Heritage Bank has announced an extra $1bn of retail deposits in half-year financial results released today, a growth of 210% on the first half of 2020.
Australia’s oldest customer-owned bank was also able to boast a profit of $23.20 million, a solid recovery after the COVID-19 pandemic struck in at the start of last year.
As a result of the growth in retail deposits, Heritage was able to top $11bn in total consolidated assets, their highest ever amount in over 140 years of operation.
It represents a trend in the customer owned banking space that has seen that section of the industry grow after the pandemic.
Last year, pollster Roy Morgan reported that customer-owned banks were the most trusted in Australia, with customer satisfaction pushing 90% approval.
“The customer owned model excels at putting people before profit, which is even more important when customers and communities are faced with uncertainty,” said Michael Lawrence, chief executive officer of the Customer Owned Banking Association. “Customer owned banks make a profit but not at the expense of good outcomes and trustworthy service for our customers. It’s an enduring model – some of these institutions have been operating in Australia for over 150 years. The sector remains as resilient as ever.”
Customer owned banks are often outside of metropolitan cities, and Lawrence linked that to their strong recover. “Of our 63 member institutions, 42 have headquarters outside Sydney and Melbourne, with head offices spanning the regions and crossing state borders,” he said. “Heritage Bank is a good example with headquarters based in Toowoomba. As major investors and employers in regional communities, they are helping drive economic recovery outside the cities.
It isn’t just Heritage who are seeing success after the dip in early 2020. “Our sector’s strong performance is underlined by APRA’s Monthly ADI statistics for December, with total deposits growing by 1.29 per cent, whereas the banking system comprising all ADIs averaged minus 0.22 per cent. Total assets for the sector have also grown to $144 billion.”
“Home loan growth for the customer owned banking sector has more than doubled the average increase for the banking system, according to APRA’s quarterly ADI data for September. Our members are helping Australians take advantage of a low interest rate environment. We are now seeing strong demand for property in regional areas, and no doubt COVID-19 has been a factor.”