‘Fast turnaround times’ drive surge in mutual’s portfolio

Announcing its results for the year ending 30 June 2016, the building society highlighted that its home loan portfolio outpaced national system growth by nearly double (11.5 per cent compared to 6.7 per cent), and had “exceptional home loan credit quality”, with a 90+ day arrears rate of 0.13 of a percentage point.

Speaking to The Adviser, Mr Millett said: “The 11.5 per cent increase [in home loan portfolio] has been caused by three key factors: the first is the fact that we are able to deliver a really fantastic customer experience, and that infrastructure we put in place has meant that we are able to move fairly quickly to yes from the application phase.

“The second is that when customers join us, they're really happy and our customer satisfaction rate (from Roy Morgan Research) shows that compared to a major bank customer, our customers are happy.

“The third thing, which is very important, is that lots of the issues that are bedevilling the major banks in terms of the reputations, driven by the conduct issues they are having; none of them are replicated at Newcastle Permanent. We have a brand that is associated with really good community contribution credentials and high integrity.”

According to Mr Millett, the besmirched reputations of some of the big banks has led the building society to refinance more than $671 million in home loans from the major banks over the last financial year, nearly $200 million more than last year.

Further, Newcastle Permanent’s CEO said that home loan approvals came in at $2.2 billion in the financial year 2016, up from $1.7 billion in 2015 and $1.3 billion the year before.

'Brokers are our customers too'

Mr Millett explained the reason for this is largely due to turnaround times.

He commented: “For mortgage brokers, dealing with organisations with lenders who at one point in time in the year can process loans from application to approval in a week (on average), and another time are completely blocked up and have a month delay; that is really frustrating and annoying as it inconveniences their customer.

“It's really important to be able to maintain your performance within a reasonable range as well, because there's nothing worse than if you submit an application and the lender is blocked up and can’t give you a response, because that just multiplies pressure everywhere along the chain.

“So we've been really focused on not doing that because we see brokers as our customers too, as well as the end-customer.”

Mr Millett added: “I think you have to have the right product, you have the right price, an ability to deliver a good experience to both the consumer but also, in the case of mortgage brokers, you have to be able to deliver a proposition that doesn’t create problems.

"I’m proud that our average turnaround time, in a normal period, is within four days.”

Newcastle Permanent’s annual results show that, in the last financial year, the building society grew its customer base to more than 325,000, saw retail deposits grow by 9.9 per cent to $7.07 billion and achieved a net profit of $40.9 million (retained as capital).

[Related: Lender cuts rates by up to 45 basis points]