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In its first full financial results post-merger, People First has revealed that brokers wrote two-thirds of its settlements over the year.
Mutual lender People First Bank (the new name for the merged entity combining Heritage Bank and People’s Choice Credit Union) has released its financial results for the financial year ending 30 June 2024 (FY24) – its first full-year financials following the merger.
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According to the group’s results, the bank boosted its residential loan book by 6.8 per cent over the year, taking it from $18.3 billion to $19.6 billion.
Over FY24, it settled $4.7 billion in new mortgages.
The bank said that its “strong results” were partly due to its “growing focus on the broker channel”, which settled $3.1 billion – or 66 per cent – of the bank’s new flows.
Overall, broker lodgements were up 15.8 per cent on the previous year’s $2.7 billion, spread across 6,787 new loans, 9.2 per cent more than last year.
Speaking to The Adviser, Nic Savage, the group head of lending, said that owner-occupiers continued to make up the vast majority of the bank’s broker-introduced loans, at around 80 per cent of total settlements.
However, he said that “around 60 per cent of [its] broker-originated home loans were refinances from other financial institutions in FY24”.
According to the group’s financial results, People First Bank welcomed around 47,000 new customers over the year.
Savage said: “Borrowers have shown a willingness to look around for a better deal and to move banks to get it. It also indicates that the combination of excellent rates and great service offered by People First Bank resonates with borrowers.”
When including all loans and advances, People First Bank’s total loan book rose by 6.2 per cent to $20.3 billion.
Digital transformation underway
Like many non-major banks, the bank is currently in the middle of a digital transformation and said it was “well advanced” in its build of a new suite of digital technology banking platforms that it hopes “will be industry-leading”.
The bank has partnered with a range of digital technology providers – including Backbase, Salesforce, Simpology, and Fiserv – for new cloud-based platforms that aim to improve experience and security for brokers and customers alike.
Speaking at The Adviser’s mutual bank roundtable discussion last month, People First Bank’s head of connected channels & partnerships Michael Sancilio said: “We’re working closely with partners like Salesforce to simplify the entire lending journey, from applications to the complete life cycle of loans.
“By focusing on simplicity and creating one seamless way of doing things, we’re ensuring both brokers and customers benefit from a unified, streamlined experience.
“Our aim is to set a new standard for customer experience and drive consistency across all touchpoints – including brokers.”
Sancilio told The Adviser that the group’s focus for the past year had been on “bringing together the strengths of both legacy brands to build a new modern, customer-centric banking experience”.
He said: “We’re partnering with leading global companies to help deliver a simpler new technology suite and we’ve been able to accelerate the launch of our new brand. This will help give us a really clear proposition in the broker market as a purpose-driven bank that does right by its customers.
“We’ve started transitioning into our new lending operating model, so there’s a lot of work ahead of us, but we want to ensure there’s a consistent experience when dealing with People First Bank. And brokers are a key part of our future,” he said, noting the channel had been important to both former brands and helped deliver the lenders “above-market growth in residential lending.”
While releasing the bank’s FY24 results yesterday (8 October), the People First Bank CEO Steve Laidlaw said: “Our investment in technology will ensure a simple, secure, world-class banking experience, no matter how our customers choose to bank with us.
“These platforms will enable us to establish the very best digital banking capabilities and leverage innovations like AI.”
The CEO emphasised the importance of technology in the banking space, saying it could be a calling card for future mergers: “Technology is now a key factor in merger opportunities. Along with cultural alignment, our leading technology platforms that facilitate easier integration will make us a merger partner of choice.
“Our results this year highlight the strength of our merger and the strategy guiding us forward.
“By combining a strong cultural foundation with technology investment, we are creating a customer-focused, sustainable and technologically advanced bank positioned for long-term success.”
The group closed the financial year with a net profit after tax of $41.4 million, up 29.0 per cent from $32.1 million year on year, while retail deposits were up 6.9 per cent to $19.0 billion.
Find out more about how People First is evolving in the October edition of The Adviser magazine, out now.
[Related: Mutual mania: The great wave of mergers continues]
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