Australia’s largest credit union is preparing to rebrand its operations to trade as a ‘bank’ later this year.
Brisbane-based Credit Union Australia is in the advanced stages of reworking its consumer identity after registering new business names and domain addresses for the words “Great Southern Bank”.
Chief executive Paul Lewis last night confirmed the move, saying the new moniker marked the “next step” in the company’s evolution as the country’s largest customer-owned banking provider.
“For 75 years we’ve remained steadfastly focused on helping all Australians own their own home,” Lewis said.
“To continue that journey our research shows we need to change our name from a ‘credit union’ to a ‘bank’.
“This is vital so that more members and younger generations understand we offer the same products, services and security that a bank does – with the benefit of reinvesting 100 per cent of our profit back into our customers.
“Reflecting our strong and proud Australian history we will begin trading as Great Southern Bank later this year.”
While the rebranding comes as CUA and some other customer-owned lenders are battling to retain market share in the home loan market, a CUA source told Banking Day that work on the corporate makeover began in 2019.
APRA data indicates that the size of CUA’s mortgage book declined by around A$175 million or 0.5 per cent to $12.8 billion in the six months to the end of December 2020.
Lending also contracted during the same period at Illawarra Credit Union (-4.5 per cent), and Police Credit Union (-0.5 per cent).
Most credit unions managed to expand their mortgage businesses including People’s Choice CU (up 0.7 per cent) and Railways CU (up 7.3 per cent).
CUA also appears to have lost market share in retail deposits in the December half. While its household deposits base grew by $376 million or 3.8 per cent, the expansion did not match the system growth rate of 7.7 per cent for the six months.
It is not entirely clear that the economic crisis induced by the COVID-19 pandemic has triggered a consumer reaction akin to the 2008 global financial crisis when retail deposits flooded out of credit unions and into the vaults of the four major banks.
A slew of credit unions posted double digit growth in retail deposits in the December half led by Orange CU (up 13 per cent), Goulburn Murray CU (up 12 per cent) and Railways CU (up 11.3 per cent).
Although CBA (up 8.3 per cent), ANZ (up 9.3 per cent) and NAB( up 8.3 per cent) each recorded deposit growth slightly better than system, Westpac lost market share after growing its base by only 5.4 per cent.
A string of former credit unions now trading as mutual banks recorded deposit growth rates well ahead of the majors. They included Heritage Bank (up 14 per cent) and Bank Australia (up 10.7 per cent).
However, the biggest market share gains were posted by recently licensed banks – Judo (up 50 per cent), 86 400 (up 17 per cent) and Volt Bank (up 66 per cent).
Macquarie, which has been pursuing an aggressive customer acquisition strategy in the last two years, grew the strongest of the mid-tier banks after increasing retail deposits by 27 per cent to more than $21 billion.