period.

Operating costs increased 3.3 per cent as it faced higher inflation and cost of living pressures.

There was a six basis point uptick in 90-plus days home loan arrears, though the bank’s arrear rate remains less than half of the industry average.

According to the bank’s figures, the average first home buyer borrowed $518,000, an increase of over $25,000 on the previous year as home prices continued to increase.

Market share among first-home buyers remained strong, with the bank supporting 2.1 per cent of them during the year.

Great Southern chief executive Paul Lewis said this was close to three times its overall market share, demonstrating a commitment to helping all Australians own their own home.

“Since rebranding as Great Southern Bank three years ago, we’ve comprehensively transformed our operations, become more efficient and more competitive,” said Mr Lewis.

“Our home lending decisions are being made faster than ever before.

Great Southern Bank boss Paul Lewis.

“At the same time, the consistently high rates offered on our term deposits are setting benchmarks the biggest banks struggle to match.”

Lending remained strong across all segments, with its home loan book growing to more than $16.2bn.

Retail deposits grew by 4.7 per cent to $13.6bn.

Mr Lewis said the solid profit result reflected prudent cost management, the positive effects of its ongoing business transformation, and good customer growth and retention.

“These profits will be reinvested back into our bank for the benefit of our customers, providing much-needed capital to enable us to continue to lend to more Australian homebuyers in the year ahead,” he said.

Great Southern Bank saw particular growth in personal loans, credit cards and investor home lending. Net interest income remained steady at $349.1m even as compressed margins and strong competition affected the banking sector.