PERM ANNUAL REPORT 2005 by hjkuiw354


									A n n u a l R e p or t 2 0 0 5
 Newcastle Permanent
Building Society Limited

Annual Report

                           ABN 96 087 651 992

       I   Chairman’s Report                               1-4

       I   CEO’s Review                                   5 - 10

       I   Performance Summary                            11 - 12

       I   Sharing with our Community                    13 - 16

       I   Going Forward                                 17 - 18

       I   Directors’ Report                             19 - 22

       I   Corporate Governance Statement                23 - 28

       I   Concise Financial Report                      29 - 35

       I   Directors’ Declaration and Auditor’s Report    36 - 37

       I   Management Directory                               38

       I   Products and Services                         39 - 40

       I   Branch Locations                                   41
Here for                                   good
Newcastle Permanent is a regionally based                       packages is extremely high, a fact that has
independent, mutual retail financial                            been independently recognised by Cannex,
services provider.                                              Australia’s leading independent banking and finance
With total assets of over $4 billion, Newcastle                 industry specialist.
Permanent is the financially strongest building                 In over 100 years of operation, Newcastle
society in Australia and a major economic entity in             Permanent’s central operating philosophy has
the Hunter and Central Coast Regions.                           always been to put the needs of our members first
Electronic banking services, mobile Community                   and provide value to those members through
Lending Managers and Mortgage Brokers help to                   excellence in products and service, and support for
extend this footprint south to the Sydney market                their community.
and north to the rapidly developing urban centres
                                                                We have a long and distinguished history of
of Taree, Port Macquarie and Coffs Harbour.
                                                                returning benefits to our community, which is
As a complete retail financial services provider,               demonstrated in the competitiveness of our
Newcastle Permanent provides a genuine                          products, excellence in customer service, an
alternative to traditional banks for a range of                 extensive and regularly expanding branch network
financial services including the day to day needs of            and a significant level of support for a wide range
retail and business banking customers.                          of community based initiatives.
In terms of lending, whether for home buying,                   Whichever meaning of the word ‘good’ you choose
investment or business purposes, the quality and                to measure our performance by, Newcastle
competitiveness of Newcastle Permanent’s lending                Permanent truly is, Here for good.

Business                                     Highlights
                                                  % Variance
Total Assets:               $4.325 billion             + 19.2
Total Deposits:             $3.120 billion              +4.6
Total Loans:                $3.478 billion             +18.9
Total Members Funds:        $438.1 million              +9.3
    C h a i r m a n’s

    The banking and financial services                    On behalf of the Board of Newcastle
    industry continues to be one of the most              Permanent it is my pleasure to report
    fiercely competitive in Australia.Within
    this environment Newcastle Permanent                  that the 2004/2005 financial year
    is prospering.                                        was another extremely good one for
    Our results for this financial year show an
                                                          the Society.
    encouraging increase in after tax profit
    performance, with asset growth of 19.2%.
    Total assets now stand at $4.325 billion,
    underlining the significant financial strength   significant value that they now represent,
    of the Society.                                  is a factor in the demand growth that we
                                                     witnessed during 2004/2005. February and
                                                     March 2005 saw Newcastle Permanent set all
    Lending growth during the year has been very
                                                     time records for lending.
    strong, notwithstanding a gradual softening of
    the demand for borrowing for houses and          In a first for the Society, we also initiated an

    property. This softening of the Australian       advertising campaign that directly compared
    market was accelerated when the Reserve          the cost of a Newcastle Permanent loan to
    Bank increased official rates by 0.25% in        those of our major competitors. Our
    March 2005; the first increase for 15 months.    Customer Service Centre noted a major

    Consistent with our policy of delivering         increase in loan related enquiries as a

    value for our members, Newcastle Permanent       consequence, demonstrating that the market
    delayed the application of this increase         is sensitive to direct costs associated with
    for one month and also absorbed some of          borrowing for housing.
    the increase, rather than pass it on in full     This demand has continued into the new
    to borrowers.                                    financial year with the quality of our products
    A return to a policy of aggressive pricing of    being officially recognised by Cannex, the
1   our lending products, coupled with the           independent mortgage ratings agency.
                                                                                               a role
                                                                                               in the
                                                                                               growth and
                                                                                               of the
                                                                                               regions we

                                                                 Efficient friendly customer
                                                                    service is a hallmark of
                                                                     Newcastle Permanent.
Newcastle Permanent now has a record
13 five-star lending products as rated by
Cannex. Each five-star rated loan is in the top
2% of those available nationally.

I   Deposits
                                                        of Newcastle Permanent’s great financial strength,
While Newcastle Permanent has always maintained
                                                        a fact underlined by our position as one of the
a very sound deposit base, the Board decided to
                                                        strongest financial institutions in Australia.
continue its policy of diversifying the Society’s
                                                        I   Future Growth
funding base with the commencement of a $1
billion commercial paper program. This program          This financial strength is also the platform for
enabled Newcastle Permanent to tap new funding          future growth. The Board has taken a conscious
markets both domestically and potentially offshore.     decision to reduce the Society’s capital adequacy
The program took advantage of the ‘BBB’ long term       slightly in order to fund our growth plans.
and ‘A2’ short term credit rating that Standard &       Two new branches have opened on the Central
Poor’s assigned Newcastle Permanent in 2004.            Coast, at Wyoming and Bay Village Shopping
The commercial paper program capitalises on             Centre at Bateau Bay. In both instances the branch
Newcastle Permanent’s strong performances.              staff are reporting an excellent response from retail
It allows us to confidently and actively pursue         and business customers who appreciate both the
long term growth strategies and to deliver even         quality of Newcastle Permanent products, and the
higher standards of service and distribution for        convenience of our longer opening hours.
our members.                                            During the second half of 2005 Newcastle
The Society’s capital adequacy and liquidity ratios     Permanent will also open full branches in Taree
remain very sound at 18.1% and 20.44%                   and Port Macquarie. This expansion follows the
respectively. While conservative by comparison          successful deployment of Community Lending
with other operators in the industry, these are signs   Managers into those areas.                              2
    C h a i r m a n’s
                                            Report                      (continued)

    As with the Central Coast, the news of a full      As an organisation with a long tradition of
    branch service is being welcomed and keenly        prudent financial management, formalising
    anticipated by those communities.                  risk management strategies and policies has
    The North Coast of NSW has been identified         been a straightforward process.
    as one of this state’s major growth areas over     All other organisational matters pertaining
    the next two decades. We are confident that        to compliance are well advanced.
    the provision of high quality financial services
                                                       I   Community Support
    will be successful with the current and future
    population, many of whom are relocating            Newcastle Permanent has a long and proud
    from major urban areas and expect the ready        tradition of community involvement. Over
    availability of financial products and services.   the years we have supported countless
    Opportunities for growth in these areas will       worthwhile causes, community initiatives,
    be closely monitored.                              events and projects. We see this facet of our
                                                       operation as integral to our mutual status,
    We will also become involved in supporting
                                                       and a means of returning value to the many
    the community in these new areas of
                                                       people and communities in the region which
    operation, just as we have long done in the
                                                       have supported the Society for so many years.
    Hunter and Central Coast.
                                                       That support has been an essential component
    The Society has also undertaken a policy of
                                                       of Newcastle Permanent’s success.
    expanding our ATM network in non-branch
                                                       Our Charitable Foundation marked
    locations. Recognising that the ATM is now
                                                       12 months of operation in August 2005.
    regarded as an essential service component in
                                                       In that time more than $1 million has been
    the day-to-day needs of our members,
                                                       distributed. A total of 29 organisations
    providing ATMs in places of high patronage or
                                                       representing a diverse field of interests are
    usage represents a sound business decision.
                                                       now undertaking important community
    I   Legislative & Statutory Matters                projects thanks to the Charitable Foundation.
    The 2007 implementation date for the               As news of the Foundation’s work spreads,
    BASEL 2 Accord has necessitated the                the level of community support that it
    development of an appropriate timetable to         provides will continue to grow, reinforcing
    ensure full compliance. Newcastle Permanent        the strong association that the Newcastle
    has its preparations well in hand and we are       Permanent has with the community and
    confident of meeting all obligations.              actively demonstrating the true nature of
    One of the key elements of the Accord is the       responsible corporate citizenship.
    need to demonstrate an appropriate level of        Our commitment to good citizenship was
3   risk management is in place.                       demonstrated in Newcastle Permanent’s rapid
response to the Tsunami Relief Appeal in early          sound understanding of the financial services
January 2005. Within two days of the disaster           industry is integral to the ongoing successful
we had launched a public appeal. The response           performance of Newcastle Permanent.
was overwhelming.                                       Most important of all, my sincere appreciation
In just a few weeks more than $1million had been        goes to all our members whose continuing support
raised for Australian Red Cross to enable them to       for Newcastle Permanent is the key ingredient in
deliver assistance to the areas worst affected by the   our ongoing success.You can be sure that your
Tsunami. This was the largest group donation            Board, management and staff are fully committed
received by the Red Cross in NSW.                       to serving your best interests.
I thank the local media, particularly The Herald        I look forward to the future with confidence.
and NBN Television, and Newcastle and Lake              The move to expand the footprint of our area
Macquarie Councils for their generous support in        of operation into the northern regions of NSW
helping to make this appeal such a success. The         provides us with significant scope for growth,
people of the Hunter and Central Coast can be           while continuing to expand our service range
proud of their role in this appeal, demonstrating       within the Hunter and Central Coast regions.
the true meaning of community at a time of the          Along with this growth we must also be mindful
year when our thoughts are usually associated           of the need to ensure that Newcastle Permanent
with relaxation.                                        retains its competitive edge in the market.
I   Board and Management                                Excellence in products and services must be
                                                        supported by an organic development in our
I must make special mention of the contribution
                                                        systems and organisational culture. This will be
made by my fellow Directors over the past 12
                                                        a focus for the Board in the coming year.
months. The responsibilities now applying to
                                                        We have an important role to play in the
Directors of any company, coupled with the
                                                        growth and prosperity of the Hunter, the Central
increasing complexities of corporate governance,
                                                        Coast, and now, the Mid North Coast. It is a
have seen a significant increase in their workload.
                                                        role we welcome and will continue to perform
The time devoted to Newcastle Permanent Board
                                                        with the diligence, rigour and integrity which
related matters has more than doubled. I thank my
                                                        are the hallmark characteristics of the Newcastle
Directors for their unswerving commitment and
                                                        Permanent brand.
application to their duties, and for their excellent
counsel in all matters related to the governance
of Newcastle Permanent.
I also wish to congratulate our Chief Executive
Officer, Mr Fraser Read-Smith on his first 12
                                                        Michael McDonald
months with Newcastle Permanent. In that time
he has provided sound leadership, including the
development and implementation of a range of
initiatives that have positioned the organisation
for sustained growth and future long term success.
In concert with his management team and
tremendous branch staff, Fraser’s diligence and                                                             4
      C E O ’s                          Review

