Despite the Reserve Bank of Australia continually slashing interest rates to record lows in recent years, South West Credit saw deposits increase as well as lending last financial year.

The bank had a 14.3 per cent increase in retail deposits to $144 million, above the industry growth rate of 6.6 per cent. The value of term deposits held also increased and it attracted more than 1000 new accounts.

The bank approved new loan applications worth $37 million, bringing its total loans portfolio to $115 million, an increase of $10 million from last year.

Chief executive officer David Brown said the bank's small size was an advantage amid changes from the Banking Royal Commission and global economic challenges.

"Our decisions are quicker, and we are not caught up in royal commission issues, or political issues, and we are able to focus on serving our members and customers," Mr Brown said.

Chair Jenny Waterhouse said the results were a sign of confidence in the Warrnambool bank, which has about 13,000 customers.

"I think our local aspect sets us apart. The decisions are made here," Ms Waterhouse said.

She said changes to customer banking habits were the main changes to the co-op, as it advanced its online and mobile banking. The bank incorporated retina and facial recognition, and card security management to the banking app in the last financial year.

"Face-to-face banking, whilst still important, is not the priority for the majority of members for routine matters," Ms Waterhouse said.

Mr Brown said despite reports of the Australian economy softening last month, he believed the Warrnambool economy was strong.

"It's very stable, we don't have the peaks and troughs other areas of Australia encounter," he said. "The local economy is self sufficient geographically and not dependent on capital cities or large manufacturing industries."

The bank reported a profit of $209,188, a slight increase on last financial year. "It is a relatively small profit compared to what the major banks aspire to achieve. The reason we do that is we reinvest our surplus funds back into the business," Mr Brown said.

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