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NGM Group announces $72.9 million profit in landmark first result

NGM Group CEO Bernadette Inglis (L) and Chair Wayne Russell (R)

Newcastle Greater Mutual Group (NGM Group) has released a standout inaugural annual result, for Financial Year 2023, delivering on its promise to create one of Australia’s leading customer-owned financial institutions, following the historic merger of Greater Bank and Newcastle Permanent on 1 March.

NGM Group 2023 Annual Report

NGM Group 2023 Annual general meeting

Group highlights

  • Net profit after tax of $72.9 million, providing resilience and enabling continued investment in customers and technology in uncertain times.
  • Total assets of $20.1 billion, with net assets of $1.7 billion and regulatory capital of $1.6 billion, making it the largest customer-owned bank in Australia by net assets.
  • A home-loan portfolio of $15.3 billion, with 90% of customers ahead on their home loan and a current 90-day delinquency rate among the best in industry at 0.09%.
  • Customer deposits of $16.5 billion, providing funding and liquidity.
  • Regulatory liquidity ratio of 19.7%, well above the minimum prudential requirement.
  • Net interest margin of 2.35%.
  • Exceptional customer advocacy, with Newcastle Permanent ending the year with customer satisfaction of 92% and a net promoter score (NPS) of 47, while Greater Bank had customer satisfaction of 83% and an NPS of 30.
  • Capital ratio of 21.9%, which is market-leading amongst the Group’s peers and stronger than anticipated pre-merger, making the Group one of the best-capitalised ADIs (Authorised Deposit-taking Institution) in Australia.
  • A 15% increase in new customers, as the Group delivers on its strategic priority of growing and retaining customers.
  • With 97% of transactions occurring digitally or on card, the Group continued its focus on enhancing technology, with ongoing work on award-winning apps and the launch of a cutting-edge digital home loan.
  • An ongoing commitment to branches, with an investment of $3.5 million towards refurbishments and updates.
  • Newcastle Permanent named Australia’s Best Bank in the 2023 Forbes’ World’s Best Banks rankings, with Greater Bank ranked sixth – NGM Group is the only Australian bank with two brands in the top 10 – along with more than 20 further awards across the Group.

Chair Wayne Russell said strong results across the business were a robust benchmark for the newly formed Group to measure itself against.

“NGM Group’s net profit after tax was $72.9 million, which is an illustration of our strength and sound underlying profitability, a strong result considering total assets in excess of $20 billion, net assets of $1.7 billion, and the challenging operating environment,” 

Wayne Russell, NGM Group Chair.

This total net profit is all the more outstanding given Greater Bank and Newcastle Permanent reported a collective profit of $38.1 million last year," said Mr Russell.

Both our brands have continued to support customers in increasing volume since our historic merger in March, with Greater Bank and Newcastle Permanent growing deposits, lending and customers.

Further evidence of the strength of our position is our capital adequacy ratio of 21.9%, which is not only market-leading amongst our peers, it’s actually stronger than we anticipated pre-merger and makes the Group one of the best-capitalised ADIs in Australia.

Perhaps the most pleasing aspect of these results is not what it shows about the past 12 months, but how it sets us up for the future. NGM Group has an extremely strong foundation for growth, which will be critical in continuing to deliver on the commitments we made to our members as part of the merger, to provide financial strength and resilience for the organisation.

As the mutual sector continues to consolidate, NGM Group’s successful integration provides a shining example of how customer-owned banks can continue to play a significant role in ensuring Australians receive a quality banking experience,” said Mr Russell.

Investing in a customer-first future

In announcing the strong result, Group CEO Bernadette Inglis also highlighted a number of key investments and innovations.

“As a customer-owned institution, providing exceptional service is every bit as important as the bottom line and we have made some considered investments over the past 12 months,” 

Bernadette Inglis, NGM Group CEO.

That 97% of our transactions occur digitally or on card is both an illustration of where our customers do the bulk of their banking, as well as an endorsement of the digital experience our brands offer.

