Chairman's Report 2004-2005Financial PerformanceAs one of my first tasks since taking over as Chairman, I am pleased to report that our Credit Union has again performed very well during the past financial year and is in a strong financial position to continue to expand into new markets and deliver improved products and services to Members. Whilst Membership levels have remained fairly constant this year both loans and deposits have increased by more than 11%. Total assets this financial year increased by 13.05% ($73.9 million) to $640 million. In the financial year 2004/2005 total deposits increased by 11.29% ($58.8 million) to $580 million. Most of the increase was in term deposits which resulted in a higher cost of funds. The growth can be attributed to a renewed consumer focus on short term investments. Overall loans grew by 11.77% or $57.3 million in the past financial year. Our Credit Union is still seen as a leader in the industry for commercial lending, which this year increased by $27.3 million. Commercial loans represent almost 30% of our loans book, home loans made up 62.68% of total loans, and increased by 8.30% or $26.2 million. Personal loans represent only 7.54% of our loan book, however, we did see a growth of 10.28% or $3.8 million. This growth in loans generally was achieved despite strong competition and a flattening of the housing market. Retirement Savings Accounts grew by more than $2 million to $12.5 million in the past financial year and are proving popular as a result of new Super Choice legislation. With the move from CGU to Allianz insurance, non interest income from insurance commissions amounted to $664,000 in the 2004/2005 financial year. Insurance sales were strong towards the end of the year and this is expected to continue into this financial year. Annual net profit for the financial year 2004/2005 was reported at $5.4 million, slightly down on the previous financial year’s figure of $5.6 million. This was due to increased pressure on margins as a result of competition, merger costs and the full amortisation of subordinated debt expenses in the financial year. Branches in our traditional markets continue to perform well with strong growth reported in northern NSW. Benefits to MembersOur Credit Union was pleased to be able to return $1.7 million in Bonus Share Dividends for the 2004/05 financial year – yet another example of our Credit Union’s focus on Members and how we differ from other financial institutions. Members have not only benefited through this dividend scheme but also from ongoing investment to improve and expand our extensive range of products and services. Our branch and ATM network continues to expand across the region. The Lismore branch, including a business and agri-banking centre, opened its doors in March and three new ATMs were installed at Lismore, Boambee Shopping Village and Coffs Harbour Regional Airport. With more than 30,000 aircraft movements and over 260,000 passengers a year, the Mayor of Coffs Harbour welcomed the installation of an ATM at the airport as an important service to the community In June Members of both Big River Credit Union Ltd. and Bananacoast Community Credit Union Ltd. voted resoundingly in favour of a merger. This will see the extension of the BCU network to 23 branches and agencies between Port Macquarie and Tweed Heads with more than 26 ATMs. Whilst around 57% of Members regularly enjoy the personal service at branches, more and more are choosing to embrace our flexible delivery options with almost 32% of Members now registered for iBank internet banking compared with 21% last year. On average 36,835 iBank transactions are conducted per month and phone banking is continuing to prove popular with around 75,000 Member enquiries a year. Community FocusAs a community credit union we remain focused on servicing the needs of our Members and supporting the communities in which they live. Many schools, sporting groups, local events and initiatives benefited from sponsorships across the region. Housing, Employment and Education Committees, established by the Board, continue to address the issues facing the growth of sustainable rural communities and to work with strategic partners in the area. Significant sponsorships over the past financial year included the BCU Bachelor of Business Scholarship, which was offered to a student starting studies in 2005. It was awarded on academic achievement, personal maturity and social responsibility. Over the past three years BCU has actively supported the education and employment of youth in this region through traineeships. This important initiative will help attract and retain the region’s best and brightest students in the field of business. The Scholarship, which was hotly contested across the region, was awarded to Mitchell Tate from the small NSW town of Manilla. Mitchell is now studying Marketing and Law at the Lismore campus of Southern Cross University. In addition to the sponsorship of a number of regional Business Awards to support local business growth and employment, BCU was this year the major sponsor on the North Coast of the 2005 NSW Group Training Awards. These awards not only acknowledge the contribution made by local employers in training our youth but celebrate the achievement of some very talented individuals. The Awards promote the benefit of employing trainees and apprentices. Research into issues facing aged care services in the region will be a focus of Dr. Colleen Cartwright, appointed to the “BCU Neville Spear Chair of Aged Services” at Southern Cross University. This position, named in honour of our founding General Manager, was sponsored by BCU and is the first professorial chair to be sponsored at the University. With Dr Cartwright’s extensive research and teaching experience in the field of public health and aged care it is planned to not only provide opportunities for education and employment in our region but to find solutions to aged care issues, which can be implemented throughout Australia. In many areas between Port Macquarie and Tweed Heads the cost of housing is putting home ownership out of the reach for many of our Members. BCU has commissioned Southern Cross University to conduct research into the issues confronting people trying to enter the housing market and a pilot project will be announced in the 2005/2006 financial year. The FutureWhilst maintaining focus on Member service, community, family and business banking, it is the Board’s aim over the next five years to almost treble our funds under management. This will ensure BCU remains a viable alternative to the major banks for a greater number of rural communities. To achieve this in today’s market is a serious challenge, particularly in light of economic forecasts, increasing reliance on technology, cost of legal compliance and increasing national and international competition. The importance of retaining money locally to support the local economy and communities will be critical. The ongoing and increased support of Members in take up of our products and services will be paramount …..whether it be loans, savings, term deposits, insurance, financial planning or any other new product offering. In addition to opening new branches, mergers will be instrumental in creating a stronger capital base that will underpin BCU’s future expansion plans - not only in NSW but Queensland too. Following the recent merger with Big River Credit Union, BCU is now one of the largest regional Community Credit Unions in Australia employing around 250 staff. Our success in the past has come from our ability to maintain a community focus, deliver personal service, provide Members with value, plus offer a comprehensive range of products and services. BCU commits to retain this focus in the future and will continue to invest in new branches, employing local staff focused on Member service. We acknowledge however that many Members choose to do their banking electronically at a time and place to suit them. In view of this we will be increasing our investment in Information Technology to $3.8 million in the forthcoming year and plan to launch a new service …… BCU Direct. CloseAfter 14 years on our Board, seven of those as Chairman, Bill Singleton decided to stand down to focus on ‘more relaxing activities’ believing it time to move on and ‘leave the hard work to the younger Members of the Board to continue’. As the new Chairman, I have big shoes to fill taking over from Bill, but I’m confident I can carry on the good work that he has achieved. The Deputy Chair position, which I vacated, has been filled by long-time BCU Board Member, Geoff Johnson. I would also like to acknowledge the contribution of past Director, Roley Palmer. Being a Member of the Banana Growers Federation District Council, Roley always felt an affinity with the Credit Union and during his 23 years saw BCU grow to enhance the lives of many in the area. Two new Directors from the Grafton area, Peter Ellis and Peter Dougherty, both of whom previously sat on the Board of Big River, have joined the BCU Board. This is an exciting time for BCU in terms of growth, and over the next few years the new Board plans to ensure BCU’s position at the forefront of the credit union industry. In closing I would like to thank my fellow Directors, our CEO (Ray Battle), our Deputy CEO (David Bevan), the Management Team and all BCU Staff for their ongoing commitment to making BCU a credible force in the finance industry and a credit union we can all justifiably be proud to be Members of. Gerry Regan Requires Adobe Reader. Click here for a free download if you don't have it. |