Great Southern Bank records a 43 per cent rise in its first-home buyers business

Australia’s largest customer-owned bank, Great Southern Bank, reported a softer after-tax profit in the first half of the 2024 financial year but a leap in its first-home buyers business.

The Great Southern Bank has recorded 40 per cent plus rise in its first-home buyers business and launched an industry-first all-in-one mobile app targeting Australia’s micro businesses.

Despite Australia’s largest customer-owned bank recording a net profit after tax of $16.9m in the first half of the 2024 financial year, down from $31.65m in the corresponding period of FY23, chief executive Paul Lewis said it was a strong result considering the rise in funding costs.

“We’re pretty comfortable where we’ve landed and pleasingly we will see a stronger profit posting in the second half,” he said.

“Like all banks we have been transitioning to more expensive funding, whether that be wholesale or retail deposits.

“We are looking to make sufficient profits for capital growth, and seeing we’re not listed, we don’t have pay dividends to shareholders.”

The bank, with 30 branches around Australia, grew its active customer base to 408,000 and its retail deposits were up 2.4 per cent to $13.33bn.

New loans issued remained steady, year on year, with $1.98bn in new lending in the first half.

Mr Lewis said a 43 per cent increase in home loans issued to first-time buyers, compared to the previous year’s first half, was a highlight, and the bank now supported around 2.5 per cent of all Australian first-time buyers, up from 1.5 per cent 12 months ago. “It’s something we really focus heavily on. It’s actually about three times our natural market share,” he said.

Great Southern Bank chief Paul Lewis.

On March 1 the Great Southern Bank launched a new, digital-first banking proposition to address the underserviced Australian small business market.

Leveraging the proprietary platform and operational software provided by fintech and equity partner Constantinople, the bank is specifically targeting sole traders and micro businesses employing fewer than four people.

Mr Lewis said the new business app was “cutting edge” and would provide small business customers with simple, intuitive and integrated banking products all sitting on one digital platform.

He said Australia had 2.5 million small businesses, with three-quarters falling into the nano or micro business category, and Great Southern Bank’s research indicated that over 10 per cent of them were likely to change their primary business banking provider in the next 12 months.

“This is an industry-leading proposition. We’re blending the best aspects of neobanks 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,” Mr Lewis said. “Essentially, they’ll be able to manage all their business finances easily and in one place.”

Mr Lewis said requests for financial assistance were up 13 per cent year-on-year, but remained well below the pandemic peak.