Our award-winning apps and internet banking are lauded for their simplicity and ease of use – the result of continuous refinement by our team – and we are excited to share further updates with customers in the coming 12 months.

We launched a cutting-edge digital home loan for Newcastle Permanent, with work well progressed on rollout to our Greater Bank brand, while the technology integration of our Hunter-based call centres ensures our digital future still maintains that vital human touch.

In an environment of more sophisticated scams and financial crimes, we continued to invest in our fraud and scam detection and prevention activities, implementing a range of systems enhancements. We also proactively offer education resources and run awareness campaigns for our customers on how they can protect themselves.

Branches remain a critical part of our future and collectively we invested $3.5 million towards refurbishing and updating branches. Both Greater Bank and Newcastle Permanent recommitted to Lismore by opening new branches following the devastating floods in the region, while Newcastle Permanent’s Kotara, Kurri Kurri, and Ballina branches were fully refurbished, and Greater Bank relocated and opened a new Kotara branch,” said Ms Inglis.

Helping almost 10,000 home-owners with great-value home loans

In what was a challenging operating environment, underlined by multiple Reserve Bank of Australia interest rate increases, the Group sought to maintain a balance in customer outcomes, while staying true to both brands’ founding purpose.

Across our combined history of more than 200 years, helping customers into new homes has always been at the core of our business and we are proud to have helped 9,967 customers with new home loans this past year, more than 1,200 of which were first homebuyers,” said Ms Inglis.

Despite rising interest rates and slowing credit growth in the Australian market, in the months following the merger, both brands grew home-loan balances, taking total home-loan balances for NGM Group to $15.3 billion.

Our arrears rate remains a point of pride, with 90% of our customers ahead on their home loan, and with increasing interest rates and cost of living pressures, we’ll continue to work with and support our customers through these challenges.

On the other side of an environment marked by increasing interest rates is the Group’s deposit book performance, which Ms Inglis described as “outstanding”.

Total deposit balances at 30 June 2023 were $16.5 billion, an outstanding result that provides funding and liquidity to our organisation and reduces the need to access wholesale markets at a time of increased volatility,” she said.

Supporting more customers

The Group is reporting a double-digit increase in new customers.

NGM Group is reporting a 15% uplift in new customer growth, taking our total to over 600,000,” said Ms Inglis.

In merging two Hunter-based companies with a similar geographic footprint, a commitment to mutuality, and closely held values established over decades, continuing to grow our customer base was recognised as being a key challenge – and one our people have taken on with great enthusiasm.

We’re excited to share our plans to expand our base in the coming year, with a strong agenda to grow our deposits and lending customers. Having identified opportunities to deepen our market share within our footprint, we’re also planning to expand our offerings into new regions,” she said.

Building a regional financial powerhouse

As one of the region’s largest employers, continuing to build the capability of and creating more opportunities for its people was a key tenant of the merger proposal.

In coming together, we took deliberate action to support the wellbeing of our 1,600-strong workforce, including by prioritising team and operational systems integration. Setting culture and organisational values, providing clarity for our people early in our integration journey, has been the right approach for us,” said Ms Inglis.

Our first employee engagement survey achieved a 92% participation rate and an overall result that placed NGM Group close to the top quarter percentile globally. This is a remarkable achievement for an organisation that was less than three months old at the time.

I take the opportunity to acknowledge the incredible contribution of our people to the standout result we are announcing today,” she said.

Helping our customers and communities thrive

NGM Group’s mutuality is a key differentiator in the banking environment, with an ongoing financial commitment to the communities the Group serves.

Heading into the merger, both brands and their respective charitable foundations had a collective spend of $4.5 million per year in community support, and we pledged to maintain that financial commitment,” said Ms Inglis.

A total investment in our communities of more than $5 million this past year is evidence we have every intention of continuing to play a key role in helping our customers and communities thrive – and that $5 million flowing back into the community is four times more per customer than the major banks, ”she said.

Our business

NGM Group’s portfolio today comprises the two retail brands Greater Bank and Newcastle Permanent, focused on helping customers and communities thrive.
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