    The Society achieved
         a buoyant
    business performance

      I   Solid Financial Performance                    Operating expenses of $71.7 million (2004:
                                                         $63.9 million) include a $1.1 million increase
      In the face of an increasingly competitive
                                                         in new project related expenditure.
      retail banking environment, the Society
                                                         Good progress was made in terms of the cost
      achieved a solid 10.3% increase in profit
                                                         to asset ratio which fell to 1.80%, down from
      before tax after deducting outside equity
                                                         1.95% in the previous corresponding period.
      interests and excluding non-recurring items,
                                                         The Society remains committed to achieving
      rising from $43.8 million to $48.3 million.
                                                         continuing improvement in cost efficiency so
      After adding back non-recurring items and
                                                         that its competitive position as an authorised
      allowing for income tax expense and a $3.0
                                                         deposit-taking institution (ADI) is optimised.
      million donation to the Newcastle Permanent
      Charitable Foundation, final net profit after      I   Enhanced Member Value
      tax was $34.1 million (2004: $33.8 million).
                                                         As a mutual organisation, Newcastle
      The donation made to the Newcastle                 Permanent is primarily focused on
      Permanent Charitable Foundation is part of         maximising the value it provides directly to
      a five year commitment by the Society to           members in the form of above-the-line
      inject $20.0 million into the Charitable           benefits such as better interest rates on loans
      Foundation, in order to facilitate its extensive   and deposits, lower fees and charges, no
      programme of community projects and                account keeping fees, no internet or
      initiatives in the region.                         telephone banking fees on retail transaction
      Excluding non-recurrent items, total revenue       accounts etc. We call this the “mutuality
      rose by 9.5% to $123.8 million (2004:              dividend”. This is in addition to the
      $113.0 million) reflecting the intense             accounting profits recorded by the Society,

      competition for both loans and deposits.           which are accumulated as member’s funds and
used to finance the growth and development of the      increasing the “above-the-line” benefits that are
Society’s activities for the benefit of current and    provided to members, on whose behalf the Society
future members.                                        exists and functions.
Fiscal 2005 saw the Society achieve a 10.5%            I   Sound Financial Position
increase in the estimated “mutuality dividend”
                                                       As noted in the Chairman’s Report, the period
to $45.2 million (2004: $40.9 million).
                                                       under review saw the Society maintain a
As shown below, the “mutuality dividend” accounts
                                                       conservative financial position. Capital adequacy
for more than half of the overall member value that
                                                       was recorded at 18.1% as at 30 June 2005,
was generated by Newcastle Permanent in
                                                       reflecting the increased growth of the Society’s
2004/05. In other words, nearly 60% of the total
                                                       lending portfolio and a higher level of liquid assets
economic value produced by the Society during
                                                       at year’s end. The Society is committed to
this period was provided directly to members in
                                                       maintaining a superior capital adequacy ratio to
the form of benefits accruing from the products
                                                       most major ADI’s and its current capital position
and services used by each member.
                                                       remains well above industry benchmarks and

                            2004/05        2003/04     prudential requirements. It is also important that
                            $million       $million    the Society optimises its capital position for the
After-tax Profit               34.1          33.8      benefit of the Society and its members.
“Mutuality Dividend”           45.2          40.9      Likewise, the Society’s liquidity position remains
                                                       very sound with a liquidity ratio of 20.44% as at
Overall Member Value           79.3          74.7      year’s end.
% “Mutuality Dividend”        57.0%         54.8%      These ratios leave the Society well placed to pursue
                                                       its growth strategies and give it a competitive

This is based on the work of independent banking       advantage at a time when system growth is slowing
and finance industry consultants CANNEX Pty            and economic conditions have moderated.
Ltd, which calculates the difference in the price of
                                                       I   Superior Credit Quality
products and services provided by the Society to
members compared with the pricing of the major         Industry benchmarking indicates that the Society’s

banks for comparable products and services.            arrears position compares very favourably with
                                                       ADI’s generally. At year’s end, mortgage loans
The Society provides these benefits to members
because of its mutual structure. In contrast to the    with arrears in excess of four months’ duration

major banks and regional banks, the Society has no     comprised just 0.05% of total loans, or nearly

shareholders, only members who are also the            half the industry average. This partly reflects the

Society’s customers. Consequently, the Society         rather benign credit risk conditions which
does not operate to maximise bottom-line               have been apparent in recent years - due to
profitability and dividends on behalf of               Australia’s sustained economic growth together
shareholders. Instead, as a mutual, Newcastle          with associated low inflation, interest rates
Permanent is able to focus its resources on            and unemployment.                                       6
    C E O ’s                           Review                    (continued)

    However, it is also due to the prudent
    approach that the Society takes to credit
                                                                The "mutuality
    risk - as with other risk areas. The Society
    has been mindful that such standards can                  dividend" accounts
    easily be diluted in periods of extended                 for nearly 60% of the
    prosperity and has been careful to maintain
                                                        overall member value.
    a consistent approach to credit policy and
    its administration.

    I   Buoyant Business Performance                 provides to members on an ongoing basis.

    In a period of slowing economic growth,          Many other financial institutions offer special
    the Society achieved a buoyant business          rates for limited periods of time or other
    performance outcome. Lending approvals           short term gimmicks to attract the unwary
    increased by 13.7% overall for the year,         borrower. In contrast, the Society provides
    with good increases in each of our               year-round good value. A comparison of
    lending portfolios.                              headline rates shows the Society at the cutting

    Significantly, total loans on balance sheet      edge in nearly all the loan categories in which

    increased by 18.9% to $3.5 billion. This is an   it competes, whether it be for home, personal

    excellent outcome - particularly given the       or business lending.

    competitive environment - and reflects the       Several years ago, State Governments around
7   strong value proposition that the Society        the country introduced a uniform system of
                                                                                                           remains well
                                                     Senior Executives, left to right:
                                                     Fraser Read-Smith, Glenn Walker,
                                                     Bruce White, Nadine Leighton and                      industry
                                                     Jeff Thornton.

average annual percentage rates (AAPR) to assist        This has further enhanced the ability of this service
mortgage loan borrowers in comparing home               and has proven to be something of a hit with
lending products on an “apples with apples” basis.      internet registered members.
AAPR takes all the costs of borrowing into account      It has also enabled the Society to add new features
and a comparison on this basis clearly shows the        to its internet banking offering, such as the
outstanding value proposition provided by the           introduction of BPAY View™ and the
Society’s mortgage loan products.                       implementation of Pay Anyone limits.

This was reinforced when the Society was awarded        The Society took the opportunity to significantly

second place in Money Magazine’s national Home          upgrade the bandwidth for its branch data

Lender of the Year 2005 awards, in competition          communication network. This has led to a major
                                                        increase in data transmission speeds through the
with all the major home lending institutions from
                                                        network and has greatly improved system
around the country.
                                                        functionality in all of our branches. This has
I   Meeting Member Needs                                enabled the Society to further lift service levels

Fiscal 2005 saw a number of new initiatives             for the benefit of members – something which has

implemented which are enabling the Society              long been the hallmark of Newcastle Permanent.

to better meet member needs.                            As part of an upgrade of the Society’s security

Nineteen new ATMs were installed during the             systems, the latest CCTV surveillance technology
                                                        was installed throughout the Society’s branch
period which has significantly increased
                                                        network. This adds a further security feature
members’ access to the Society’s ATM network.
                                                        which is very much in the interests of all
A further increase in the number of ATMs is
                                                        members and staff.
planned for 2005/06.
                                                        Each year the Society makes a considerable
As well as augmenting the branch network with
                                                        investment in staff training and 2004/05
two additional branches and the establishment of
                                                        was no exception.
our first minibranch, a major upgrade of the
Society’s internet banking system was completed.        TM Registered to BPAY Pty Ltd ABN 69 079 137 518               8
       C E O ’s                            Review                        (continued)

       Of particular note, was the implementation of        already extensive range of business related
       a newly developed advanced service training          products and services provided by the Society.
       programme which involved all of the Society’s        Call traffic to our Customer Support Centre
       branch based staff and entailed a significant        (CSC) increased by 30% during the year.
       investment in time and resources.                    Additional systems were introduced to

       This training further augments the capacity          the CSC which gives it all the non-cash

       of our frontline staff to meet the needs of          functionality of the physical branch.

       members on a member-by-member basis.                 The CSC is also now equipped to provide
                                                            hands-on assistance to members with
       In a significant financial planning initiative the
                                                            internet banking queries.
       Society launched the Newcastle Permanent
                                                            It is also pleasing to note that during the
       Investment Portfolio during the year.
                                                            course of this year the CSC attained the
       This gives members low cost access to a
                                                            member service standards targeted by
       comprehensive portfolio of strongly
                                                            the Society, even with the sizeable increase
       performing investment products together
                                                            in call volumes.
       with full-service reporting capabilities.
                                                            A new corporate advertising campaign was
       It adds a new dimension to the Society’s
                                                            initiated during the year which has proven
       ability to assist members with their longer
                                                            to be popular with members and non-
       term investment planning and wealth
                                                            members alike. The “Here for good”
       generation activities.
                                                            campaign, which reaches back to the ethos
                                                            of “Our Town” campaigns of past years,
                                                            carries forward the values which have
    Newcastle Permanent                                     underpinned the Society’s appeal to members

    will continue to                                        and its success for so many years.
                                                            We will continue to broaden our distribution
    progress and develop.
                                                            network and product range to further
                                                            enhance and strengthen our relationship
                                                            with members.
       In a new business banking initiative, the
                                                            I   A Confident Future
       Society launched competitively priced leasing
       and equipment finance products to meet the           Conditions in the financial services industry
       needs of the growing ranks of Society                are more challenging than ever. The old
       members with small and medium size                   barriers to competition no longer apply. The
9      business requirements. These complement the          application of new technology and the
   Senior Executives: left to right:
        Tony Carr, Michael Kelly,
                   Margaret Ellis,
        AndrewYost, Terry Millett.

is focussed
on maximising

     emergence of new competitive forces are                 and develop in this changing environment, as it
     transforming the provision of retail banking            has successfully done now for so many decades.
     and financial services.                                 The Society has clear values and operates in a

     For more than a century now, Newcastle                  region which it knows and understands. It has a

     Permanent has successfully catered to the needs of      first-rate infrastructure and is highly efficient, with

     its members. While it has adapted and made the          well trained staff who are committed to doing the

     change from being a simple home lender and              very best for members. The Society is uniquely

     gatherer of deposits, to being a sophisticated multi-   positioned to continue to serve the needs of

     product, multi-channel distributor of high quality      members long into the future.

     and well priced financial products and services,
     Newcastle Permanent has remained true to its
     mutual foundations which focus the Society on
     putting the interests of members first.

