About this report - Overview

In 2013 bankmecu is presenting its customers and stakeholders with a concise Corporate Report of performance against its Strategic Plan.

bankmecu is one of three Australian companies – and the only Australian customer owned business – participating in an international pilot project being run by the International Integrated Reporting Council (IIRC). The IIRC is leading the development of a global framework for integrated reporting with a view to publishing a set of international guidelines in 2014.

Through this report, bankmecu aims to more concisely communicate its financial and non-financial performance, to demonstrate the creation of shareholder value. Content has been selected through a process of stakeholder engagement and materiality assessment in response to annual report feedback, a customer insight survey, a staff organisational survey, Board annual risk assessment, complaints and compliments and other ad hoc stakeholder engagement conducted throughout the year.

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Damien Walsh, Managing Director, sums up the year and looks to the future

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About this report - In depth

Structure and scope

In 2013 bankmecu is presenting its customers and stakeholders with a concise Corporate Report of performance against its strategic plan. This report is supported by detailed data available through a dedicated website.

The reporting period is from 1 July 2012 to 30 June 2013 (unless otherwise stated). The report incorporates the activities of mecu Limited (trading as bankmecu) and its subsidiaries. bankmecu’s previous Annual Report was made available in October 2012 for the period 1 July 2011 to 30 June 2012.

bankmecu is one of three Australian companies – and the only Australian customer owned business – participating in an international pilot project being run by the International Integrated Reporting Council (IIRC). The IIRC is leading the development of a global framework for Integrated Reporting.

This year the main focus towards integrated reporting is in refining report materiality, structure and content communication.

Our aim is that this report will demonstrate how the Bank creates, distributes and retains shared value to its customers and other stakeholders.

bankmecu aims to ensure the content of this report is of material importance to stakeholders and that it is inclusive, responsive and transparent.

No material limitations have been considered in determining the scope or boundary of this report.

The performance of third-party organisations providing services to bankmecu and its customers through relationships do not form part of this report.

To provide feedback or ask questions regarding the content of Corporate Report, email mail@bankmecu.com.au or phone 132 888.

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Corporate Report readers

bankmecu believes readers of its Corporate Report to be individuals with an interest in the Bank’s approach to sustainable business practice, including:

  • Board members
  • Customers
  • Employees
  • Suppliers
  • Regulators
  • Potential customers
  • Communities of interest
  • Media
  • Political leaders
  • Customer owned banking sector

Engagement with the above stakeholder groups throughout the year helped determine the content of this report.

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Determining the content of the report

bankmecu has made a series of commitments to sustainable development. These commitments together with the business strategy and stakeholder engagement activities, help determine the content of this report. bankmecu also uses the most widely recognised and internationally accepted reporting framework, the Global Reporting Initiative (GRl), to assist determine content in line with best practice.

Our participation in the IIRC pilot program is also assisting the Bank’s approach towards developing a more integrated report.

As required by law, bankmecu provides statutory accounts data which supports the Corporate Report. This section includes data that is mandatory under Australian financial sector regulations.

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Stakeholder feedback on the 2012 Annual Report

To assist develop its 2013 Corporate Report, bankmecu provided the opportunity for stakeholders visiting the reporting website to offer their feedback on the previous years report. No feedback was provided this year. Response rates in previous years have also been low.

Other sources of feedback sought included Australasian Reporting Awards (ARA) feedback, IIRC pilot program investor participant feedback, internal feedback from the Board, staff members and academics.

Feedback from these sources indicated the Annual Report demonstrated many of the qualities of the emerging discipline of integrated reporting. The Report was viewed as succinct at just 16 pages while covering the key risks and opportunities. It was also felt,  there was a strong strategic focus, that value creation came across well, and there was adequate governance demonstrated.

Key opportunities for improvement included:

  • Enhanced navigation
  • Usage of familiar terms to aid navigation
  • Less text, more diagrams to illustrate performance
  • Stronger coverage of future challenges expected and strategies developed to tackle them
  • An outline of where bankmecu wants to go next and related objectives and targets to get there
  • Linkage between remuneration and progress towards bankmecu’s objectives
  • Reporting on targets and progress towards them
  • Upfront outline of materiality determination
  • Organisation overview upfront

Feedback is fed into annual report planning.

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Materiality assessment

bankmecu conducted an internal review to identify its material issues. This included reviewing annual report feedback, Customer Insight Survey, Staff Organisational Survey, Board Annual Risk Assessment, complaints and compliments and other stakeholder engagement activities.

Senior management used the AccountAbility 5-part materiality test to determine which material issues were the most important to ensure the long-term sustainability of bankmecu operations. This required balancing stakeholder concerns with the needs of the Bank to maintain its value with values approach to banking and performance excellence.

Material issues, ranked in order of importance, were identified under each goal of the Strategic Plan, demonstrating relevance to the business.

Material issues identified

bankmecu continues to invest in employee development. Staff are also rewarded through a Staff Recognition Program.

Material issues identified Primary stakeholder group bankmecu response
1.0 Reputation – pre-eminent customer owned bank brand Goal one: leadership in customer owned bank performance
Responsible banking – investment of customer funds

Board/employees

Customers

Potential customers

bankmecu has in place an ethical investment and lending policy. bankmecu is also signatory to UNEP FI, UN Global Compact, UN Principles for Responsible Investment and Global Alliance for Banking on Values to further guide best practice in responsible banking.
Lack of brand knowledge amongst customers and staff

Board/employees

Customers

Potential customers

Throughout 2012/13 bankmecu rolled out a new online brand training program across the business.
Staff development/skilled workforce

Board/employees

Customers

bankmecu continues to invest in employee development.

