Introduction
Highlights
Message from the Chairman
On behalf of the Board I am pleased to present the 2015 Corporate Report, our first as Bank Australia.
This report covers our commitment to mutual prosperity – that is, how we have created value over the past year for our customers, the communities they live in and the planet we all live on.
We became Bank Australia on 17 August 2015. Our new brand is based on long term research and discussions with customers. We kept everything that is right with our bank: responsible banking; being 100% customer and Australian owned; and, creating and protecting value for our customer owners. We added a stronger brand and a recognisable and easy-to-understand name that includes all Australians. This decision will help us consolidate our reputation for customer owned responsible banking.
We made other changes this year. We simplified our products and fees, we improved the on‑boarding experience for customers, and we trained and better involved our staff in designing our customer experience. We also created a roadmap for investment in and development of the bank to secure a strong future for it and our customers. Bank Australia’s continuing success story is one we are determined to maintain.
Prosperity
This year the Board set an ambitious target for our staff – grow our deposit book by 8% and loan book by 8%. I am pleased to report staff accepted and exceeded this challenge, with loans growing by 9.8% and deposits by 10.3%. The bank’s assets grew by 10.8% to $3.577 billion in 2015. This result helped us deliver an after-tax profit of $24 million which in turn helped build our customer owned reserves to $412.0 million.
We reinvest our profits into the bank to provide competitive interest rates and fees, and quality products and services. In 2015 customers were collectively $23.49 million better off than they would have been banking with one of Australia’s four major banks.1
We changed our fee structure in May. We simplified how we charge fees, so now over 60% of our customers do not pay any monthly fees. There was a mixed response to the change and sadly some of our customers closed their accounts. We received 1,101 negative comments about the fee change, but we also had 793 positive comments received by staff through our branches. And the majority of customers who closed their accounts did not use the bank as their main financial institution. This change in our approach to fees aligns with one of the founding principles of cooperative banking – customers should benefit in proportion to the business they conduct with their cooperative.
People and planet
We reviewed our Community Investment Program – it’s now called the Bank Australia Impact Fund. As the Fund develops, we will ensure we invest in areas that generate clear and measurable social and environmental outcomes. This year we invested $744,183 (3.1%) of our after-tax profits to support the work of our community sector customers across the following areas: education, disability, financial inclusion, Aboriginal and Torres Strait Islander community development, conservation, sustainability and affordable housing.
We also renamed the conservation landbank – it’s now called the Bank Australia Conservation Reserve. This simple change clarifies how we use the land and our work continues to revegetate it to help protect endangered species. Our operations also remained carbon neutral in 2015. Notably, we purchased fewer carbon offsets this year because we reduced our greenhouse gas emissions.
The year ahead
The year ahead is exciting. We will continue to offer great value to our existing customers and we hope for stronger brand recognition and increasing market share among socially aware consumers. We recognise the continuing low interest rate environment will again place pressure on interest margins. Regulatory pressure on investor lending will also reduce the proportion of our investor loan portfolio within our total loan portfolio.
This year we refined our Strategic Plan to give the bank greater clarity of purpose and set a vision for 2020. We set ourselves a more ambitious growth target and we will keep focusing on attracting a group of diverse, socially aware customers while responding to the needs of existing customers.
Growth is important because it gives us scale, which brings efficiencies as well as opportunities for customers and staff. It also means we can have a greater positive social and environmental impact across our communities.
We will keep investing in the bank, our technology platforms and our ability to create a simple and personal customer experience that is seamless across our digital and physical touch points. We will continue improving our risk management framework (to fulfil our responsibilities as the stewards of customers’ funds) and develop our capacity to grow our distribution through third party relationships.
The Board also set Management the challenge of measuring workplace culture and measuring mutual prosperity to track our performance against these two key areas.
As part of the rebrand to Bank Australia we introduced a small number of our customers via video, photographs and news articles. It was a lovely way for customers to meet and get to know each other, the contributions they make to society and what they expect from their bank. We look forward to introducing you to more customers over the next year.
I would like to thank all customers, Directors, management and staff for their contribution to and support of Bank Australia over the past 12 months.
Judith Downes
Chairman
