Heritage Bank reportedly aims to triple the size of its business banking portfolio over the next three years, as a part of an ongoing strategy to diversify both product and geographic weightings.
The bank will reportedly rely on the broker channel to further the distribution of its expanded business banking products over the next three years.
Heritage Bank chairman Kerry Betros made the announcement at the bank’s annual general meeting, which took place on Thursday, 31 October.
Mr Betros said the bank intends to significantly expand its existing business banking division, including its product offerings and processing capabilities to distribution channels, in order to diversify meaningfully into business banking.
“We currently have a relatively small business banking division, which specialises in looking after the needs of small to medium enterprises (SMEs) in south-east Queensland,” Mr Betros said.
“People in the small business sector really appreciate the personalised service that the Heritage business banking team is renowned for.
“We’ll maintain that focus on the SME sector, but what we want to do is expand our reach and open up the Heritage experience to more small businesses.”
In the process of expansion, Mr Betros highlighted that the bank will further utilise the broker channel.
“That will mean taking different approaches, such as moving into the business broker area and securing customers outside Queensland.
“The goal is to more than triple the size of our business banking portfolio by 2022.”
Heritage opens first branch outside QLD
In another expansion effort, Heritage opened its first bank branch outside of Queensland, in Sydney’s north-west.
The bank announced in July that it would open its first two interstate branches in Sydney, “bucking the trend” of big bank branch closures.
The first interstate bank, located in Castle Hill, opened its doors on Thursday, 31 October, another new branch in Parramatta due to open before the end of the year.
The two new branches in Sydney are reportedly part of a longer-term strategy for Heritage to open more branches in the Western Sydney area, as well as in the Melbourne metropolitan area.
“We’ve built up an existing client base outside Queensland through our mortgage broker partnerships over the last 20 years,” Mr Betros said.
“By establishing physical branches in Sydney and Melbourne, our aim is to build that client base in those areas and ensure a higher proportion of our lending comes from outside Queensland.”
‘Greater competition to the big banks’
Further, at the AGM, Mr Betros announced minor changes to Heritage’s constitution, to align with newly passed legislation that allows mutuals to raise capital.
“Access to capital has always been a limiting factor on the ability of mutuals to expand and offer greater competition to the big banks. This new legislation has overcome many of those hurdles,” he said.
“However, the devil is in the detail, and there is still much work to do before mutuals will be in a position to issue a capital-raising instrument. We have to be sure that the benefits in doing so will outweigh the costs.
“Heritage will continue to lead the customer-owned sector in investigating how we can best take advantage of this legislation.”
Mr Betros also highlighted at the AGM that a highlight of 2019 had been making the Heritage Bank Charitable Foundation operational.
“I announced at the 2018 AGM that we intended to launch the Heritage Bank Charitable Foundation, to provide grants to worthy charitable organisations around the country,” he said.
“I’m happy to say that we’ve completed all legal and logistical requirements to make the foundation operational, and it is now accepting tax-deductible donations from the public.
“We aim to start providing our first grants in 2020.
“Creating lasting legacies and providing community benefits are core to the Heritage Bank model, and making the Foundation operational is one of our proudest achievements in 2018-19.”
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Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.
Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency.
Hannah graduated from Macquarie University with a Bachelor of Media and Journalism.