Australia’s big four banks have motored through Australia’s cost-of-living crisis, supported by profits measured in the billions. ANZ, Westpac and NAB have each notched up half-yearly profits of $3 billion-plus. CommBank has declared a six-month profit of $5.15 billion.
That may be great news for bank shareholders, but it’s not always so rewarding for their customers. Many of them may be galled to see their bank reporting 10-digit profits while personally feeling the squeeze of higher home loan rates and returns on savings that have failed to keep pace.
For consumers fed up with helping their bank earn bumper profits at a time when many of them are tightening their belts, there is an alternative.
“Australian banks are divided into two models,” says Peter Lock, chief executive officer of Heritage and People’s Choice.
“There are those that exist wholly and solely to maximise profit – they’re the ones listed on the stock exchange. These listed banks simply can’t put their customers first because that place has already been taken by shareholders.”
On the other hand, a number of banks are 100% owned by their customers. And according to Lock, these banks “make their customers their absolute focus”.
Committed to mutual model
Customer-owned financial institutions, also known as mutuals, are not new. Many have been part of the Australian financial scene for decades. Some have a history spanning more than a century. Along with having a proven track record, mutuals are regulated in exactly the same way as the big banks, having to meet the same strict, legally enforceable standards of safety and security.
This story is from the September 2023 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the September 2023 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.