New banking alliance shakes up market

by Julia Corderoy03 Mar 2015
A new banking alliance between one of Australia’s largest regional lenders and four Australian credit unions vows to create greater competition in the banking and finance market.

The alliance was developed by Bendigo and Adelaide Bank together with AWA, BDCU, Circle and Service One credit unions. This week, the balance sheet transfer of the alliance partners’ more than $540 million in loans, and $620 million in deposits took place. 

The alliance partners also relinquished their ADIs, and as of 1 March 2015 operate as agents of the Bendigo and Adelaide Bank under its banking licence.

Service One CEO Peter Carlin says the alliance model is an exciting advancement that will enable them to foster greater competition in the market, whilst remaining independent. 

“This new model received overwhelming support from our members as it will enhance our ability to offer greater competitive choice and provide our members with access to a wider range of products and services,” he said.

“Many businesses are trying to meet the demands of increasing regulation and new technologies. By aligning with the Bank [Bendigo and Adelaide Bank] we can free ourselves from prudential capital and funding challenges, minimise our regulatory requirements and costs, and successfully overcome these disruptors.”

Benidgo and Adelaide Bank’s managing director, Mike Hirst says the new alliance has given the bank an opportunity to grow its business in a manner that is totally aligned to its strategy.

“We pursued this initiative as it underpins our positioning as a partner of choice, and plays to our strengths,” he said. “It also enables us to leverage our considerable expertise and investment in the Community Bank® model, third party lending and community engagement.”

The regional lender says members will have access to new products and technology from Bendigo, with the alliance partners retaining pricing and loan approval discretions. Participating partners will no longer refer to themselves as credit unions, instead adopting new branding.

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