     By remaining relevant to the needs of its members,      Fraser Read-Smith

     Newcastle Permanent will continue to progress           Chief Executive Officer                                   10
     Pe r f o r m a n c e
                                        Total Assets
                                                                                          Total Assets
                4000.00                                                                   During 2005 total assets

                                                                                          increased to over $4 billion,
                                                                                          underlining the significant
                                                                                          financial strength of

                2500.00                                                                   Newcastle Permanent, and
                                                                                          highlighting the value of a
                                                                                          long term strategy of sound
                1500.00                                                                   prudential management. This
                                                                                          is an ideal platform from
                                                                                          which to pursue our
                 500.00                                                                   growth strategies.

                          1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

                                                                                    Member Funds
     Member Funds

     Member funds are used to
     finance the growth and
     development of the Society’s
     activities for the benefit of
     current and future members.



                                                                        1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
                               After Tax Profit
           40.00                                                                  After Tax Profit

           35.00                                                                  Newcastle Permanent’s 2004/2005 final
                                                                                  net after tax profit was $34.1 million.
                                                                                  After deducting outside equity interests
           25.00                                                                  and non-recurring items, the increase in
                                                                                  before tax profit was 10.3%, reflecting
           20.00                                                                  a solid result.




                   1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

                                                                                               Total Loans
Total Loans
Total loans increased by 18.9%, an                                     3200.00

excellent outcome in a highly competitive                              3000.00
environment and reflects the strong value
proposition that Newcastle Permanent
offers to members on an ongoing basis.                                 2200.00
                                                                                 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
                                                  Sharing with our

        The Society takes
        great pride in its
     corporate citizenship.
                                                                 Winners of the inaugural Newcastle
                                                                     Permanent Challenge at Surfest
         A wide range of events and initiatives that                2005, Catherine Hill Bay No. 2
         benefit the population of the Hunter and                     team, Brianna Hodgson, Reece
         Central Coast in areas including health,                       Menzies and Tyler Williams.

         education, sport and family entertainment
         are closely associated with Newcastle
         Permanent’s name.
         The popularity of the Primary Schools
                                                           The Newcastle Permanent Challenge provides
         Mathematics Competition and Schools’
                                                           a vehicle for the region’s young surfers to
         Newspaper Competition continues to
                                                           participate in this landmark surfing festival.
         increase, providing opportunities for young
         people to apply and display for a wider           The popularity of water based recreation in
         audience, the skills learnt at school.            the regions in which we operate prompted
                                                           our partnership with Newcastle City Council
         Young people are also the direct beneficiaries
                                                           to develop and implement a water safety
         of our support for the Hunter and Central
                                                           program throughout local schools. Utilising
         Coast Junior Surf Lifesaving, the Wacky
         Wombat Literacy Program, and the Newcastle        the off-season resources of the Council’s

         Permanent Knights Junior Development              beach inspectors and life guards, the program

         Program, which reaches over 50,000 children       is designed to raise awareness and skills to
         across the Hunter and Central Coast every         enable people to safely enjoy the time they
         year. Indirectly, the entire community benefits   spend in and around water.
         through the enhancement of the fitness, skills    Major participation events such as the Hunter
         and understanding that participation in these     Bike Run, the Race for Research and Carols
         activities provides.                              by Candlelight events at Speers Point, Port
         An expansion of our involvement in Surfest in     Stephens and on the Central Coast provide
         2005 saw the creation of the Newcastle            families with entertainment, exercise, fun and
         Permanent Challenge. The event is open to         a chance to join with other community
         team entries from affiliated board clubs in the   members to enjoy the best of the things that
         Hunter and Central Coast with each team           our region has to offer.

13       comprising one junior, one female and             We have also added a new event to our
         one cadet.                                        sponsorship portfolio with the Newcastle

                                                        Permanent Lake Macquarie Half Marathon.
                                                        Widespread participation from local fitness
                                                        enthusiasts of all ages, and a large contingent of
                                                        competitors from outside the area mean that this
                                                        event benefits the entire region from both a health
                                                        and economic perspective.
                                                        The Society takes great pride in its corporate
                                                        citizenship and we believe that our contributions
                                                        actively enhance the quality of life for the people
                                                        of our region. We will continue to participate
                                                        actively in these areas and respond to requests for
                                                        assistance where benefits are available to significant
                                                        portions of our community.

        Sponsorship rights were secured for the new
Superscreen at EnergyAustralia Stadium, reinforcing
 our support for the Region’s leading sports facility

                                              Sharing with our

     I   The Newcastle Permanent
         Charitable Foundation                         The Charitable Foundation
     The Newcastle Permanent Charitable                     is an effective
     Foundation has now been in full operation
     for just over 12 months. Its first year of
                                                            means to deliver
     operation saw over $1 million distributed to              support to
     29 community based organisations.
                                                           our community.
     The groups that we have assisted to date
     represent a diverse cross section of interests
                                                      for the mentally ill and the disadvantaged,
     that are using their grants to deliver
                                                      palliative care, homeless youth services
     programs and initiatives that directly
                                                      and early intervention programs conducted
     benefit our community.
                                                      by the PCYC.
     To date areas of activity that have benefited
     from the Foundation’s support include the           Newcastle Permanent CEO, Fraser Read-Smith, left and
     arts, education, cancer research, autistic          University of Newcastle Vice Chancellor, Prof. Nick
                                                         Saunders jointly opened the new playground equipment
     children and children with disabilities,            at the Special Education Centre.The installation was
     Alzheimer’s and Diabetes sufferers, support         funded with a Foundation grant.

Community                                                                   (continued)

        Irrespective of the amount of funding sought,                          Office on qualifying for and attaining Deductible
        each application is assessed by the Foundation’s                       Gift Recipient (DGR) status was provided to
        Trustee against set criteria, all of which ensure that                 representatives from thirty different organisations
        if realised, the proposal will have the potential to                   during the half day session.
        improve the quality of life for a section of                           Feedback from participants was extremely positive,
        our community.                                                         and we plan to make these workshops a regular
                                                                               event in order to assist as many groups as possible
                                                                               to have an equal chance of securing Charitable
                                                                               Foundation assistance.
                                                                               The expansion of Newcastle Permanent to the
                                                                               Mid North Coast provides a further opportunity
                                                                               to extend the reach of the Charitable Foundation.
                                                                               Already applications are being received from
                                                                               organisations in the Mid North Coast area.

                                                                               2004-2005 Charitable Foundation

                                                                               Total 29
                                                                               Projects                        Health
 The Delta Society’s Pet Partners program arranges therapy pet visits to
                                                                                                              16 projects
hospitals, nursing homes and rehabilitation units.The dogs have proven         Breakdown                        (55%)
to be of assistance in speeding recovery.The Delta Society’s Pet Partners      of areas
                                program is supported by the Foundation.        supported
                                                                                                 4 projects
        The work of the Charitable Foundation is helping                                                          Community
                                                                                                                   7 projects
        to reinforce the already strong association of                                Arts                           (24%)
                                                                                    2 projects
        Newcastle Permanent’s name with community                                      (7%)

        support throughout the Hunter and Central
        Coast regions. Through the organisations
        that we have assisted, our name is becoming                            In terms of its scale of funding and operation,
        recognised even more widely in the context of                          the Charitable Foundation is a first in the areas in
        genuine community support.                                             which Newcastle Permanent operates. As a
        In order to ensure an equality of opportunity for                      mutual, Newcastle Permanent sees the Foundation
        groups seeking funding, the inaugural Charitable                       as an appropriate and effective way to ensure that
        Foundation workshop was held in early July.                            we are able to deliver maximum value to the
        Practical help on completing funding submissions,                      communities that we serve, and who have
        plus specialist advice from the Australian Taxation                    supported us for over one hundred years.
        Going                         forward
                                                           I   Strategy

     A modern, mutual                                      The Society’s strategy for achieving its
                                                           business goals and objectives is to:
     organisation, owned by
                                                           I   focus on providing retail financial services
     and run for the benefit                                   and avoiding other business areas where the
     of its members.                                           Society is unable to apply its expertise or
                                                               extract sufficient value for members;

                                                           I   enhance overall member value generated
                                                               through a combination of targeted
                                                               growth, improved efficiency and sensible
        I   Overview
                                                               product pricing;
        Newcastle Permanent is a modern, mutual
                                                           I   maintain the Society’s superior financial
        building society, owned by and run for the
                                                               strength by generating adequate profits
        benefit of its members.
                                                               in the long term to meet regulatory
        I   Objective                                          requirements, support future growth
                                                               and retain the confidence of members
        The Society’s objective is to deliver
                                                               and markets;
        benefits and long term value for members,
                                                           I   distribute the Society’s “mutuality dividend”
        while dealing with people fairly and
        honestly and making a useful contribution              fairly across all categories of members
        to the communities in which                            throughout its product range, reinforcing
        Newcastle Permanent operates.                          loyalty and increasing product cross
                                                               holdings; and
        I   Business Goals
                                                           I   use the Society’s resources to distribute and
        The Society’s business goals are:                      administer its products and services in
        I   to maximise value, made up of the                  effective ways, increasing efficiency and
            “mutuality dividend” and retained                  expanding its base of operations.
            profits, over the long term for the benefit
                                                           I   Our Commitment to Members
            of our current and future members; and
                                                           The Society will put members first by:
        I   to distribute a wide range of high quality,
                                                           I   dealing with members on a fair
            competitively priced, financial products and
                                                               and honest basis;
            services to our members that are readily
            available and delivered with speed, courtesy   I   protecting the privacy of members
17          and reliability.                                   (unless the law demands otherwise);
I   making every reasonable effort to meet the
    relevant needs of members by offering a wide
    range of high quality and well priced products
    and services;

I   ensuring that all products and services are
    promoted in a straightforward manner;

I   making our products and services readily
    accessible; and

I   making the Society’s premises a safe,
    convenient and user friendly environment.

