Holding on to a traditional branch-based, and higher cost operating model, Regional Australia Bank continues to set standards for the mutual banking sector, for persistence if not such robust profitability over the last year.
Armidale-based Regional Australia Bank operates branches and sales offices in 38 locations in NSW, from Wagga Wagga in the south to Mungindi, Queensland in the north, with its most western branch in Cobar.
“Our commitment to expanding face to face banking services was demonstrated with the opening of our Wagga Wagga branch and new sales office in Warners Bay” chair Graham Olrich and CEO David Heine wrote in the bank’s 2024 annual report.
“While many of our banking peers believe that they can close branches and
retain the custom of our regional communities, we believe that commitment as an employer and banker within these communities is important to helping our regional communities thrive and grow.”
This is not all that distinctive a position in the world of customer-owned banking in Australia, but even at RAB’s scale (with $3.5 billion in assets) supporting a large and widespread branch network comes with costs.
RAB merged with Macquarie Credit Union in April, with the central western NSW credit union adding around $100 million in assets to the bank’s balance sheet
Operating expenses vaulted 22 per cent last year to $73.6 million (a comparison that does not allow for the merger with Macquarie). Staff costs increased 24 per cent.
Regional Australia Bank earned a net profit of $26.5 million over the year to June 2024, down from $31.1 million in FY2023.
There was a 15 per cent growth in the book over the year, which would have been 12.5 per cent without the merger.
RAB’s net profit was reduced by the decision to remove account access fees, saving members $1.25 million.
Regional Australia Bank has 100,600 members.