Bendigo Bank slams loss claims

AS GOONELLABAH residents and businesses were meeting last night to discuss setting up a Bendigo Community Bank, its parent Bendigo and Adelaide Bank was in damage control after the Fairfax press published an article critical of the business model by two Walkley Award-winning business journalists on the weekend.

The article, which quoted former investors in some of the local banks and leading banking analysts, said a third of Bendigo’s 193 community banks reported a loss last year.

In one case a director didn’t realise brackets around figures on a profit and loss statement indicated a loss.

However, Bendigo and Adelaide Bank managing director Mike Hirst hit back yesterday saying the bank believed “the article to be dishonest by omission and lack of balance”.

He said the company, with more than 67,000 shareholders, had only received 20 complaints in 11 years.

“That is a miniscule 0.03%,” Mr Hirst said.

Goonellabah Newsagency owner Peter Whitton, who is pushing for a Community Bank at Goonellabah, yesterday said he was satisfied by the bank’s assurances.

“I still think it should go ahead and would be a good thing for the community,” he said.

Leading banking analyst Brett Le Mesurier, of BBY, is quoted in the article by Fairfax journalists Rafael Epstein and Adele Ferguson as saying the “glory days of regional banking are behind us”.

“The curtain came down with the advent of the global financial crisis. Regional banks were major beneficiaries of cheap wholesale funding associated with the global credit boom, and that finished years ago,” he said.

The article also quoted a Macquarie Equities analyst who said Bendigo’s decision that head office would renegotiate with the community banks to claw back some of the margin share indicated “vulnerability of the community banking model”.

Topics:  bendigo bank goonellabah lismore

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