Great Southern Bank posts a $44.5m net profit for 2022-23 and concentrates on first-home buyers

Brisbane-based Great Southern Bank, formerly Credit Union Australia, has posted a $44.5m net profit and is carving itself a niche as a ‘flight to value’ alternative to the big banks.

Great Southern Bank posted a $44.5m net profit for 2022-23.

One of Australia’s largest customer-owned banks will continue its focus on growing the first-home buyer base as it carves a niche as a “flight to value” alternative in the competitive banking sector.

Brisbane-based Great Southern Bank, which was formerly Credit Union Australia until it was rebadged two years ago, posted a $44.5m net profit for 2022-23, down from the $70.5m the previous 12 months which was inflated by the sale of CUA Health.

Great Southern Bank chief executive Paul Lewis said profit had normalised to pre-Covid levels, while active customer numbers were up by 5 per cent for the year to 401,000 and the average age of new customers was 31 years.

“We’re happy to see the continuation of growth, particularly in the first-home buyers market in an environment where many of the lenders have reduced support for that segment,” he said.

“We are operating well above our weight and introducing younger customers to our bank.

“We supported 2.88 per cent of all Australian first-home buyers last year, which is more than three times our overall home lending market share.”

Great Southern Bank chief executive Paul Lewis.

Over 2022-23 the key highlights were total home lending up by 6.6 per cent, retail deposits up by 9 per cent and the bank’s personal loan portfolio grew 7.7 per cent. The bank continued to improve its broker service even as it grew the number of brokers on its lending platform to over 6200 (up by 32 per cent).

Home lending arrears continued to be relatively flat – increasing only 3 basis points to 0.24 per cent – 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.

Mr Lewis said there was currently a “flight to value” trend among Australians seeking the best return on their money and competitive home loan rates, at a bank that aligns to their personal values.

“Customers are increasingly aware of the choice that they have and we’re certainly seeing that with young customers,” he said.

“It does not matter which industry, younger customers are getting more circumspect about the type of companies they want to have a relationship with.

“Some of that is value based but it also purpose led like digital and physical services. We are number one with on-time settlements among all banks and we’re very proud of that because of the service we give.”

Mr Lewis described the $44.5m profit as “strong”.

“We’re seeing the benefits of ongoing investments and improvements in our services, in our home lending platform, and in the appeal of our rebranded bank,” he said.

“These profits are 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 which will place pressure on margins in the coming year.”

Following the announcement of its partnership with fintech Constantinople earlier this year, the bank is continuing to build a digital-first bank product in the microbusiness market.