Building society heritage a burden

Heritage Building Society will follow the fashion and adopt bank branding from late this year, assuming members of Australia's largest mutual deposit-taking entity agree.

The board of Australia's largest building society proposes that the business adopt the name Heritage Bank Limited. Members of Heritage will consider the change in name at the annual meeting in Toowoomba next month.

Mecu Limited, a Melbourne credit union, has already adopted bank branding. Queensland Teachers Credit Union will do so next month.

One consequence of the use of the name "bank" by large mutuals is that they qualify for inclusion on the list of "banks" maintained by the Australian Prudential Regulation Authority, and their assets and liabilities may be reported in the monthly banking statistics. Conversely, they may be excluded by from the quarterly APRA reports on credit unions and building societies.

With more than A$8 billion in assets, the shift of Heritage from the building society column to the bank column in the APRA definitions will slash the level of building society assets (of $26 billion at present) by almost one third.