Mutuals Industry Review 2016

Mutuals Industry Review 2016

2016 saw Australia’s credit unions, building societies and mutual banks (‘the mutuals’) perform strongly in an environment of low economic growth, interest rates and inflation.

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Partner and National Sector Leader, Mutuals

KPMG Australia

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KPMG’s Mutuals Industry Review 2016 finds that the mutuals’ balance sheets were strengthened with asset growth of 7.8 percent, compared with 5 percent for the overall banking industry. Profitability metrics were up, with $626 million profit before tax reported for the year, an increase of 2.7 percent on 2015.

Key financial results for the Mutuals sector

  • Residential lending increased by 9.8 percent (2015: 7.9 percent)
  • Deposits increased by 7.8 percent (2015: 7.6 percent)
  • Technology spend increased by 11.3 percent (2015: 2.7 percent)
  • Net interest income grew by 6.0 percent (2015: 3.9 percent)
  • Non-interest income declined by 0.1 percent (2015: 3.3 percent increase)
  • Impairment provisions decreased to 0.07 percent of average gross receivables (2015: 0.08 percent)
  • Capital levels fell slightly to 17.5 percent (2015: 18.0 percent).

The strong results can be attributed to five key factors

  • Growth in lending portfolios (led by residential property activity)
  • Continuation of strong credit risk management practices and well-defined risk appetites
  • Expansion of distribution networks leveraging digital reach and third-party distribution channels
  • Benefits from increased technology spend on new mobile platforms as well as transaction origination and servicing capabilities
  • Continued strengthening of staff capabilities.

About KPMG’s Mutual Industry Review 2016

The report examines the performance and the role of the mutuals in Australia’s financial services sector for the financial year ended 30 June 2016. The mutuals sector covers Australia’s building societies, credit unions and mutual banks. The survey considers the financial performance for the year ended 30 June 2016, as well as responses to a qualitative questionnaire covering the risks, challenges and opportunities facing the industry.

Further information

Video insights and perspectives

Below are videos providing perspectives on the 2016 results and insight into industry issues and transformation affecting the sector.

Webinar recording

Watch a recording of the webinar.

Presentation slides

Mutuals Industry Review

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