I   Our Commitment
    to Employees
In working with its employees, the
Society will:

I   act with honesty, integrity and respect;

I   deliver challenging development and
    career opportunities;

I   engage our people and listen to their ideas;

I   encourage teamwork, collaboration
    and innovation;

I   provide competitive remuneration and reward
    high performance; and

I   provide a healthy, comfortable and friendly
    working environment.

I   Our Commitment to the Community
Through its active involvement in the community,
the Society will:
                                                          the value of
I   support and contribute to the well being and          Newcastle

    betterment of the communities in which                Permanent’s
                                                          products was
    Newcastle Permanent operates;
I   support initiatives that are relevant and effective   nationally
    in addressing community and welfare issues; and       with a number
                                                          of awards.
I   contribute financial and other support to
    worthwhile causes and events.                                         18
                                                            D i r e c t o r s’
     The names and details of the Directors in
     office at any time during or since the end of          Your Directors submit herewith the
     the year are set out below. Directors have             financial report of Newcastle
     been in office since the start of the financial
                                                            Permanent Building Society Limited
     year to the date of this report unless
                                                            and its controlled entities for the
     otherwise stated.
                                                            financial year ended 30 June 2005.
     Names, qualifications, experiences and
     special responsibilities

                                                       and has financial and management experience
                                                       with expertise in financial and management
                                                       analysis, commercial and organisational
                                                       reviews and audits, due diligence and
                                                       corporate governance. He is currently the
     Michael McDonald joined the Board of the          principal and Managing Director of business
     Society in 1999. He is a solicitor and            consulting firm M.D. Slater Consulting Pty
     Managing Director of the Incorporated Legal       Ltd. He is also a director of NIB Health Funds
     Practice McDonald Legal. He has practised         Limited, the Hunter Westpac Rescue
     extensively in the areas of property,             Helicopter Service Limited, the University of
     commercial and banking law for 30 years.          Newcastle Foundation, Corporate Internet
     Mr McDonald is Chairman of Newcastle              Business Information Systems Pty Ltd and
     Friendly Society Ltd and Chairman of the          Denis Veitch & Associates Pty Ltd. Mr Slater
     commercial agency Denis Veitch & Associates       also serves on the Board of the Newcastle
     Pty Ltd and is actively involved in the           Friendly Society Ltd and is a member of the
     operation of this company. He also serves as      Society's Corporate Governance and
     Chairman of the Board Newcastle Permanent         Nominations, Remuneration, Asset &
     Community Foundation Company Ltd which is         Liability, and Audit, Compliance & Risk
     the Trustee of the Newcastle Permanent            Management Committees.
     Charitable Foundation. Mr McDonald is the
     Chairman of the Society's Corporate
     Governance and Nominations, Due Diligence                            W.J.Elliott
     and Remuneration Committees.                                         CPA, MAICD

                         M.D.Slater                    Warren Elliott joined the Board of the Society
                         BCom, MBA, FCPA, FCIS,
                                                       in 1991. Mr Elliott is a qualified accountant
                         FAICD, FTIA, FAIM, FCIM
                         (Deputy Chairman)             with over 40 years' experience in accounting,
                                                       public administration, electronic data
     Michael Slater joined the Board of the Society    processing and management, having retired as
19   in 2002. Mr Slater is a qualified accountant      General Manager of Shortland Electricity in

  1994. Mr Elliott is a former Chairman/Director of
  Advance Energy. Mr Elliott is a member of the
  Australian Society of Certified Practising                               D.E.Shanley
                                                                           BCom, CFP, GAICD
  Accountants and the Australian Institute of
  Company Directors. Mr Elliott is presently
  Chairman of NPBS Securities Pty Ltd and
                                                        David Shanley joined the Board of the Society in
  also serves on the Boards of Hunter Water
                                                        2003. His experience in the finance sector spans
  Corporation and Newcastle Friendly Society Ltd.
                                                        24 years, with a background in the building society
  Mr Elliott is also a member of the Society's Audit,
                                                        and credit union industry. For 17 years Mr Shanley
  Compliance & Risk Management, and Due
                                                        has been an adviser to personal and corporate
  Diligence Committees.
                                                        clients on technical financial planning issues.
                                                        Mr Shanley is a Certified Financial Planner (CFP),
                                                        a member of the Financial Planning Association
                     W.B.Lewis                          and a graduate of the Australian Institute of
                     AM, FLGMA (RET.)                   Company Directors. Mr Shanley is a member of
                                                        the Society's Remuneration, and Audit,
                                                        Compliance & Risk Management Committees.
  Barrie Lewis joined the Board of the Society in
  1995. Mr Lewis is a qualified accountant with over
  40 years' experience in commercial and public
  administration, property development,                                     P.J.Neat
  accountancy and management, having retired as                             MAICD, AMAMI CPM

  Town Clerk of the City of Newcastle in 1992.
  Mr Lewis also serves on the Boards of Newcastle
  Friendly Society Ltd and Newcastle Permanent          Phil Neat joined the Board in 2003. He is a
  Community Foundation Company Ltd which is the         marketing and public affairs consultant and
  Trustee of the Newcastle Permanent Charitable         Managing Director of a marketing communications
  Foundation. Mr Lewis is also Chairman of the          consultancy group, which provides counsel and
  Society's Audit, Compliance & Risk Management         professional services throughout Australia to a
  Committee and is a member of the Asset &              number of corporations, governments and their
  Liability and Due Diligence Committees. He is         agencies, and national organisations. He is a former
  presently the Chairman of the Newcastle Lake          journalist with the ABC and Fairfax. Mr Neat also
  Macquarie Ex-services Memorial Centre, Director       serves on the Board of the Newcastle Permanent
  of HGT Australia Ltd, HGT Aust Pty Ltd and a          Community Foundation Company Ltd, which is
  Trustee of the Newcastle Regional Disaster Relief     the Trustee of the Newcastle Permanent Charitable
  Fund. Mr Lewis is a fellow of the Local               Foundation. Mr Neat is also a member of the
  Government Managers Australia and a member of         Corporate Governance and Nominations and
  the Australian Institute of Company Directors.        Due Diligence Committees.                              20
     General Board and Board Committee

     I   General Board
                                         Board                    1) In addition to formal Board meetings, the Directors were also involved in:
                                                                     - workshops on matters including management, marketing and brand issues,
                        No. of            No.         Leave of         and business planning;
                       Meetings 1       Attended      Absence 2      - strategy planning sessions; and
                                                                     - consideration of resolutions via electronic processes, including
     M.P. McDonald          19            18             -             "circulating" resolutions,
                                                                  which are not included in the attendance records.
     M. Slater              19            19             -
                                                                  2) Leave of absence may be granted by the Board in advance to excuse a
     W.B. Lewis             19            19             -        Director from attending a particular meeting. That meeting is then not included
     W.J. Elliott           19            17             -        as a required attendance.
     P. Neat                19            18             -        3) Committee attendances are irregular due to changes in Committee
     D. Shanley             18            17             1        composition on 19 November 2004 as explained in the Corporate
                                                                  Governance Statement.
                                                                  The Corporate Governance and Nominations Committee conducted a
                                                                  corporate governance workshop with Competitive Dynamics Pty Ltd during
                                                                  the year, and other functions of the Committee were discharged by the full
     I   Committee Attendance 3                                   Board at formal meetings or in other workshops.

                     Audit, Compliance
                                                 Remuneration                                Due Diligence             Asset and Liability
                     & Risk Management
                                                  Committee                                   Committee                   Committee

                      No. of    No.     No. of    No.                                    No. of    No.     No. of    No.
                     Meetings Attended Meetings Attended                                Meetings Attended Meetings Attended

     M.P. McDonald      -           -            5           5    M.P. McDonald               1             1              1             1
     M. Slater          7           6            3           3    M. Slater                   1             1             10             9
     W.B. Lewis         7           7            2           2    W.B. Lewis                  -             -             10            10
     W.J. Elliott       5           4            2           2    W.J. Elliott                -             -              -             -
     P. Neat            -           -            -           -    P. Neat                     1             1              -             -
     D. Shanley         7           6            3           2    D. Shanley                  1             1              -             -

     I   Principal Activities                                       I   Operating Results

     The principal activity of the entities within the              The consolidated profit of the entity after
     consolidated entity is the provision of a range                providing for income tax has increased by 0.9%
     of financial products and services to members.                 to $34.1 million, (2004: 5.2% increase to
                                                                    $33.8 million).
     The Society has controlled entities whose
     principal activity includes a trustee company of               I   Significant Changes in the State
     a regulated superannuation fund, a charitable                      of Affairs
     trust and a special purpose securitisation trust.              There were no significant changes in the state

     The Society acts as an agent for the Newcastle                 of affairs of the consolidated entity during the
                                                                    financial year.
     Friendly Society Ltd.
                                                                    I   After Balance Date Events
     There has been no other significant change in
     the nature of these activities during the year                 Since the end of the financial year and to the
     ended 30 June 2005.                                            date of this report, in the opinion of the

