Newcastle Permanent last in the land

Ian Rogers Building Society
The NPBS headquarters in Newcastle, and final building society domain
The NPBS headquarters in Newcastle, and final building society domain

Newcastle Permanent Building Society is looking like it will be the one and only ADI of its type left in Australia before long, with customers of Big Sky Building Society advised yesterday that it will be renamed Australian Unity Bank Limited from 24 October.

Australian Unity Bank will take its place alongside the 22 credit unions and building societies that have made the leap to bank status over the last six years.

Queensland Teachers Credit Union was the pioneer in this movement, at least among mutuals, taking the name QT Mutual Bank in late 2011. It has since rebranded as RACQ Bank following a merger with the motoring association.

A subsidiary of ASX-listed Australian Unity since 2012, Big Sky Building Society took its now redundant branding from a credit union of the same name, which merged with Australian Unity’s then Lifeplan Australia Building Society. Its owner foreshadowed the name change six months ago, explained it as a response to deposit outflows.

The Mutual, in Maitland, is one more survivor of the once abundant building society fraternity and even this neighbour of NPBS may follow the trend.

Trevor Robinson, chair of Maitland Mutual Building Society, wrote in the 2018 annual report that “if  The Mutual adopts the word ‘bank’ into its name, this will clearly better explain what we do and will be more easily understood across all generations.”

Robinson added that “at this point [mutual bank branding] is simply under consideration by the board and management.”

With assets of A$672 million and member equity of $44 million, The Mutual would be found near the bottom of “bank” rankings. Newcastle Permanent, by contrast, has around $9 billion in assets, on a par with Heritage Bank (which could once claim to be the largest building society in Australia).

APRA lists 47 credit unions still trading in Australia, the remnants of a sector that once exceeded 700 entities, which in conjunction with building societies formed a democratic mutual banking sector that fulfilled the role of modern day marketplace lenders.

The number of building societies peaked at 153 in 1978, dwindling – via merger and demutualisation - to 24 by 1996, a short history by Dianne Thomson and Malcolm Abbott relates.

By early 2019 just The Mutual and Newcastle Permanent will remain, the last of lineage dating from the first “terminating building society” back in 1840s.