CHANGING TACK: Anthony Hughes, CEO, Teachers Mutual Bank
Teachers Mutual Bank will scrap its Hiver brand, no later than the middle of next year.
In its 2024 annual report released last week, Teachers Mutual said that “as part of our ongoing simplification program, this year we undertook a full review of our retail brand, Hiver.
“The outcome is that the Hiver brand will be progressively phased out from the market during FY2025.”
Launched in June 2021, Hiver lifted the number of brands managed by Teachers Mutual to five.
This decision has been maturing for some time. At the Hiver website, there is a list of products no longer for sale, including personal loans and Target Saver, once a flagship product, with only two run of the mill deposit products still on offer. Only a narrow cohort were Hiver’s target; essential workers in education, emergency services, health and also any graduate of an Australian university.
In 2021, the thinking at Teachers was that Hiver would help drum up new members with a younger age profile than was typical for its other brands.
In the coming months the bank will transition Hiver customers to one of its other brands.
Withdrawing Hiver, which never made much of a mark in a segment dominated by Bendigo’s Up and NAB’s UBank, seems a step in the right direction for a bank with historic, and continuing, cost management challenges.
Hiver “enabled us to experiment with new digital features which we will progressively introduce into our other brands” TMB told members in the annual report.
“An important step towards simplifying our bank, phasing out Hiver will facilitate process simplification, reduce complexities, and significantly reduce risk.”
Teachers’ four continuing brands – the main brand, Health Professionals Bank, Firefighters Mutual Bank and UniBank – will still seem a bloated portfolio to many.
Operating expenses increased by five per cent, to $164 million, over the year to June 2024 for the bank, while payroll costs increased six per cent. Costs pressures at TMB, this year, were modest relative to peers.
Net profit for Teachers Mutual fell to $24.5 million in FY2024, from $27.9 million in 2023.
The lower profit was “primarily due to increased spend on risk transformation, digital transformation, remediation programs, uplift in employee remuneration and benefits, and regulatory and compliance projects” the annual report says.
With a new chief executive in Anthony Hughes, who joined from Westpac in October 2023, TMB is the early stages of a refresh in its strategy and renewed discipline on risk management.
Hughes replaced industry veteran Steve James as CEO. James served as the bank’s CEO for more than 18 years.
In unusually candid commentary to introduce the annual report, chair Maree O’Halloran and Hughes called out the fact that last year, “an external review identified a need to uplift our risk capability and mature our risk management frameworks, governance, and practices.
“As a result, we are prioritising risk management across our bank and implemented our new, multi-year organisational Risk Transformation program, called MORE (Member Outcomes Risk Excellence).
“MORE will improve our risk governance, risk practices, and risk culture, with the ultimate goal of building a simpler and stronger bank for our customers.”
Well, there you go, “simplification”, which seems to be the essence of every bank’s strategy these days.
One decision with which the Teachers board is engaged (but perhaps dithering) is whether or not to close a number of branches. Or maybe even almost all of them.
With eight branches, including HQ in Homebush, the bank’s office footprint is comparable to some peer mutual banks, though closing its satellite offices in Brisbane, Melbourne and Perth for an organisation with a decidedly NSW-centric member base seems an obvious cost saving (even if occupancy costs did fall marginally last year).
“We have commenced a review of our property locations to understand the benefits of a footprint reshape” was the elusive language used by O’Halloran and Hughes to forewarn the bank’s member of the branch closure program ahead.
Teachers Mutual Bank has 242,000 members, $11.6 billion in assets and retail deposits of $9.1 billion, more or less fully funding its home loan book of $9.3 billion.