Supporting the superior home loan portfolio growth were retail deposits, which grew by 9.9 per cent.

“Newcastle Permanent operates entirely for the benefit of our customers and this year we’ve increased the total value we generated for our customers to $95.6 million, an increase of 7.8 per cent,” Chairman Michael Slater said.

“This value is comprised of $40.9 million net profit after tax and $54.7 million in mutuality dividends – which is the value our customers receive by doing their banking with us.

The building society, Australia’s largest, remains the strongest customer-owned financial institution in Australia in terms of net assets with total assets of almost $10 billion.

Newcastle Permanent’s Tier 1 Capital Ratio of 18.86 per cent is significantly higher than the major banks’ and the minimum capital requirement imposed by the banking regulator.

Chief executive Terry Millett said the results were the culmination of almost a decade’s work to strategically position Newcastle Permanent as the best retail financial institution in Australia.

“The 2015/16 period challenged all financial institutions with ongoing margin pressure caused by lending and capital regulation as well as historically low interest rates and intense competition,” Mr Millett said. 

“Our results show the strength and competitiveness of our customer value proposition, and the ongoing sustainability and relevance of our customer ownership model providing relief for customers within a market dominated by a gang of profit-hungry major banks.” 

Mr Millett said one of the  Newcastle Permanent’s most important markers was its  customer satisfaction score, which remains 10 points clear of the best performing major bank again this year, recorded at 92.3 per cent by Roy Morgan in June 2016.

“We refinanced more than half a billion dollars in home loans from the major banks last year, showing that customers are voting with their feet for a better way of banking with us,” he said.