Great Southern Bank doubles lending to first home buyers

77% of its home loans now come through brokers

Great Southern Bank doubles lending to first home buyers

Australia’s largest customer-owned bank Great Southern Bank has doubled its market share and lending to first time buyers year on year.

Releasing its half-year financial results on Thursday, Great Southern Bank revealed it had increased its monthly home lending to $160 million in December 2021, up from $80 million in December 2020.

Industry lending to first time buyers fell 10% over the same period. The bank, which rebranded to Great Southern Bank from Credit Union Australia (CUA) last year, supported around 2% of the first-time buyer market – double the share it held a year earlier.

Loan settlements were up 89.4% to $2.67 billion compared to same period the previous year. Net interest income also increased 3% to $148.69 million.

There was 6.2% growth in total loans under management, passing the $14 billion mark for the first time and adding an extra 5,100 active customers. Group net profit after tax was $15.7 million.

Read more:  CUA reports big profits

“As a customer-owned bank, it’s our responsibility to help with the great financial challenge for this generation – owning your own home,” said Great Southern Bank CEO and managing director Paul Lewis.

“Thanks to our strong, sustainable financial performance we are making a meaningful, positive difference in the lives of more Australians, and helping them achieve their dreams of home ownership.”

The broker channel has also been incredibly important to the bank.

“As most people choose a home loan via mortgage brokers, their support is crucial to our success,” Lewis said. “It’s incredibly pleasing to see that by December 2021 over three quarters (77%) of our home loans were being arranged by brokers, up from half (56%) a year earlier. We are deep in negotiations to add new aggregators – and thousands of new brokers – to our network in the coming months.”

Lewis said the “time to yes” – known as the average time taken to unconditionally approve a loan - was down to two days for many loans.

Read more: A guide to first time buyer mortgage in Australia

“This is great news for our customers and our growing network of brokers,” he said.

Great Southern Bank has worked hard to support government home ownership schemes – through the First Home Loan Deposit Scheme, the New Home Guarantee and the Family Home Guarantee – the bank helped about 3,000 people to buy their own home over the past two years. 

Lewis said investments in technology, such as the new Lendfast home loan origination system, have also delivered increasing operational efficiency, allowing the bank to grow its lending by processing double the number of applications, while effectively managing costs.

Read more: Customer-owned banks roundtable

“Our investment in technology in recent years has put us in a good position,” he said. “We’re agreeing a higher number of home loans in a significantly reduced period of time. Our home lending grew at 1.8 times system growth over the half year thanks to the strength of our offering and the way our rebrand to Great Southern Bank [from CUA] is resonating with first-time buyers and refinancing Australians.”

A successful rebrand in June 2021 was increasing the bank’s appeal among a younger demographic that would continue with future generations.

“The average age of new customers is under 30, around 20 years younger than the average age of our overall customer base (49 years old),” Lewis said.

“That’s encouraging - we rebranded from a credit union to a bank to ensure our relevance to future generations, as our research showed that 70% of millennials don’t know what a credit union is. Attracting this younger audience is a strong sign that we are moving in the right direction.”