RBA’s review notes strong credit unions, building societies
30 September 2010
Credit unions and mutual building societies welcomed the RBA's acknowledgement of their strong capital position in the Financial Stability Review, out today.
"Four and a half million Australians bank with credit unions and mutual building societies," said Louise Petschler, Abacus CEO.
"We are the fifth-largest holder of household deposits, a major lender with consistently better rates than the banks and a branch network that exceeds the largest bank."
"Being owned by our customers, we can focus on their needs and deliver well-managed banking services with competitive prices," said Ms Petschler.
The Reserve Bank's Financial Stability Review confirms Australia's economy is on stable ground, with Australia's banking system maintaining a strong capital position. The RBA notes that: "Tier 1 capital ratio is currently around 9.5 per cent, well above the regulatory minimum of 4 per cent. The credit union and building society sectors are also well capitalised, with aggregate total capital ratios of around 16 per cent."
"The RBA's Review shows that credit unions and building societies are extremely well capitalised, even more so than Australia's already well-capitalised banks," said Ms Petschler.
"This is good news for the Australian public, highlighting stable, well-run banking institutions offering real value and choice to customers."
Abacus also flagged the sector's performance in areas relevant to the Review.
"Mutuals have extremely strong credit quality across our portfolio of some $50 billion in home loans, better than competitors, enhancing the already sound asset quality in the banking system."
"Growth is also positive, with APRA data showing our annualised home loan growth exceeding the RBA's estimate for the major banks," said Ms Petschler.
"As the largest lender and holder of retail deposits outside the big 4 banks, mutuals are pleased to contribute to financial stability, as well as much-needed competition and choice."
Credit unions and building societies are regulated under the Banking Act 1959 and meet a full range of prudential, financial services and corporate requirements.
For more information, please contact:
Pamela Eldridge
Senior Adviser - Media, Public Affairs
(02) 8299 9024; 0423 843 790
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