Mutuals growth slows but profits rise

By Eliot Hastie
 — 1 minute read

The last financial year has seen Australia’s mutual banks, building societies and credit unions continue to grow albeit at a slower pace while profits continue to rise. 

A KPMG report into the mutual industry found that an environment characterised by low interest rates, increased competitions, technological innovation and evolving customer preferences was the perfect breeding ground for mutuals profits. 

The report included the financial results of 48 Mutual for the year ending 30 June 2018, which represent over 90 per cent of the sector. 


Mutuals balance sheets grew by 5.6 per cent, down from the 7.3 per cent growth of 2017 while operating profit grew by 4.6 per cent to $634.8 million compared to 2017 when it fell by 4.3 per cent.

KPMG Australia’s national head of banking Ian Pollari said the environment was perfect for mutuals but the overall banking industry had taken a hit this year. 

“The 2018 financial year saw the mutuals record slower growth compared to previous years in a challenging operating environment for the banking industry as a whole.” 

“In the face of industry-wide headwinds, the mutuals continue to perform strongly and looking ahead will seek to differentiate the home loan experience through better member service and mobile product offerings, underpinned by investment in digital technology,” he said. 

The report found that the biggest opportunities for the mutuals were in improving efficiency, more collaboration with alliance partners and greater collaboration with its peers. 

KPMG national sector leader mutuals Brendan Twining said the strength for mutuals currently was the trust stakeholders had in them. 

“The success of the mutual sector lies in their ability to retain their strong branding as ‘community-focused’ and providing clear solutions that are aligned to members interests,” he said. 

Moving forward, mutuals had to continue to fight for its customers said Mr Twining as that would keep them ahead. 

“Going forward, mutuals must continue to take ownership of their customer advocacy and branding efforts and own the trust narrative through their interactions with all stakeholders.”


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Mutuals growth slows but profits rise
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