Banking on more options

Reforms level banking field

HERITAGE Bank has welcomed new federal legislation which gives the customerowned and mutual bank a competitive edge against the Big Four in Australia.

CEO Peter Lock said the Treasury Laws Amendment (Mutual Reforms) Bill would “significantly improve competition in the Australian market” and give customers alternatives in the financial sector.

The legislation gives mutuals a greater scope to raise capital needed to invest and grow businesses which, for Heritage, means a better digital and physical presence across the country.

“For a long time banks like Heritage ... weren’t able to issue capital and that creates an imbalance in the playing field where the big are able to get bigger and the smaller are constrained,” he said.

“These measures will not mean we lose our mutuality.

“What it does mean is we will be able to issue a special instrument, a mutual equity instrument, that will be beneficial to our customers.

“There’s more money for investment and that means we can invest in better technology, better technology means more digital applications, it means the bank can expand its physical presence.”

Groom MP John McVeigh said the reforms would allow banks such as Heritage - the country’s largest customer owned bank - to raise funds needed to grow, innovate and compete with the major institutions.

The reforms were mentioned among the more than 70 recommendations of the Banking Royal Commission handed down earlier this month.