A report released today by KPMG Australia has reinforced the fact that the customer owned banking model is thriving and is expected to continue growing next year despite regulatory constraints, revealing the strength of the co-operative and mutual sector.
The KPMG Australia’s annual Mutual Industry Review found strong asset growth of 7.8%, compared to 5% for the overall banking industry.
KPMG said this strong performance by the customer owned banking sector was built on effective business strategies including growth in lending portfolios, credit risk management practices and leveraging digital reach and third-party distribution channels.
BCCM CEO Melina Morrison said the report is consistent with overall performance of co-operative and mutual enterprises (CMEs) in 2016, with the recently released National Mutual Economy Report showing growth of 4% per annum and 18% since 2011 across the sector.
“We welcome KPMG’s support for implementation of regulatory and legislative reform to promote competition in the banking sector, such as the recommendations around access to capital in the Senate inquiry into Mutuals.”
“The sector and the economy would benefit if regulations and legislation were reformed to give better access to capital for mutuals including mutual banks, credit unions and building societies, which would increase competition especially within the banking sector and give consumers more choice and value.”
“Consumers need to understand there are alternatives to the traditional banking sector which put people and community before profit”, added Ms Morrison.
Ms Morrison said regulatory and legislative reforms, such as those proposed last week by the Australian Labor Party, were needed to promote competition in the banking sector, as well as help to better define mutual enterprises and director’s duties in the Corporations Act.