Mutuals outpacing major banks

According to the Australian Prudential Regulation Authority’s latest property exposures statistics, the customer-owned banking sector’s housing loans have increased by 8 per cent over the past 12 months, while the major banks’ grew by just 2.6 per cent.

Additionally, total assets held by Australia’s customer-owned banking institutions increased to more than $119 billion, up by 1.6 per cent compared to the previous quarter.

Meanwhile, the major banks’ total assets declined by 0.4 per cent in the past quarter.

Pointing to its own individual performance, Heritage has noted that its total home loan portfolio has grown to over $8 billion.

Heritage Bank CEO Peter Lock observed: “The latest figures from APRA are evidence that Australians are placing a greater focus on becoming more informed on who they choose to bank with.

“That’s why it’s so important for financial institutions to keep the needs of their customers top of mind and adapt accordingly.”

Mr Lock also acknowledged the role of the banking royal commission in “shining a spotlight” on the “stark difference in operating models between the big banks and customer-owned institutions”.

“It really is no surprise that consumers are looking beyond ASX-listed banks and turning to the mutual sector,” Mr Lock added.

“The biggest difference is that listed banks exist to maximise the dividends they pay to shareholders. Mutuals are the opposite – owned by our customers, not shareholders. We exist solely to deliver great value to our customers and put their needs first.”

He concluded: “APRA’s latest findings are an indication that consumers want to bank with an institution that puts their interests first and aren’t afraid to move somewhere that will.”

[Related: ADIs report $14.3 billion fall in mortgage volumes]