Bendigo hugs credit unions close

Bendigo and Adelaide Bank is winning large chunks of business from mutual ADIs, with 17 credit unions shifting wholesale funding needs away from Cuscal (a long standing provider) to the bank.

Mike Hirst, CEO of Bendigo and Adelaide Bank, told the half-year results briefing yesterday that the bank was in talks with the same number again to provide funding.

"We've also established a banking model that will enable participating mutuals to position themselves for growth in this challenging environment while remaining true to their traditional ideals and values," Hirst said.

"We have a proven track record of working with organisations and communities on solutions to challenges they face. This is just one more example of that."

In November, Bendigo outlined plans for an "alliance" under which four small credit unions will, in effect, become franchises of the bank.

The four are AWA Credit Union, Berrima District Credit Union, Circle Credit Cooperative Ltd and Service One Credit Union.  The four credit unions agreed to transfer around A$550 million in loans and around $620 million in deposits to Bendigo and Adelaide.

Bendigo has become the credit unions' approved deposit-taking institution, assuming responsibility for compliance, systems and balance sheet information.

The credit unions maintain pricing and loan approval powers, and continue servicing customers through their existing branches.