                                                                                     Newcastle Permanent Building Society Limited
     Directors, no item, transaction or event of a                                 I   Indemnifying Officers
     material and unusual nature, which would effect
                                                                                   During or since the end of the financial year the
     substantially the result of the consolidated
                                                                                   company has paid premiums to insure each of the
     entity’s operation for the next succeeding year,
                                                                                   Directors against liability for costs and expenses
     has occurred.
                                                                                   incurred by them in defending any legal
     I   Review of Operations                                                      proceedings arising out of their conduct while
                                                                                   acting in the capacity of director of the company,
     The consolidated entity has shown sustained
                                                                                   other than conduct involving a wilful breach of
     growth and satisfactory performance from all
                                                                                   duty in relation to the company.
     operating entities. Total assets increased by 19.2%
     to $4.3 billion (2004: 23.3% to $3.6 billion).                                I   Auditor
     I   Future Developments                                                       PricewaterhouseCoopers continues in office
                                                                                   in accordance with section 327 of the
     There are no likely developments that are expected
                                                                                   Corporations Act 2001.
     to be prejudicial to the interests of members.
                                                                                   A copy of the auditor’s independence declaration
     I   Environmental Issues                                                      as required under Section 307C of the
     The entity’s operations are not regulated by any                              Corporations Act 2001 is set out below.
     significant environmental regulation under a law of                           I   Company Secretary
     the Commonwealth or of a State or Territory.
                                                                                   See page 28.
     I   Rounding of Amounts                                                       Signed in accordance with a resolution of
     The amounts in the financial accounts have                                    the Directors:
     been rounded to the nearest thousand dollars
     in accordance with ASIC Class Order 98/100.
                                                                                   M.P. McDonald                  W.B. Lewis
     The Society is an entity to which the Class
                                                                                   Chairman                       Director
     Order applies.                                                                Newcastle, 16 September 2005

     Auditor’s Independence Declaration

     As auditor for the audit of Newcastle Permanent Building Society Ltd for the year ended 30 June 2005,
     I declare that to the best of my knowledge and belief, there have been:

     a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation
     to the audit; and

     b) no contraventions of any applicable code of professional conduct in relation to the audit.
     This declaration is in respect of Newcastle Permanent Building Society Ltd and the entities it controlled
     during the period.

     W M Russell                                                                                                           Newcastle
     Partner                                                                                                       16 September 2005

     Liability is limited by the Accountant’s Scheme under the Professional Standards Act 1994 (NSW)

Newcastle Permanent Building Society Limited
             Corporate                                          Governance
                                                                 I   approving and monitoring financial,

     I   The Board of Directors                                      regulatory and other reporting.

     This Statement outlines the main                            I   Composition of the Board
     corporate governance practices in                           The names of the Directors of the Society

     place throughout 2004/2005.                                 are set out in the Directors’ report on
                                                                 pages 19 & 20 of this report.

                                                                 The composition of the Board is determined
             I   Role of the Board                               using the following principles:

             The Board’s primary role is to govern the           I   a minimum of five and not more than
             Society so that long-term member value is               seven Directors, with a broad range of
             enhanced and protected. The Board is                    relevant expertise;
             responsible for the overall corporate
                                                                 I   a majority of independent non-executive
             governance of Newcastle Permanent.
             Responsibilities include:
                                                                 I   a relevant blend of personal experience
             I   providing leadership to the organisation by
                                                                     in accounting and financial management,
                 establishing rules and procedures, corporate
                                                                     legal skills, local contacts and networks,
                 values and governance responsibilities;
                                                                     and Chief Executive Officer level
             I   overseeing the performance and activities of        business experience;
                 Newcastle Permanent through agreed
                                                                 I   a non-executive independent Director
                 strategies and goals;
                                                                     appointed as Chairman; and
             I   approving and monitoring capital
                                                                 I   enough Directors to serve on various
                                                                     committees without overburdening the
             I   overseeing the management of Newcastle              Directors or making it difficult for them to
                 Permanent’s business;                               fully discharge their responsibilities.
             I   ensuring that appropriate controls are in
                                                                 Directors are required to have relevant
                 place to manage risk;
                                                                 experience in a field which is complementary
             I   ensuring that an effective legal and            to the Society’s activities, or to have
                 regulatory compliance system is in place        appropriate qualifications and experience
                 and monitored; and                              sufficient to provide meaningful contributions

  to the operation of the Board, and to its role in   to address any specific significant matters that
  overseeing the proper functioning of management.    may arise.

                                                      To assist in the execution of its responsibilities,
  I   Remuneration of Directors and
      Senior Executives                               the Board has established a number of
                                                      Board Committees.
  The Remuneration Committee considers
                                                      The Committees have written Charters, which
  and makes recommendations to the Board
                                                      contain the mandates and operating procedures
  regarding the remuneration of Directors and
                                                      of the Committee. The Committee Charters
  Senior Management. It is also responsible
  for making recommendations to the Board             are reviewed on a regular basis. The Board has

  about incentive performance packages,               also established a framework for the

  superannuation entitlements, retirement             management of the Society including a system

  and termination entitlements.                       of internal control, a business risk management
                                                      process and the establishment of appropriate
  I   Independent Professional Advice                 ethical and behavioural standards.

  Each Director has the right of access to all
                                                      I   Committees
  relevant Society information and to the
  Society’s executives and, subject to prior          The composition of the Board Committees is
  consultation with the Chairman, may seek            regularly reviewed to match skills of Directors
  independent professional advice from a suitably     with the work of the relevant Committee, and
  qualified advisor at the Society’s expense.         to balance the level of time that each of the
  The Director must consult with an advisor           Directors must dedicate to the governance of
  suitably qualified in the relevant field, and       Newcastle Permanent. The Board’s Committees
  obtain the Chairman’s approval of the fee           were amended on 19 November 2004.
  payable for the advice before proceeding with
                                                      I   Corporate Governance &
  the consultation. A copy of the advice received
                                                          Nomination Committee
  by the Director is made available to all other
  members of the Board.                               The Corporate Governance & Nomination
                                                      Committee oversees the appointment and
  I   Board Processes
                                                      induction process for Directors and Committee
  The full Board currently holds a minimum of         members, and makes recommendations to the
  11 scheduled meetings each year, plus strategy      Board on the selection, appointment and
  meetings, workshops and any extraordinary           succession planning process of the company’s
  meetings at such other times as may be necessary    Chief Executive Officer.
     Corporate                                        Governance
     The Corporate Governance & Nomination             activities the Society may decide to pursue or
     Committee also uses an external facilitator to    undertake. It is also authorised to review and
     annually review the effectiveness of the          make recommendations about marketing
     Board, its committees, individual Directors,      plans and member communications.
     and Chief Executive Officer.
                                                       Committee Members
     Committee Members                                 Mr M.P. McDonald (Chairman)
     Mr M.P. McDonald (Chairman)                       Mr P.J. Neat
     Mr M.D. Slater                                    Mr W.J. Elliott (appointed 19/11/04)

     Mr P.J. Neat                                      Mr W.B. Lewis (appointed 19/11/04)

     Mr D.E. Shanley                                   Mr M.D. Slater (retired 19/11/04)
                                                       Mr D.E. Shanley (retired 19/11/04)
     I   Audit, Compliance & Risk
         Management Committee                          I   Remuneration Committee
     The Audit, Compliance & Risk Management           The Remuneration Committee reviews and
     Committee has a documented charter,               makes recommendations to the Board on
     approved by the Board. All members must           remuneration packages and policies applicable
     be non-executive Directors. The Chairman          to the Chief Executive Officer, Senior
     of this Committee shall not be the Chairman       Executives and Directors. It is also
     of the Board. The committee advises on the        responsible for making recommendations to
     establishment and maintenance of a                the Board about incentive performance
     framework of internal control and                 packages, superannuation entitlements,
     appropriate ethical standards for the             retirement and termination entitlements.
     management of the consolidated entity.
                                                       Remuneration levels are competitively set to
     Committee Members                                 attract and retain appropriately qualified and
     Mr W.B. Lewis (Chairman)                          experienced directors and senior executives.

     Mr M.D. Slater                                    The Remuneration Committee obtains
                                                       independent advice on the appropriateness
     Mr D.E. Shanley
                                                       of remuneration packages and trends in
     Mr W.J. Elliott (appointed 19/11/04)
                                                       comparable organisations.

     I   Due Diligence Committee                       Committee Members

     The Due Diligence Committee is authorised         Mr M.P. McDonald (Chairman)

     to investigate and make recommendations to        Mr M.D. Slater (appointed 19/11/04)
     the Board regarding the conduct of any new        Mr D.E. Shanley (appointed 19/11/04)
Statement                                   (continued)

  Mr W.B. Lewis (retired 19/11/04)                          compliance risks for the Society. The Chief
  Mr W.J. Elliott (retired 19/11/04)                        Executive Officer has declared in writing to
                                                            the Board, that the financial reporting risk
  I   Asset and Liability Committee                         management and associated compliance and
  The Asset and Liability Committee is not a Board          controls have been assessed and found to be
  Committee, but rather a management committee              operating efficiently and effectively. The
  that is chaired by the Chief Financial Officer. Its       operational and other compliance risk management
  role is to establish and monitor a strategy for           controls and procedures have also been assessed
  Newcastle Permanent’s composition of assets and           and found to be operating efficiently and
  liabilities having regard to its broad strategic goals,   effectively. All risk assessments covered the whole
  and factors including interest rate movements,            financial year and the period up to the signing
  liquidity and capital adequacy. It is required to have    of the annual financial report for all material
  two Directors on the committee. Presently, those          operations of the Society.
  Directors are:                                            The Board also monitors risk management
  Mr W.B. Lewis                                             strategies developed to protect against and or
  Mr M.D. Slater                                            mitigate identified risks to the Society.

  I   Associated Companies                                  I   Quality and Integrity of Personnel

  Newcastle Permanent Building Society has several          Employment of appropriately qualified personnel,
  associated companies which are consolidated into          together with training and development and
  the group for reporting purposes. These associated        appropriate remuneration and incentives with
  companies include:                                        regular performance reviews, creates an
      - Newcastle Friendly Society Limited                  environment of co-operation and constructive

      - Newcastle Permanent Community Foundation            dialogue with employees and senior management.

