Credit union & building society performance compares favourably to banks

22 September 2009

Latest bank quarterly performance statistics from APRA underline the crucial role of mutual banking institutions - credit unions and building societies - in providing competition and choice.

The figures show banks had total loan growth of 9.5 per cent over the year to March as other lenders exited the market due to fallout from the global financial crisis.

Credit unions also increased their lending during the period, lifting total loans by 7 per cent and housing loans by 10.2 per cent.

The credit union and building society sector’s market share in new owner occupied lending commitments was up from 6.8% in July 2008 to 7.9% in July 2009.

“This shows that the banks do not have the lending market to themselves,” said Louise Petschler, CEO of Abacus - Australian Mutuals.

“It’s tough competing in a market dominated by the big banks but the mutual sector continues to perform strongly.

“Take our sector’s stellar performance in prudent lending – the banks recorded a 228 per cent increase in charge for bad debts in the year to March while the mutual banking sector recorded a 5 per cent decrease in charge for bad debts.

“We encourage the Government to further support competition and choice in retail banking by measures like amending the anti-competitive fee structure in its Guarantee Scheme for Large Deposits and Wholesale Funding.”

For more information:

Pamela Eldridge
Media Adviser
02 8299 9024, 0423 843 790
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Louise Petschler
Chief Executive Officer
02 8299 9036, 0408 239 226
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