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Connexus : Issue 38
Connexus www.abacus.org.au 77 www.abacus.org.au CEO COMMENT CEO comment This bumper edition of Connexus is timed for the annual Convention (this year presented jointly by Abacus and AM Institute). With its theme of ‘Optimism & Opportunity’, the Convention marks a good time to take stock of our industry’s achievements and the road ahead for mutual banking. On the performance front there’s no question that mutual banking continues to thrive. Our members outstripped the big banks in terms of growth rates in mortgages, deposits and assets, according to APRA’s latest statistics – a fantastic achievement. But it is a tough market. Abacus members continue to face pressure on margins. Consumer expectations change rapidly. Regulatory requirements grow. Can mutuals respond quickly to the need to innovate? Will we secure a fair outcome under Basel III? Can we find “mutual friendly” capital to support growth? Will we continue to invest in promotion? Our industry’s track record tells me the answer will be “yes” on all counts – though not without some bumps and bruises along the way. The ability to adapt and change is a hallmark of mutuals, and the mutual commitment to member value will continue to drive industry performance. One recent example of change is the rise of mutual banks. At the time of writing, two mutuals have re-branded as mutual banks and others are actively considering this change. Some commentators have wondered if this is a watershed moment that could promote or hamper a united mutual industry. At Abacus, we see mutual banks as an exciting and positive development. It’s a natural progression of our diverse and strong mutual sector, relevant to the Australian market, and another opportunity to tell the story of a competitive, modern and united mutual industry. We’re also seeing other new structures – mergers between a friendly society and a credit union (Australian Unity and Big Sky), mergers between credit unions and building societies, new networks and alliances across the mutual sector – all supported by the mutual ethos and focus on members. We want to take every chance we have to better inform and motivate the millions of Australians who are currently settling for less by not banking with a mutual. Abacus is a strong advocate of an industry of diverse brands serving diverse communities – united by the common strength and commitment of being mutuals –owned by customers, delivering mutually beneficial results. From our largest to our smallest mutuals, whether credit unions, building societies or mutual banks, the unifying theme is mutuality – a structure and set of values proven to deliver better long-term value, better quality services, better investment in communities and better outcomes for members. Mutual banks add to our industry’s already rich branding mosaic. At an industry level, Abacus will continue to focus on communicating this strength, on working with members to increase consumer awareness, and on delivering a better regulatory system for mutuals. It’s a challenge we relish, and one I’m looking forward to discussing when we meet in Cairns. This issue of Connexus covers a lot of ground – from staging a successful media event (page 58) to driving non- interest income from insurance (page 44) as well as market issues. Don’t miss our cover story, where we asked CEOs what were the major issues for them in the next 12 months, with some interesting and surprising results (page 26). Louise Petschler, CEO, Abacus A mutual by any other name... The emergence of mutual banks is a new development for our industry. The ability to adapt and change is a hallmark of mutuals, and the mutual commitment to member value will continue to drive industry performance.