       Company Limited
                                                            I   Financial Reporting
      - Permanent Financial Services Pty Ltd
                                                            The Chief Executive Officer and the Chief
  I   Risk Management                                       Financial Officer have declared, in writing to the
  The Board oversees the establishment,                     Board that the Society’s financial reports are
  implementation, and annual review of the                  founded on a sound system of risk management
  company’s Risk Management System. Management              and internal compliance and control which
  has established and implemented the Risk                  implements the policies adopted by the Board.
  Management System for assessing, monitoring and           Monthly actual results are reported against budgets
  managing operational, financial reporting, and            approved by the Directors. Furthermore, revised
     Corporate                                        Governance
     forecasts for the year are prepared regularly         maintaining appropriate, core Society values
     when required. Convergence with                       and objectives;
     International Financial Reporting Standards
                                                       I   fulfilling responsibilities to members and
     (IFRS) is a key current financial reporting
                                                           customers by maintaining high standards of
     project, and a steering committee has been
                                                           product quality, service standards and
     established to ensure a smooth transition to
                                                           commitments to fair value;
     IFRS reporting.
                                                       I   ensuring compliance with responsibilities to
     I   Conflict of interest
                                                           the individual, such as privacy, use of
     Directors must keep the Board advised, on an          privileged or confidential information and
     ongoing basis of any interest that could              conflict resolution;
     potentially conflict with those of the
                                                       I   dealing with and managing conflicts
     company. The Board has developed
                                                           of interest in accordance with
     procedures to assist Directors to disclose
                                                           approved policies;
     potential conflicts of interest.
                                                       I   controlling and monitoring corporate
     Where the Board believes that a significant
     conflict exists for a Director on a Board             opportunities by preventing Directors and
     matter, the Director concerned does not               employees from taking advantage of
     receive the relevant Board papers and is not          property, information or position for
     present at the meeting whilst the item is             personal gain;
     considered and does not vote on the matter.
                                                       I   ensuring confidentiality of corporate
     Details of Directors’ related-entity
     transactions with the Society and consolidated
                                                       I   dealing fairly with each other, members and
     entity are set out in Note [29] “Related Party
     Disclosures” in the Society’s full financial          third parties;
                                                       I   protecting and properly using the
     I   Code of Conduct                                   company’s assets;

     The consolidated entity has advised each          I   compliance with all laws; and
     director, manager and employee that they
                                                       I   reporting of unethical behaviour.
     must comply with the Society’s Code of
     Conduct by:                                       I   Communication with Members
     I   aligning the behaviour of the Board and       The Board communicates with members by
27       management with the code of conduct by        providing information as follows:
Statement                                     (continued)

  I   the concise report is available on request to all   practise in the Supreme Court of NSW and the
      members and includes relevant information           High Court of Australia in 1993 and to the
      about the operations of the Society during the      Supreme Court of South Australia in 2001.
      year, changes in the state of affairs and details   He has practised law extensively in the areas of
      of future developments;                             corporate and commercial law, both in private
                                                          practice and in company legal roles. Mr Yost has
  I   newsletters are distributed to members half-
                                                          worked at partnership level in private practice and
      yearly providing a regular basis to provide
                                                          has held Head Legal Counsel roles in a subsidiary
      information to members on developments and
                                                          of an Australian blue-chip company and in an
      issues that may be of interest;
                                                          Australian subsidiary of a large multi-national
  I   general information is available on the company’s   company. He is a member of the Australian
      internet site; and                                  Corporate Lawyers Association, the Law Society

  I   the external auditor is requested to attend the     of NSW and an Affiliate Member of Chartered

      Annual General Meeting to answer any questions      Secretaries Australia.

      concerning the audit and the content of the
      auditor’s report.

  The Board encourages full participation of
  members at the Annual General Meeting,
  to ensure a high level of accountability
  and identification with the Society’s strategy
  and goals. Important issues are presented to
  the members as single resolutions.
  The members are requested to vote on the
  appointment and aggregate remuneration of
  Directors, and changes to the Constitution.
  Copies of the Constitution are available to any
  member who requests it.

  I   Company Secretary

  Mr Andrew Yost is the Company Secretary of the
  Society, having been appointed to that position on
  19 August 2004. He is a qualified lawyer holding a
  masters degree in Law (LLM). He was admitted to                                                               28
     Statements of financial performance
     For the year ended 30 June 2005

                                                                                Parent               Consolidated
                                                                                Entity                     Entity

                                                                                  2005           2004           2005         2004
                                                                      Note       $’000          $’000          $’000        $’000

     Interest revenue                                                 1,2     237,336        202,058        252,467      203,711
     Interest expense                                                  1     (133,564) (104,760)         (145,800)      (105,618)
     Net interest revenue                                                     103,772         97,298        106,667        98,093
     Other revenue from ordinary activities                            1       19,308         21,525         17,723        20,359
     Total operating revenue                                                  123,080        118,823        124,390      118,452
     Bad and doubtful debts expense                                    2        (346)           (479)         (346)         (479)
     Depreciation and amortisation expenses                                    (3,783)        (3,105)       (3,783)       (3,105)
     Donation to Newcastle Permanent Charitable Foundation                     (3,000)        (5,007)               -             -
     Other expenses from ordinary activities                                  (66,718)      (62,069)       (67,878)      (60,799)
     Profit from ordinary activities before income tax                         49,233         48,163         52,383        54,069
     Income tax expense relating to ordinary activities                       (14,824)      (14,629)       (15,235)      (14,967)

     Net profit                                                                34,409         33,534         37,148        39,102
     Net profit attributable to outside equity interest                              -               -      (3,043)       (5,291)
     Net profit after income tax attributable to
         members of Newcastle Permanent Building Society Ltd                   34,409         33,534         34,105        33,811
     Net increase in asset revaluation reserve                                       -        12,808                -      12,808

     Total revenues, expenses or valuation adjustments
     attributable to members of Newcastle Permanent
     Building Society Ltd and recognised directly in equity                          -        12,808                -      12,808

     Total changes in equity other than those resulting
     from transactions with owners as owners                                   34,409         46,342         34,105        46,619

     The accompanying notes form part of these financial statements

                                                                                         Newcastle Permanent Building Society Limited
Statements of financial position
For the year ended 30 June 2005

                                                 Parent          Consolidated
                                                 Entity                Entity

                                                   2005       2004       2005      2004
                                                  $’000      $’000      $’000     $’000

Cash and liquid assets                          106,244   121,289     125,654   125,183
Accrued receivables                              10,590     7,099       7,113     6,786
Investment securities                           666,105   523,168     666,105   523,168
Loans and advances                             3,248,541 2,732,517   3,478,461 2,926,738
Other investments                                   494       494         294       294
Property, plant and equipment                    42,346    41,577      42,346    41,577
Deferred tax assets                               2,502     1,989       2,502     1,989
Other assets                                      2,397     1,818       2,397     1,818
Total Assets                                   4,079,219 3,429,951   4,324,872 3,627,553

Deposits                                       3,129,804 2,988,066   3,119,523 2,982,713
Borrowings                                      478,738          -    724,951   196,649
Payables and other liabilities                   35,147    38,811      34,671    37,709
Tax liabilities                                   1,562     3,907       1,785     4,071
Provisions                                        5,804     5,412       5,842     5,442
Total Liabilities                              3,651,055 3,036,196   3,886,772 3,226,584

Net Assets                                      428,164   393,755     438,100   400,969

Members' Funds
Reserves                                         41,133    41,133      41,133    41,133
Retained profits                                387,031   352,622     387,065   352,960
Equity attributable to members of
the parent entity                               428,164   393,755     428,198   394,093
Outside equity interest in controlled entity          -          -      9,902     6,876

Total Members’ Funds                            428,164   393,755     438,100   400,969

Newcastle Permanent Building Society Limited
     Statements of cash flows
     For the year ended 30 June 2005

                                                                          Parent               Consolidated
                                                                          Entity                     Entity

                                                                           2005           2004          2005          2004
                                                                          $’000          $’000         $’000         $’000
                                                                         Inflows         Inflows      Inflows        Inflows
                                                                      (Outflows)      (Outflows) (Outflows)      (Outflows)
     Cash flows from operating activities
     Interest received from loans and advances                          200,650        176,997       215,017       178,637
     Interest from investment securities                                 38,432         24,469         40,149        23,853
     Dividends received                                                      10              61             10            35
     Other income                                                           212                -             -             -
     Fees and other commissions received                                 14,094         15,308         37,049        15,338
     Interest paid on deposits                                        (130,824) (100,953)          (143,060)     (102,437)
     Cash paid to suppliers and employees                               (67,223)       (53,045)     (87,049)       (46,743)
     Income tax paid                                                    (17,690)       (16,847)     (18,047)       (17,221)
     Net cash flows from operating activities                            37,661         45,990         44,069        51,462

     Cash flows from investing activities
     Net movement in investments                                      (143,091) (109,369)          (143,091)     (109,369)
     Net movement in loans, advances                                  (552,085) (463,885)          (551,897)     (463,885)
     Payments for property, plant and equipment                          (4,799)        (6,564)       (4,799)       (6,564)
     Proceeds from sale of property, plant and equipment                    221             283           221           283
     Proceeds from sale of investments                                      760          5,430            760         5,430
     Proceeds from liquidation of controlled entity                               -      1,550               -             -
     Net cash flows from investing activities                         (698,994) (572,555)          (698,806)     (574,105)

     Cash flows from financing activities
     Net movement in deposits                                           131,851        424,138       126,923       422,463
     Net movement in loans securitised                                   35,699        194,221               -             -
     Proceeds from borrowings                                           448,977                -     448,977       195,711
     Proceeds from commercial paper                                      29,761                -       79,325           166
     Net movement in outside equity interest reserves                             -            -         (17)            (9)
     Net cash flows from financing activities                           646,288        618,359       655,208       618,331

     Net increase/(decrease) in cash held                               (15,045)        91,794            471        95,688
     Cash at the beginning of financial year                            121,289         29,495       125,183         29,495
     Cash at the end of financial year                                  106,244        121,289       125,654       125,183

31   The accompanying notes form part of these financial statements               Newcastle Permanent Building Society Limited
Discussion and analysis of financial statements
For the year ended 30 June 2005

a. Information on the Concise Financial Report

The financial statements and other specific disclosures have been derived from the Newcastle Permanent Building Society Ltd
(the Society) and its Controlled Entities (the consolidated entity) full financial report for the financial year. Other information
included in the concise financial report is consistent with the consolidated entity's full financial report.

