Banking Newsletter - December 2012

We cover regulation, customer/channel trends, ATO liquidity charges, consumer protection, Sibos conference and results from major banks and mutuals.

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Banking Newsletter - December 2012

Mutuals: A new beginning amid tough competition 

2011-2012 was a year of mixed fortune for Australia’s mutual banks, credit unions and building societies (the 'mutuals') and according to KPMG’s 2012 Mutuals Survey, the sector can expect new challenges ahead.

The mutuals faced a testing year in 2012, with a 9.9 percent decrease in operating profit after tax, while achieving growth in assets of 4.5 percent. The reported decrease in operating profit after tax was caused partly by a reduction in margins and falling interest rates.


Asset growth was slower during the current financial year due to the intense competition in the lending and deposits markets, as well as global economic uncertainty which continues to weigh on consumer sentiment. Despite the challenging environment the mutuals produced positive asset growth at an average of 4.5 percent (7.6 percent in 2011), higher than the major banks average of 3.9 percent (8.8 percent in 2011).

KPMG also surveyed the mutuals’ views on themes of the current banking landscape including: social media, mobile technology and the impact of regulation and risk management.


The responses give insight into how the mutuals see the future:

  • 88 percent of respondents consider social media to be important to their strategy
  • 88 percent expect to spend more in 2013 on mobile technology
  • 72 percent believe Basel III will disadvantage their business
  • 68 percent said a fifth banking pillar isn’t possible
  • 74 percent believe there are government and industry barriers affecting their ability to compete
  • 67 percent called for a review of the financial system.

The results indicate that the sector is facing a series of complex challenges and opportunities including the impact of increased regulation, need to identify innovative ways to grow, and the need for sophisticated technology infrastructure.

2013 marks the beginning of a new phase for the mutuals. In an extremely competitive market attracting customers by continuing to focus on high quality service, customer satisfaction and strong brand strategy will be the priority.

If you would like to discuss either of the report findings in more detail please contact us. 

Peter Russell

Peter Russell

Partner, National Head of Mutuals

+61 2 9335 7731

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 In this issue

Building Societies and Credit Unions (Mutuals) Survey 2012

Building Societies and Credit Unions (Mutuals) Survey 2012
An analysis of the results from KPMG's Credit Unions and Building Societies (Mutuals) survey for 2012.