Solid growth from a clear focus on members
- Statutory net profit before tax of $29.7 million
- Total assets increased by 2.4% to $9.7 billion
- Residential loans up 3.3% to $7.7 billion
- Member retail deposits up 5.2% to $7.0 billion
- 8,592 net growth in membership now totalling more than 390,000
- Announced intention to explore a merger opportunity with Heritage Bank to provide greater member benefits and a national mutual banking offering
With pleasing growth in membership, lending, deposits and total assets, People’s Choice has finished 2020/21 on a strong footing and is well positioned for further success – as merger discussions with Heritage Bank continue.
For the first time, total member loans and advances surpassed $8 billion, increasing by 2.6% over the reporting period. The final quarter saw total loan portfolio growth of $147 million, the largest quarterly improvement for seven years, setting up People’s Choice for a very strong start to the new financial year.
Contributing to this growth was the decision to expand the organisation’s presence in the thriving Victorian market by offering loans through the independent broker network.
“Victoria has been a focus of our growth strategy for a number of years and the immediate success of our broker strategy has confirmed we are certainly on the right track,” Chief Executive Officer Steve Laidlaw said.
“We are very happy with the initial results and we have every confidence this decision will allow People’s Choice to help even more Australians to find a new home,” he said.
People’s Choice ended the financial year with total assets of $9.7 billion, an increase of 2.4%. Retail deposits also grew, increasing by 5.20% to $7.0 billion.
People’s Choice recorded a statutory net profit before tax of $29.7 million, a slight reduction of 4.6% from the $31.2 million recorded in the previous reporting period but ahead of internal budget targets.
“The profit result continues to be moderated as a result of our investment in new technology platforms and broader business transformation, with over $12 million invested during the financial year. These investments are a critical part of our continued success and ability to meet evolving member expectations regarding high service levels, community support and highly competitive pricing,” Mr Laidlaw said.
The year saw 14,598 new members join People’s Choice to deliver a net increase of 8,592 – taking total membership to more than 390,000.
People’s Choice also remained one of Australia’s most trusted financial institutions, with a Net Promotor Score – the measure of members’ trust and loyalty – averaging +31 over the course of the year, 23 points above the market average of +8 for the financial institutions surveyed. This is calculated by DBM Consultants via ongoing member surveys of numerous financial institutions.
“Throughout the year, our people once again demonstrated their dedication to supporting our members with their financial goals, particularly as COVID-19 remains a difficult and uncertain time for many,” Mr Laidlaw said.
Merger due diligence underway
“Our two organisations are very similar, not only in size, culture and strategy but also in our absolute commitment to mutuality and remaining member-owned,” Mr Laidlaw said.
“Clearly, we believe there are many benefits of this unique pairing of equals that would create Australia’s leading customer-owned banking organisation.
“By bringing our two organisations together, our increased size and scale would enable us to deliver more for our members through enhanced products, services, digital capabilities and competitive pricing. It will also allow us to provide additional support to the communities in which we operate and our members live.
“Due diligence is progressing well. Once completed, if both People’s Choice and Heritage Bank decide to proceed, the proposal will go to a member vote in the first half of next year.”
Other highlights from 2020/21 included:
- Continued recognition of People’s Choice’s products and services, with Forbes listing People’s Choice among the World’s Best Banks for the second year, and comparison websites, Canstar and Mozo, providing multiple awards for first home buyer, owner-occupier and investor loan packages.
- The launch of an updated website to offer a personalised experience and new features.
- Raising more than $800,000 for more than 730 not-for-profit organisations via the annual People’s Choice Community Lottery.
- Through a suite of fundraising, giving and sponsorship programs People’s Choice contributed 5.1% of its pre-tax profit to corporate community investment in 2020/21, some eight times the average contribution made by major Australian companies (source: Giving Large).
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About Heritage Bank
Heritage is one of Australia’s oldest and largest customer-owned banks with 320,000 members, 800 employees, $11.9 billion in total assets, and 60 branches and mini branches.
With a history stretching back to 1875, Heritage now serves members across Australia through its national digital presence, branches and mini branches in Queensland and New South Wales, and national network of mortgage broker partners.
About People’s Choice
People’s Choice is Australia’s largest credit union with 390,000 members, almost 900 employees, $9.9 billion in total assets, and 34 branches and advice centres.
People’s Choice serves members across Australia through its national digital presence, branches and advice centres in South Australia, Victoria, Northern Territory and Western Australia and broker network in Victoria and the Northern Territory.