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Abacus chief executive officer Louise Petschler said the mutual banking business model had performed well in the current conditions despite a drop in profits.
The shocks and stresses of the global financial crisis have eaten into the earnings of Australia’s credit unions and building societies, with the industry’s net profit falling 24 per cent from $454 million to $344.5 million for the year to 30 June.
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“The fall in profit reflects factors such as the impact on margins of interest rates being cut to ‘emergency’ levels,” Ms Petschler said.
“The outlook for the sector is bright with the impact of one-off factors already receding.”
Abacus is currently lobbying the government for changes to the pricing of the wholesale funding guarantee, saying the current structure favours high-rated banks.
“The current fee structure has had the unintended effect of strengthening the position of major banks against their smaller, more customer-focused competitors,” Ms Petschler said.
“A fair fee structure will further boost competition in the lending market and send a strong signal about the Government’s confidence in the strength of Australia’s prudential regulation regime for ADIs.”
Ms Petschler said the industry was yet to receive a positive response from the government on any re-pricing of the guarantee.
