HUNTER-founded Greater Bank's after-tax profit has taken a hit, falling from $31.45 million in 2019 to $23.11m this financial year.
Delivering the annual results in Newcastle on Tuesday, Greater Bank CEO Scott Morgan said the slump in headline profit was caused by multiple factors, however a main component was the extensive financial hardship support the bank extended to more than 1600 customers during the pandemic, which he labelled "the greatest financial challenge [customers] have ever endured."
"We quite proudly provided significant support to our customers with targeted rate reductions on business and home loans and credit card relief measures," he told The Herald.
At the height of the pandemic the Bank had extended $300 million in loan relief to customers however that figure has since fallen to $11 million.
Mr Morgan said factors unrelated to COVID-19 had influenced the after-tax result.
"We took a higher level of provisioning during this period and our business is also going through a significant process of digital transformation, investing about $20 million - largely into the Newcastle market - as we replace our core banking platform," he told The Herald.
Marking its 75th year of operation in 2020, The Greater also reported an underlying profit result of $35.0 million - slightly up from $34 million the previous year.
Mr Morgan said the result highlighted the "solid foundations of financial strength and prudential fiscal management" of the organisation in a difficult year for customers and the industry.
Greater Bank reported an increase in total assets to $7.5 billion (up from $7.2 billion) and an increase in deposit growth of 5.0%.
"While the headline profit result ... was down on the previous year's figure, the underlying profit results of $35.0million, which provisions for the significant investment in the business' digital transformation and impairment of the loan book as a result of COVID-19, is consistent with last year's result and reaffirms another solid performance," it said.
Greater's Bank's results come six weeks after Newcastle Permanent reported its after-tax profit fell 15% from $35.7 million to $30.1 million in a COVID-dominated year.
Mr Morgan said Greater Bank's efforts to build a new banking platform had been scheduled to be completed by the end of 2021 but had been delayed by about three months to the first quarter of 2022.
The majority of customers who received hardship support were again meeting their full loan repayment obligations, and the bank continued to work with those still experiencing hardship.
Mr Morgan said that the economy's response to the COVID-19 crisis as well as the focus on delivering banking solutions that met the needs of customers would continue to drive and shape the business operations.
"Broadly, we have already seen some positive economic signs in recent months, however, a level of uncertainly within the sector will remain until key milestones are reached," he said, saying this included reopening of state borders, national and international travel reinstated and a vaccine becoming available.
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