The concise financial report does not, and cannot be expected to, provide as full an understanding of the financial performance,
financial position and financing and investing activities of the consolidated entity as the full financial report.

A copy of the consolidated entity's 2005 Annual Financial Report, including the independent audit report, is available to all
members and will be sent to members without charge upon request.The 2005 Annual Financial Report can be requested by
telephone on 13 19 87.

b. Consolidated Statements of Financial Performance

Total interest revenue increased by $48.8 million or 23.9% from the prior year.The main reason for this is the increase in
interest earning assets of $695.1 million or 19.4%. Interest revenue was also positively impacted by the increase in the Reserve
Bank cash rate by 0.25% in March 2005.The Society delayed passing on this rise to variable rate borrowers until April 2005.

Interest expense increased by $40.2 million or 38.0% from the prior year.The percentage increase is larger than the increase
in interest revenue because the Society passed on higher interest rates to fixed term investors earlier than the rise in the
Reserve Bank cash rate.This is because fixed term interest rates rose prior to the official rate rise in anticipation of the rise.
The increase in interest expense has also been impacted by the diversification of the Society's funding base.This diversification
has been achieved through the introduction of non member funding sources (wholesale funding) in addition to traditional
member funding (retail deposits). The Society previously established a securitisation funding program and more recently has
established a commercial paper program.This enabled the Society to readily tap the wholesale funding market and this funding
has a higher cost than traditional member deposits.The Society commenced this funding diversification in April 2004 and
consequently interest expense in the current financial year reflects a full year charge on these liabilities compared to less than
three months in 2003/04.

Non-interest revenue fell by $2.6 million or 12.9% from the prior year. Prior year’s revenue was significantly impacted from
the sale of Cashcard shares. Removing the impact of the sale of Cashcard shares, non-interest income increased by $2.2 million
or 14.5%.The rise in non-interest revenue was largely due to the increase in commission revenue achieved from higher
insurance product sales, and increased fee revenue from higher volumes for ATM, EFTPOS and Visa transactions.The Society
does not charge any fees on Internet Banking or BPay ® transactions.

Consolidated non-interest expenses excluding bad and doubtful debts increased by $7.8 million or 12.1%.The significant
increases were mainly attributable to increased personnel costs, depreciation and amortisation charges and electronic

Newcastle Permanent Building Society Limited                                                        ® Registered to BPAY Pty Ltd ABN 69 079 137 518
     Discussion and analysis of financial statements
     For the year ended 30 June 2005

     transaction processing costs.The increase in personnel costs incurred was in relation to the Society's continued growth and
     expansion, in particular, the branch network. Higher depreciation and amortisation charges related to new branches and
     capitalisation of branch refurbishments and expansion of the Society’s ATM network over the past two years. Higher electronic
     processing costs are consistent with the growth in the annual volume of total electronic transactions.

     c. Consolidated Statements of Financial Position

     Total assets of the consolidated entity increased by $697.3 million or 19.2%, whilst total liabilities increased by $660.2 million
     or 20.5%.The increase in total assets reflects the growth in both loans and advances of $551.7 million or 18.9%, and
     investment securities of $142.9 million or 27.3%.The increased level of investment securities reflects the Society’s policy of
     maintaining a liquidity position well in excess of regulatory requirements.This policy is to ensure that the Society will have the
     ability to fund loan asset growth in the short term without having undue impact on both the operational and/or regulatory
     liquidity requirements.The total of investment securities and cash as a percentage of total liabilities was 20.4% at the end of
     the financial year compared to 20.1% at the end of the previous financial year.

     The growth in total liabilities is attributable to the increase in non member funding of $528.3 million and increased member
     deposits of $136.8 million.

     Equity attributable to members of the parent entity increased by the current year after tax profit of $34.1 million or 8.7% to
     $428.2 million.Total equity of the consolidated group, including outside equity interest increased by $37.1 million or 9.3% to
     $438.1 million.

     d. Consolidated Statements of Cash Flows

     The consolidated statement of cash flows shows net cash flows from operating activities decreased by $7.4 million to $44.1
     million.This was mainly due to the increase in operational and funding costs noted in Section b. (set out on page 32) and
     timing of cash receipts and payments.

     Cash outflows from investing activities increased by $124.7 million or 21.7% to $698.8 million (2004: $574.1 million).The
     two largest increases were the net movement of loans and advances of $551.9 million (2004: $463.9 million), and the net
     movement in investment securities of $143.1 million (2004: $109.4 million).

     Cash inflows from financing activities increased by $36.9 million or 6.0% to $655.2 million (2004: $618.3 million).The major
     components of this inflow were a result of the net increase in member deposits of $126.9 million (2004: $422.5 million) and
     proceeds from borrowings comprising the issue of commercial paper and certificates of deposit issued by the Society of $528.3
     million (2004: $195.9 million).

                                                                                           Newcastle Permanent Building Society Limited
Notes to the financial statements
For the year ended 30 June 2005

The following table shows the average balance for each of the major categories of interest-bearing assets and
liabilities, the amount of interest revenue or expense and the average interest rate.


                                                                       Average                      Average
                                                                          $’000           $’000          %

Interest revenue 2005
Cash and liquid assets                                                   91,553           4,611        5.04%
Investment securities                                                  571,259           32,802        5.74%
Loans and advances                                                   3,145,156          215,054        6.84%
                                                                     3,807,968          252,467        6.63%

Interest expense 2005
Member deposits                                                      3,053,378          126,510        4.14%
Certificates of deposits                                               116,344            6,305        5.80%
Commercial paper                                                       233,680           12,985        5.56%
                                                                     3,403,402          145,800        4.28%
Net interest revenue 2005                                                               106,667

Interest revenue 2004
Cash and liquid assets                                                   52,512           2,467        4.70%
Investment securities                                                  426,896           22,607        5.30%
Loans and advances                                                   2,705,825          178,637        6.60%
                                                                     3,185,233          203,711        6.40%
Interest expense 2004
Member deposits                                                      2,798,290          104,327        3.73%
Commercial paper                                                         23,645           1,291        5.46%
                                                                     2,821,935          105,618        3.74%
Net interest revenue 2004                                                                98,093

Newcastle Permanent Building Society Limited
     Notes to the financial statements
     For the year ended 30 June 2005

                                                                            Parent                 Consolidated
                                                                            Entity                       Entity

                                                                             2005           2004           2005         2004
                                                                            $’000          $’000          $’000        $’000

     Included in the profit from ordinary activities before
     income tax are the following items of operating revenue:
     Interest revenue (Note 1)                                             237,336       202,058        252,467       203,711

     Non-interest revenue
     Dividends                                                                   10             61            10            35
     Fees                                                                   10,448         10,094        10,580        10,099
     Commissions                                                             5,258          4,052         5,262         4,062
     Proceeds on sale of plant and equipment                                    221           283            221           283
     Proceeds on sale of investments                                            760         5,430            760        5,430
     Proceeds from liquidation of controlled entity                                 -       1,550                 -            -
     Other                                                                   2,611              55           890           450
     Total                                                                  19,308         21,525        17,723        20,359
     Revenue from ordinary activities                                      256,644       223,583        270,190       224,070

     Net gain/(loss) on disposal of plant & equipment                         (26)            (73)          (26)          (73)
     Net gain/(loss) on disposal of investments                                 760         5,007            760        5,007

     The Society's group operations are operated wholly within New South Wales and within the following segments:
     Financial products
     Provision of financial services and products in the form of taking deposits and providing financial accommodation
     as prescribed by the Society's and Friendly Society's Constitution.
     Community Support
     Supporting a dedicated fund for the benefit of the community in the regions in which it operates.

     The registered office and principal place of business of the company is:
     307 King Street Newcastle West, NSW 2302.
     Further financial information can be obtained from the full financial report which is available to members, free of
     charge, on request. A copy may be requested by calling 13 19 87.

                                                                                    Newcastle Permanent Building Society Limited
Directors’ Declaration
For the year ended 30 June 2005

In the opinion of the Directors of Newcastle Permanent Building Society Ltd, the accompanying concise financial report of
the consolidated entity, comprising Newcastle Permanent Building Society Ltd and its controlled entities for the year ended
30 June 2005, set out on pages 29 to 35 complies with the Accounting Standard AASB 1039 : Concise Financial Reports.

The financial statements and specific disclosures included in the concise financial report have been derived from the full
financial report for the year ended 30 June 2005.

The concise financial report cannot be expected to provide as full an understanding of the financial performance, financial
position and financing and investing activities of the consolidated entity as the full financial report, which as indicated in Note
(a) is available on request.

This declaration is made in accordance with a resolution of the Directors.

