The board of Auswide Bank have been forthcoming, a tad, on the tempo of the bank’s engagement with consolidation discussions around the smaller fry in the sector.
“The Board continued to monitor opportunities to acquire loan books or suitable institutions as the opportunity presents itself and will review any offers made which may complement the overall operations of the Group,” the board wrote in Auswide’s 2021 annual report, released on Friday.
“Offers made” …. who? The obvious question.
Punditry, not intel now, but surely MyState Limited will be in the mix, and maybe even larger banks.
As for “suitable institutions”, this is a euphemism for credit unions and any smaller or bolder mutual banks up for a conversation on a demutualisation – not many; though Martin Barrett, the bank’s CEO, told Banking Day recently he’d canvassed concepts and more with any number of chairs or CEOs of mutual ADI when opportunities arose.
It's now more than five years since Auswide Bank's takeover of Queensland Professional Credit Union (trading as Your Credit Union), a deal hoped at the time to be a template for consolidation of credit union customer lists by the bank.
BNK Banking Corp in Perth is seeking a buyer for its ADI operation and ABA have to be somewhere in these discussions and BNK’s alternative bidders will be few for an ADI licence fast declining in value.
For now, Auswide is motoring along via disciplined organic growth, much of it in the south-eastern Queensland market, much of this in turn via the Private Bank arm. This is an approach all too typical of smaller fry banks who by degrees are outshining the established banking pack.
Mutual banks and fintechs like Auswide are coordinating for the biggest and most prospective onslaught yet at the lazy balance sheets and worn out manners of the industry oligopoly. If they succeed we will all have to get used to feeling nostalgic about the cartel.
“Auswide Bank saw quality growth in its balance sheet and profitability at record levels in the FY21,” the board can tell shareholders.
NPAT of A$24.2 million was up 31 per cent on 2020.
Loan approvals increased 38.1 per cent “and for the first time in our history exceeded $1 billion.”
On funding, the bank’s loan book growth was supported by “an increase in lower cost at call savings accounts [which] contributed to an 11.9% rise in customer deposits to $2.9 billion at June 2021.”
Funding from customer deposits through branches represented 75.7 per cent.
“This has allowed us to transform our funding mix and reduce our reliance on more expensive funding lines, such as securitisation, which now represents 8.6 per cent of
funding in June 2021, compared 19.7 per cent in June 2018,” the board said.
“The upgrade of the core banking system was completed during FY21, enabling the addition of Open Banking processes and services for the future.”