Bank’s credit growth outstripping rest of market

CEO breaks down confluence of factors responsible for generating such momentum, including broker contribution

Bank’s credit growth outstripping rest of market


By Madison Utley

Australia’s leading mutual bank recorded 26% credit growth in the six months to 31 December (annualised), surpassing the overall market which averaged just 3%, the big four banks at 0.6% and other mutuals at 8%.

Australian Unity Bank's loan book is on track to pass the $1bn mark this year.

According to CEO Tim Barber, the recent growth is attributable to a confluence of factors, starting with a shift in general consumer sentiment.

“You can really see the banks that are doing the right things by consumers, whether it’s good value products, great service, understanding customers’ actual needs, or putting forward solutions they really want,” he said.

“That segues into where we at Australian Unity are having a lot of success.

“Since we did the rebrand 18 months ago and launched our new customer value proposition around banking that’s good for you, as well as simplified our product offering, we’ve really honed our focus on putting customers at the centre of what we’re doing.”

According to Barber, the good experiences had at the bank are creating organic momentum that is helping to grow loan volumes.

“Whether it’s word of mouth through direct customers sharing with their family and friends, or whether it’s in the broker channel, with brokers that are having a great experience with us beginning to refer more customers our way or tell their broker colleagues about us, that service difference is really what’s driving our growth,” he said.

Just two years ago, Australian Unity Bank had a fairly local focus, with the majority of its customers coming from specific locations.

“We’ve been building out our distribution profiles, and have a network that’s now very much national,” said Barber.

“We have salespeople in each state. We’ve got broader broker relationships. We’ve brought on two aggregator groups, Astute and Smartline. By adding them and their network of brokers to our platform, we have more reach.”

Over the first six months of this financial year, around three-quarters of the home loans at Australian Unity Bank have been broker originated.

To Barber, the victory in this figure is twofold. Not only has the bank been able to grow broker channel volumes, but it has capitalised on the unique perks that come from being part of a larger group.

“To have a proportion of direct business that high, around a quarter, with zero branches - that’s quite a good result,” he said.

“Being part of the broader mutual group of Australian Unity, we’ve got a customer audience that is outside the bank that already knows and deals with our Australian Unity brand. Our bank’s got roughly 25,000 customers, but the group itself has around 700,000 customers.

“There’s a direct audience there that’s quite interested to hear from Australian Unity about banking products and services. That’s where our new-to-bank, direct customers tend to come from.”

The access to the other businesses under the Australian Unity brand has also been used to infuse further value into the bank’s broker relationships.

“At the PD day of one of our broker partners at Astute last year, rather than doing your typical bank presentation about ‘here’s how you lodge a loan with us’, we did wellness sessions with an Australian Unity company that focuses on preventative healthcare," said Barber. 

“We talked about wellness and operating a small business during stressful times, which was fitting as brokers obviously had it tough over the course of the royal commision.

“One of the key ways we differentiate ourselves in service both for customers and our broker partners, is bringing what Australian Unity’s all about more generally to them in a way that helps their business, which brings a whole extra layer to doing a good job being a lender on the panel,” he concluded.

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