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Performance and Capability:
CEO Q&A

9 May 2019 |Industry Updates
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Performance and Capability:
CEO Q&A

9 May 2019 |Industry Updates
To provide insight into the operating reality of the Alliance Bank® solution four years in we asked the CEO’s about business growth, technology capability, their strategic focus, and the future. This is what they had to say.

Q: What growth in savings, deposits and loans have you realised since becoming an Alliance Bank Partner? (Transfer of Business – 3/15)

AWA Alliance Bank

GS: When we entered into the Alliance Bank solution our host company, Alcoa of Australia Ltd, was closing its plants in Sydney and Geelong, retrenching well over 1,000 of its employees / members of AWA.

As a result we had to relocate our head office from Alcoa’s Geelong Plant, where it had been located for 45 years, to a central Geelong location and to re-establish our market within the greater Geelong region. Additionally, due to the closure of Alcoa’s Sydney Plant, we were forced to make the decision to close our Sydney branch. These factors have had an impact on AWA’s growth.

Savings and Deposits Growth  - YTD: 3.3% | Since TOB: 3.6%
Loans Growth - YTD: 5.3% | Since TOB: 21%
Revenue Earning Portfolio (loans and deposits) Growth - YTD: 4.8% | Since TOB: 16%

BDCU Alliance Bank

JE: Since partnering with BEN we’ve has been able to maximise the benefits of our local business strategy that has now firmly positioned BDCU as a preferred banking provider to the local business community. These new relationships are also providing us with a targeted doorway to the personal banking business of the local business owners, their employees, customers and their circles of influence. As a result BDCU has grown strongly over the past four years.

Savings and Deposits Growth - YTD: Stable | Since TOB: 85%
Loans Growth - YTD: 8.2% | Since TOB: 54%
Revenue Earning Portfolio (loans and deposits) - Growth TOB: 43%

CIRCLE Alliance Bank

AS: For CIRCLE the partnership with BEN has delivered for members with the introduction of more banking products, enhanced technology and reduced fees and charges. The Alliance Bank solution has also enabled us to transition from an industrial base to a wider community based membership.

Savings and Deposits Growth - YTD: 0.85% |Since TOB: 31.09%
Loans Growth - YTD: 0.66% | Since TOB: 10.03%
Revenue Earning Portfolio (loans and deposits) Growth - YTD: 0.75% | Since TOB: 18.79%

NOVA Alliance Bank (Joined 4/8)

The newest entrant to the model, NOVA Alliance Bank, began in 1964 as Hunter District Water Board Employees Credit Union and then in the late 90’s transitioned to a community credit union. During this time NOVA lacked the scale needed to be cost effective.

DF: Now the centralised support team manages backend duties including compliance, we’re able to focus on members and growing the business. Members are telling us they’re pleased NOVA chose not to disappear into a merger and, importantly, they are delighted with the new range of services, technology and products now available to them.

Savings and Deposits Growth - Stable
Loans Growth 1.7.18 to 28.2.19: 14%
Revenue Earning Portfolio (loans and deposits) Growth - TOB: 12%

SERVICE ONE Alliance Bank

MS: As SERVICE ONE no longer has the ADI requirements of maintaining both liquidity and capital levels we’ve been able to grow our loan book without needing to chase deposits or restrict loans growth because of capital constraints. This means we now operate on a more level playing field.

Savings and Deposits Growth - YTD: 4.2% | Since TOB: 23%
Loans Growth - YTD: 2.5% | Since TOB: 20%
Revenue Earning Portfolio (loans and deposits) Growth - YTD: 3.4% | Since TOB: 21.4%

 

Q: What new technology, products or capabilities have you bought to market since joining the alliance?

All Alliance Bank Partners

  • The Pays - Apple, Google and Android
  • NPP
  • Ultracs Mobile Banking App
  • Paywave on Visa Credit and Debit Cards
  • Xero and Banklink (ex. NOVA)
  • Upgraded Internet Banking Platform
  • Merchant Facilities
  • Business MyViewpoint
  • Local Business Solutions
  • Uncapped personal lending capability
  • Uncapped business lending limits

In addition:

AWA Alliance Bank

  • Social Impact Loans

BDCU Alliance Bank

  • Virtual Bank pilot program
  • NPP capability with OSKO Business
  • VISA Business and commercial insurances
  • 5-year fixed commercial loans
  • Community Saver Online Account
  • Social Impact Loans
  • Online statements
  • Hi-speed wi-fi and interactive smart boards in all rooms for hire - available to members, business and community

CIRCLE Alliance Bank

  • Business and commercial insurances
  • Business Loans
  • Business VISA
  • Vehicle and Equipment
  • Leasing Fixed Term loans
  • Extended range of term deposits
  • Funeral Bond

NOVA Alliance Bank

  • Virtual Bank pilot program
  • Business and commercial insurances

SERVICE ONE Alliance Bank

  • Greater suite of term investment options
  • Greater suite of term investment option
  • Enhanced range of small business banking solutions inc. VISA and insurances
  • Credit card with interest free period

 

Q: What does future growth look like?

AWA Alliance Bank

  • GS: The groundwork is done so future growth prospects across the board look strong
  • The Community Partnerships program pipeline of referred business is also providing solid growth

BDCU Alliance Bank

  • JE: Expansion of virtual banking
  • Fully mobile workforce
  • Expanded processing efficiencies
  • Majority of workforce now focused on growth so we look forward to continued above system growth and increase in members with value

CIRCLE Alliance Bank

  • AS: Redefined boundaries moving into the local communities - Brimbank, Melton and Wyndham
  • Aggressive growth targeted for these areas – backed by BEN
  • Overarching strategy will build the business and growth pipeline

NOVA Alliance Bank

  • DF: Capability to deliver the best technology in increasingly sophisticated market
  • Virtual banking trial to attract millennial audience
  • Expect strong growth in membership and mortgage take up

SERVICE ONE Alliance Bank

  • MS: Increased focus on growing market share in the ACT and surrounding NSW
  • Achieve depth across member’s portfolios focusing on those with greater revenue potential
  • Adopting a multi-channel approach for new member acquisition, including mobile banking and online capability
  • Leverage opportunities resulting from the Banking Royal Commission including tighter regulations for brokers and other loan originators

 

Q: What type of members are you attracting now that you would never have expected as a Credit Union?