Dated at Newcastle this 16th day of September 2005

M.P. McDonald Chairman

W.B. Lewis Director

Newcastle Permanent Building Society Limited
     Auditor’s Report
     For the year ended 30 June 2005

     Independent audit report to the members of Newcastle Permanent Building Society Ltd
     Matters relating to the electronic presentation of the audited financial report
     This audit report relates to the concise financial report of Newcastle Permanent Building Society Ltd (the Society) for the financial year
     ended 30 June 2005 included on Newcastle Permanent Building Society Ltd’s web site. The Society’s directors are responsible for the
     integrity of the Newcastle Permanent Building Society Ltd’s web site. We have not been engaged to report on the integrity of this web site.
     The audit report refers only to the concise financial report identified below. It does not provide an opinion on any other information which
     may have been hyperlinked to/from the concise financial report. If users of this report are concerned with the inherent risks arising from
     electronic data communications they are advised to refer to the hard copy of the audited concise financial report to confirm the information
     included in the audited concise financial report presented on this web site.
     In our opinion, the concise financial report of Newcastle Permanent Building Society Ltd for the year ended 30 June 2005 complies with
     Australian Accounting Standard AASB 1039: Concise Financial Reports.
     This opinion must be read in conjunction with the rest of our audit report.
     The concise financial report and directors’ responsibility
     The concise financial report comprises the consolidated statement of financial position, consolidated statement of financial performance,
     consolidated statement of cash flows, discussion and analysis of and notes to the financial statements, and the directors’ declaration for
     Newcastle Permanent Building Society Ltd (the Society) for the year ended 30 June 2005.
     The directors of the Society are responsible for the preparation and presentation of the financial report in accordance with Australian
     Accounting Standard AASB 1039: Concise Financial Reports.
     We conducted an independent audit of the concise financial report in order to express an opinion on it to the members of the Society. Our
     audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the concise
     financial report is free of material misstatement.The nature of an audit is influenced by factors such as the use of professional judgement,
     selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an
     audit cannot guarantee that all material misstatements have been detected. For further explanation of an audit, visit our website
     We also performed an independent audit of the full financial report of the Society for the financial year ended 30 June 2005. Our audit
     report on the full financial report was signed on 16 September 2005, and was not subject to any qualification.
     In conducting our audit of the concise financial report, we performed procedures to assess whether in all material respects the concise
     financial report is presented fairly in accordance with Australian Accounting Standard AASB 1039: Concise Financial Reports.
     We formed our audit opinion on the basis of these procedures, which included:
     G   testing that the information included in the concise financial report is consistent with the information in the full financial report, and
     G examining, on a test basis, information to provide evidence supporting the amounts, discussion and analysis, and other disclosures in the
     concise financial report which were not directly derived from the full financial report.
     Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies
     with the concise financial report.
     In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the
     Corporations Act 2001.
     W M Russell                                                           Newcastle 16 September 2005
37   Liability is limited by the Accountant's Scheme under the Professional Standards Act 1994 (NSW)     Newcastle Permanent Building Society Limited
Management                                Directory

I   Executive Managers

I                                                I
    Tony Carr – Treasurer                            Terry Millett – General Manager Customer Service

                                                 I   Jeff Thornton – Head of Compliance
I   Margaret Ellis – Head of Marketing
                                                     Glenn Walker – General Manager Operations
    Michael Kelly – Chief Financial Officer
                                                 I   Bruce White – Chief Information Officer
I   Nadine Leighton – Acting Head of
    Human Resources                                  Andrew Yost – Company Secretary

I   Senior Managers

I                                                I
    John Arentz – Treasury Manager                   Don Jordan – Administration Services Manager

I   Diana Arnott – Systems Development Manager       David Kett – Executive Manager
                                                     Branch Banking
I   Sue Badman – Manager Southern Region
                                                 I   Chris Latimer – Financial Planning Manager
I   Jon Beckwith – Learning &
    Development Manager                              Graham Moore – Manager Branch Support

    Elise Blunt – Treasury Risk Manager              Steven Murray – Financial Controller

                                                     Greg Nolan – Head of Business Banking
    Jason Bourke – Charitable Foundation &
    Sponsorship Manager                          I   Mike Phillips – Head of Product Management
I   Bob Burns – Manager Central Region           I   Dennis Pitt – Investigations Manager -
                                                     Fraud Prevention & Detection
I   John Connolly – Customer Support
    Centre Manager                               I   Chris Quinn – Loans Acquisition Manager

I   Lynette Crosdale – Manager Suburban Region   I
                                                     Stuart Trench – Senior Manager Mortgage
                                                     Operations and Broker Channel
    Noel Ellenor – Manager Banking &
    Payment Systems                              I
                                                     Geoff Walker – Manager Northern Region

I   Melanie James – Marketing
    Communications Manager

     Products and                                   Services

     During 2005, the value of Newcastle
     Permanent’s products to members was
     recognised nationally through industry awards
                                                             Newcastle Permanent
     and CANNEX 5 star ratings. The products
     that we offer include:
                                                              offers a wide range
                                                                of competitive
     I   Everyday Transaction Accounts                          products and
     Statement Savings Account –                                           services.
     a convenient and cost effective way to help
     manage day-to-day banking.

     Mortgage Offset Account – a mortgage
                                                      Money Management Account – a high
     offset facility with convenient 24 hour access
                                                      performance passbook account with very
     to your money.
                                                      competitive interest rates.

     Achiever Account – a way to help save,           Money Minder Account – fee free
     while still allowing access to savings with      banking with passbook access specifically
     a passbook.                                      designed for children’s savings.

                                                      Term Deposit – the security of a fixed rate
     I   Savings and Investments                      of interest and a range of investment terms.

     Rapid Saver Account – a passbook account
                                                      Gold Term Deposit – a premium fixed
     designed to reward efforts to save by paying     term interest rate for investments of
     a high rate of interest.                         $200,000 and over.

     Special Monthly Interest Account –               Managed funds – a range of funds with
     an award-winning passbook or statement           varying levels of risk and return.

     account with higher interest rates (based on
                                                      Superannuation and retirement funds –
     the Federal Government’s deeming rates)          a range of options including superannuation
     designed for people over 60 years working,       and allocated pensions with varying levels of
     retired or on a pension.                         risk and return.

I   Home Loans                                        I   Personal Loans

Real Deal Home Loan – a low ongoing interest          Personal and Car Loans – competitive fixed
rate, no application fee, no valuation fee and no     rates with no ongoing account keeping fees and
ongoing account keeping fees.                         no early repayment fees.

Intro-Rate Home Loan – a discounted rate              I   Other Products and Services
for the first year.                                   Insurances – house, contents, travel, car and loan
                                                      repayment insurance, many with flexible pay-by-
Fixed Rate Home Loans – competitive fixed
                                                      the-month options at no extra cost.
interest rates that offer peace of mind and
certainty for those who like to plan ahead.           Business Solutions – a comprehensive suite of
                                                      products that meet small and medium business
Real Equity Home Loan – a competitively
                                                      banking, financing and insurance needs.
priced transactional line of credit secured against
the home.                                             Financial Planning – a dedicated service that
                                                      provides financial planning advice on a range of
Real Options Home Loan – a flexible                   subjects including investments, superannuation
traditional loan with a competitive interest rate     and retirement planning, life insurance and
that can be combined with other loans.                estate planning.

     Contact and location                                       Directory
                                                                 ICustomer Service Centre
     I   Branch Locations                                        ph: 13 19 87
     ADAMSTOWN                Brunker & Glebe Rds                 I Telephone Banking
     BATEAU BAY               Stockland Bay Village               ph: 13 19 12
     BELMONT*                 587 Pacific Hwy
     BELMONT CITI             Belmont Citi Centre                 I Internet Banking: Log on at

     CARDIFF                  284 Main Rd               
     CESSNOCK                 Cnr Vincent & Cooper Sts
                                                                  I Contact number for
     CHARLESTOWN MALL         Ridley St
     CHARLESTOWN SQUARE       Charlestown Square                  all Newcastle Permanent
     CLARENCE TOWN*           (MINI BRANCH) 118 Prince St         branches: 13 19 87
     ERINA                    Erina Fair Shopping Centre
     GLENDALE                 Glendale Supercentre
     GOSFORD                  163 Mann St                            I ATM Locations

     GREENHILLS               Greenhills Shopping Centre
     HAMILTON                 122 Beaumont St                        CHARLESTOWN SQUARE
     JESMOND                  Jesmond Stockland Mall                 Shop 41, Charlestown Square Food Court
     JEWELLSTOWN*             Jewellstown Plaza
                                                                     DARBY STREET
     KING STREET              Cnr King & Union Sts
                                                                     134 Darby Street, Cooks Hill
     KOTARA                   Westfield Shopping Centre
                                                                     (cnr Council & Darby Streets)
     KURRI KURRI              187 Lang St
     LAKE HAVEN               Lake Haven Shopping Centre             ERINA
     LAMBTON                  103 Elder St                           New Retail Mall, Erina Fair
     MAITLAND                 Maitland Heritage Mall
     MAYFIELD                 165 Maitland Rd
                                                                     Kincumber Village Shopping Centre,
     MORISSET                 95 Dora St
                                                                     Avoca Drive, Kincumber
     MOUNT HUTTON             Lake Macquarie Fair
     MUSWELLBROOK             Campbell's Corner                      PHOENIX SPORTS CLUB
     NELSON BAY               95 Magnus St                           Industrial Drive, Mayfield
     NEW LAMBTON              Cnr Victoria & Regent Sts
     NEWCASTLE MALL           Cnr Wolfe St                           POKOLBIN
     PARRAMATTA               Shop 8, 197-205 Church St Mall         Tourist Information Centre,
     RAYMOND TERRACE          36 William St                          111 Main Road Pokolbin
     SALAMANDER BAY           Shop 5b, Salamander Shopping Centre
     SINGLETON                113 John St
                                                                     1 Campbell Crescent, Terrigal
     STOCKTON                 53 Mitchell St
     SWANSEA                  158 Pacific Hwy                        TOUKLEY
     THE JUNCTION             Cnr Union & Kenrick Sts                Shop 2, 30 Canton Beach Road, Toukley
     TORONTO                  45 The Boulevard
                                                                     WARATAH VILLAGE
     TUGGERAH                 Westfield Shopping Centre
                                                                     Shop 8, Waratah Village, Turton Road, Waratah
     WALLSEND PLAZA           Cowper St
     WARNERS BAY              466 The Esplanade                      WARABROOK
     WESTEND                  Marketown Shopping Centre              Warabrook Shopping Centre
     WYOMING                  Shop 21, Wyoming Shopping Village
41                                                                   WESTS LEAGUES CLUB
     *Branches without ATMs                                          88 Hobart Road, New Lambton
 Newcastle Permanent Building Society Limited.
              ABN 96 087 651 992
                  Head Office
        307 King Street, Newcastle West
PO Box 5001, Hunter Region Mail Centre, NSW 2310
                Phone: 13 19 87
               Fax: 02 4929 4637

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