Concern over local branches

Andrew Mathieson
BENDIGO Bank has reassured mum and dad investors their money is safe despite a retired auditor raising concerns about the bank’s community branches, including one on the Bellarine Peninsula.
Retired auditor John Williams found that 55 of Bendigo’s 77 community banks around Australia lost money in 2008/2009.
Nearly a third had spent all of their equity capital since opening and 58 had “negative cash flow” at the end of the year, Mr Williams said.
Investors had sunk more than $100 million into Bendigo’s 259 community banks over more than a decade.
Mr Williams put 17 branches on his “sick list”.
“They rely on the community but the community takes all the risk and for Bendigo it’s a win-win situation,” he said.
Mr Williams said the Bellarine Peninsula branch had lost $26,627 for the year.
He was also concerned about the Lara branch after shareholders did a “pretty good job” raising capital.
“I’ll be surprised if they haven’t suffered losses.”
Bendigo Bank spokesperson Lauren Treacy said financial returns to branch communities was “paramount”.
The Bellarine branch returned $55,900 last year and $300,000 since 1999 back to local community projects and groups, she said.
“There are many reasons a community decides to establish a community bank branch and shareholder returns are not the only benefit this banking model can achieve.”
Mrs Treacy said Bendigo had “the utmost confidence in the financial and social sustainability of the community bank model”.
Under the Bendigo model, profits are split between shareholders and investment in community projects.