  • Council deposit and credit positions
  • $5M + land developments
  • Medium as well as small businesses
  • High net worth individuals

 

Q: Which issues facing Credit Unions makes you glad you became an Alliance Bank Partner?

  • Compliance and regulation matters are now much less intrusive and time consuming
  • Liquidity and capital management are no longer issues
  • Legislative and regulatory fall out from the Royal Commission
  • Development cost to deliver leading edge technology
  • Ongoing capital constraints and regulatory changes that are implemented across the industry regardless of entity size and complexity
  • Erosion of competitiveness
  • Freedom to run a business that enhances member welfare instead of having to focus on APRA profitability expectations

 

Q: What are the most exciting business changes you have made in the last 24 months?

AWA Alliance Bank

GS: Continued development of our Community Group Partnership Model which enables us to invest our capital to assist with the enhancement of community facilities, which in turn gives us access to niche markets which were previously difficult to penetrate. This would not have been possible under the ADI Model.

Complete overhaul of our strategic plan to align with the Social Enterprise Bank philosophy that we have adopted, reinvigorating Directors and staff.

BDCU Alliance Bank

JE: We’ve effectively delivered our ‘local business’ strategy and organised our resources to become ‘The Bank for Local Business’.

This strategy has seen the development and implementation of the “Collective” concept in two former BDCU branches. The Collectives are destinations tailored to support members, business and community needs. Each integrates a small banking service area and shared flexible workspace facilities that are open to both members and non-members. The focus is on advice, business support and community facilitation.

These new business and social amenities are delivering new services to members and the community while providing new revenue streams for the business.

CIRCLE Alliance Bank

AS: Developing our strategy to be aligned with being a Social Enterprise Bank has given us the opportunity to engage the community.

We now have the capability to offer members competitive products and services along with technology that we would never have been able to deliver alone.

This new paradigm means a shift in focus from compliance and regulation to members and business growth. It’s a refreshing change.

NOVA Alliance Bank

DF: Now we can focus on our customer needs rather than spending most of our time ticking boxes for the regulator. This is a big deal because some of our profits can now be invested in the community rather than being held to satisfy never-ending requests by APRA.

We don’t have to worry about a large exposure cap so have the capacity to assist with large loans, this is driving real growth for us.

And with the banking reputation of Bendigo Bank behind us we’re no longer a small player in a big market.

SERVICE ONE Alliance Bank

MS: A more compelling narrative on how we Do Good, with our social impact credentials being demonstrated through the various impact investments we’ve made.

 

Q: What are the most significant community contributions you’ve made thus far?

AWA Alliance Bank

GS: Now use profits for the benefit of our members and the communities in which we operate:

  • Abolition of all transaction and account keeping fees
  • Significant growth in philanthropic initiatives
  • Strategic partnerships developed with community groups to enable the enhancement of major community facilities:
    • AWA Alliance Bank Stadium – partnership with Basketball Geelong
    • New facilities for East Belmont Cricket Club
    • Refurbishment of the Alma Doepel – youth training initiative

BDCU Alliance Bank

JE: Ability to use profits to support our members and community

  • Apprentice Support Program and My Community Program where BDCU capital is invested in community in a way that everyone wins, including BDCU
  • A corporate volunteering program for BDCU staff and participation by other local businesses
  • Strong growth in the Community Grants Program designed is to create a sustainable stream of income for participating Community Organisations
  • Income earning savings for members and a sound savings foundation for BDCU

CIRCLE Alliance Bank

  • AS: Launched a Do Good suite of competitively priced value add products that provide members with rewards funded by CIRCLE to support charitable organisations
  • Launched a corporate volunteering program for staff
  • Integrated member loans with support for Good Return

NOVA Alliance Bank

  • DF: Apart from physically working with Hunter Breast Cancer association we are now also able to make a financial contribution to further assist our community in need.

SERVICE ONE Alliance Bank

  • MS: We are a key strategic partner and founding investor of ‘Assistance Beyond Crisis’ micro-finance no interest loan scheme to support victims of domestic or family violence
  • We’re a founding partner of the Mill House – a social enterprise accelerator program run in association with the University of Canberra and the Canberra Business Innovation Network
  • All four National Health Co-op clinics we helped fund are now open, providing an additional 20,000 locals with unlimited access to bulk billing medical services.
  • Successful crowd-funding campaign for four local social enterprises facilitated through the Mill House, more than doubling the seed funding of $25k that SERVICE ONE contributed to.
  • Seed funding provided for Trusty Loans by CARE program, providing no interest loans for those in need in Queanbeyan area.

Related Topics

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Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL / Australian Credit Licence 237879. AWA Mutual Limited®, BDCU Limited®, CIRCLE Mutual Limited®, NOVA Mutual Limited® and SERVICE ONE Mutual Limited® (Alliance partners) are independent mutual entities that have formed an alliance with Bendigo and Adelaide Bank. AWA Alliance Bank®, BDCU Alliance Bank®, CIRCLE Alliance Bank®, NOVA Alliance Bank® and SERVICE ONE Alliance Bank® are trademarks of Bendigo and Adelaide Bank Limited.

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