Banking on the community

When the Reserve Bank announced the 0.25 per cent lift in interest rates early last month, it did not take long for the big four banks to pass on the rise to their borrowers. In fact, it took just five hours for Westpac to adjust its figures accordingly. Within two days, the National, Commonwealth and ANZ banks had all followed suit.

Bendigo Bank, meanwhile, the community bank franchise network that now has almost 300 branches Australia-wide, including one in Turramurra and another in St Ives, waited almost three weeks before passing on the rise to its new and existing customers - Bendigo's rates did not go up until 21 March - because Bendigo has a policy of making sure all their existing customers have been personally notified in writing about interest rate rises before they actually make the rate adjustments.

Furthermore, anticipating the rise, Bendigo, applied the new rate to a selection of its transaction accounts before the Reserve Bank even made the announcement, giving customers more interest on their savings. The big four, who have not raised rates on transaction accounts for the past three years, despite five interest rate rises totalling a 1.25 per cent increase, are not expected to do the same.

According to Turramurra resident and local business owner Russell Smith, these policies are indicative of the way in which Bendigo Bank mandatorily treats its customers - with respect.

Smith, who owns the Thriftylink Hardware store right next door to the Turramurra Community Bendigo Bank, started doing his business banking with the branch in June last year, after being a customer with the nearby National Australia Bank for 30 years.

Now, Smith does his personal banking at Bendigo too, has a Bendigo Bank credit card, uses the Bendigo ATM out the front, and usually comes in once or twice a day for change.

The Turramurra branch opened its doors in October 2003, after local discontent over a string of big bank closures in the area prompted community action.

Smith's respect for the branch is clear. "It's very convenient, but that's not the reason I joined," he says. "If they were down the other end of [the street] I'd still be banking with them.

"I was really taken by the staff - they're always friendly and helpful. They called me by name the second time I walked through the door, and the services they offer are better than the other banks anyway," he says.

Smith also says their approach to banking is flexible and adaptable: "They don't just say no [to a request], they really try to help."

It seems Smith is not alone in his glowing appraisal of Bendigo. In 2003, the last time consumer magazine CHOICE released its bank customer satisfaction figures, Bendigo was placed second in terms of customer regard, with 72 per cent of respondents saying they were 'very satisfied' with Bendigo's services: "[Customers were] highly satisfied in terms of staff knowledge, courtesy, ability to carry out instructions, opening hours and queue length," the magazine wrote.

The big four, on the other hand, registered an average of just 12 per cent 'very satisfied'.

New CHOICE figures, out late this month, are expected to detail the continuation of this trend and highlight just how many people are abandoning the big banks in favour of the smaller competitors. As the ABC's 7.30 Report program reported last month, in the 12 months to January this year, all four of the major banks lost market share on household deposits to smaller banks such as Bendigo and Bankwest.

Chairman of the local company that owns the Turramurra Bendigo branch, David Langdon, says the bank also helps the community by keeping funds local, instead of allowing them to be funnelled away.

"If your money is kept in a local bank, the money will go back into the community," he says.

Indeed, despite not yet registering a profit (Langdon says it takes an average of three years before most Bendigo branches are in the black), Turramurra Community Bank has been active in supporting the community throughout the 18 months of its operations, by helping to fund local sporting groups, scout groups, schools and the Ku-ring-gai Philharmonic. "We're very pleased with what we've accomplished," Langdon says. "We're one of the fastest growing branches within the Bendigo network."

Today, the Turramurra Community Bank has more than $40 million and rising on the books, meaning the 350 local shareholders with a stake in the bank are as happy as their Bendigo customers.