$12m in the community bank
THE South Grafton Community Bank has attracted $12 million in deposits and loans in its first year and predicts another $8 million worth of business will flow into the branch within six months.
One of 55 community banks in Australia run jointly by a local board of directors and the Bendigo Bank, South Grafton’s bank filled a void created when the ANZ Bank closed its Ulmarra and South Grafton branches, leaving both centres without a bank.
The chairperson of the South Grafton bank board Julie-Ann Rose yesterday said the bank had written loans and taken deposits of $12 million in its first year of trading. Ms Rose said the branch needed $18 million to $20 million of business to achieve profitability and was on track to reach this target by May.
Community banking has caught on in regional Australia as commercial banks suffer the public relations fallout from closing rural branches and retrenching country staff.
Under the community bank structure, 50 per cent of a branch’s profits are reinvested in its local area, with the balance of profits going to Victoria’s Bendigo Bank, which manages the branches.
The principal of Grafton accounting firm A C Small Maxwell, Derek Alden, said community banks offered the same services as other banks, from leasing and insurance products to term deposits and Internet banking.
He said they were ‘just another bank’, subject to the same reporting and fiduciary obligations and Reserve Bank of Australia laws as commercial banks.
A YEAR OF MILESTONES
• South Grafton Community Bank signed up its 1000th customer in August. It now has 1350 account holders.
- The bank has 230 shareholders, most of them Clarence Valley residents.
- The bank is 50 per cent owned by local shareholders and 50 per cent owned by Bendigo Bank.
- Bendigo Bank founded as a building society in 1858, has assets of over $7 billion and employs 1600 staff. It operates 192 wholly-owned bank branches and 55 community bank branches.
- Bendigo Bank opened its first Sydney branch this week and is rapidly expanding in NSW.