Staff are also rewarded through a Staff Recognition Program.

Internal culture/attracting good quality staff

Board/employees

Customers

bankmecu maintains a high level of staff satisfaction through training, treatment of employees and staff engagement.
Australian operated

Board/employees

Customers

Potential customers

Communities of interest

All bankmecu operations are located in Australia.
Environmental, social and economic issues within the community

Board/employees

Customers

Potential customers

Communities of interest

bankmecu continues to provide low cost lending and support for non-government organisations (NGOs). bankmecu also invests in alleviating relevant social issues through a Community Investment Program.
Leadership in public reporting of performance – integrated reporting

Board/employees

Customers

Potential customers

Communities of interest

Media

Customer owned banking sector

Regulators

bankmecu is participating in the International Integrated Reporting Council pilot program to integrate traditional financial reporting with Environmental, Social and Governance (ESG) reporting. This will assist demonstrate how the business creates value over the long term.
2.0 Target market customers Goal two: increase market share amongst chosen target markets
Ageing customers/attracting new customers

Board/employees

Customers

Potential customers

bankmecu monitors the age profile of its customers and recognises the importance of strategies to both retain existing customers and attract younger customers.
3.0 Customer benefit: value and values Goal three: deliver customer benefit
Customer benefit/competitiveness

Board/employees

Customers

Potential customers

Communities of interest

bankmecu operates for the benefit of its customers who also own the company.

Economic and social impact of a higher cost of living/banking transaction fees

Board/employees

Customers

Potential customers

Communities of interest

bankmecu continues to provide value through a socially responsible product offering and responsible lending and investment practices. The annual Canstar Cannex evaluation of bankmecu‘s transaction fees and rates shows customers are better off than the average of the big four banks.
Customer service

Board/employees

Customers

Potential customers

bankmecu prides itself on its customer service and monitors performance through a Customer Insights Survey, compliments and complaints register, internal audit – service centre visits and National Call Centre performance.
Impacts of lending: housing, cars

Board/employees

Customers

Potential customers

Communities of interest

Product development to minimise environmental and social considerations.
Access to banking, online service delivery and communication

Board/employees

Customers

Potential customers

bankmecu is working towards improving online service delivery and communication through improved transactional services, enhanced mobile banking services and the new online portal bankmecu Central.

bankmecu has a Financial Inclusion Policy to reduce financial exclusion and improve access to products and services across identified disadvantaged groups.

Carbon neutrality

Board/employees

Customers

Mutual banking sector

bankmecu will remain carbon neutral in 2012/13.
Competition for retail deposits

Board/employees

Customers

Mutual banking sector

bankmecu provides competitive pricing benefits which are externally assessed by Canstar Cannex against Australia’s four major banks.

bankmecu has in place policies and procedures to ensure conservative low risk banking practices.

4.0 Governance – customer accountability and participation Goal four: excellence in governance
Customer participation

Board/employees

Customers

Potential customers

bankmecu continues to engage with customers to increase their participation in the bank they own.
Stewardship of customer wealth

Board/employees

Customers

Potential customers

bankmecu has policies and practices in place to ensure the long-term sustainability and profitability of the business.
Regulation compliance

Board/employees

Customers

Suppliers

Regulators

bankmecu has embedded a compliance culture across the organisation and complies with all relevant regulations.
Risk management

Board/employees

Customers

Suppliers

Regulators

bankmecu maintains a risk management framework and has appropriate risk management policies and procedures.
Board renewal

Board/employees

Customers

Regulators

bankmecu initiated a Board renewal plan in 2011/12, with one new Director appointed in 2012/13.
Transparent and accountable

Board/employees

Customers

Potential customers

Communities of interest

Media

Mutual banking sector

Regulators

bankmecu endeavours to produce a leading practice Corporate Report to demonstrate performance against its strategic plan.
5.0 Profitability and productivity – effective, efficient and sustainable Goal five: deliver profitability and productivity
Delivering on our planning matrix

Board/employees

Customers

Regulators

bankmecu renewed its business strategy in 2013 which aims to deliver on the Company’s planning matrix.
Operational impacts

Board/employees

Customers

Potential customers

Communities of interest

bankmecu developed an Environmental Management System (EMS) in 2011.
Supply chain/supplier performance

Board/employees

Customers

Potential customers

Communities of interest

bankmecu developed a supply chain management system in 2011 to improve purchasing practices.

Renewable energy

Board/employees

Customers

Potential customers

Communities of interest

bankmecu has installed solar panels at its Kew Head Office and continues to investigate other renewable energy options.

bankmecu also considers this material issue in product development and its Community Investment Program.

6.0 Sustainable growth Goal six: grow assets to $3.7 billion by 2017
7Growth

Board/employees

Customers

Regulators

bankmecu renewed its business strategy in 2013 which aims to deliver sustainable growth. This strategy is renewed annually.
Scale/reach

Board/employees

Customers

Potential customers Regulators

bankmecu has undertaken strategic mergers to increase scale and reach for the benefit of customers.

bankmecu merged with Fitzroy and Carlton Community Credit Cooperative (FCCC), contributing $793,618 in net assets to the business.

Issues of material importance are reflected in bankmecu’s Corporate Report.

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