We seek to respond to the letter submitted to your paper by John Oxley 10 May 2019 to state the facts in relation to each of the reasons made in that letter by John Oxley.
- The headquarters of the bank will be relocated to Armidale and decisions will be made by majority directors who would, most likely, prefer their local (Armidale) interests.
The Registered Office of Regional Australia Bank is in Armidale and will remain there after the merger if it is supported by both organisations' members. The critical point here is that both Administration Centres will remain and there will be senior management located at both Wauchope and Armidale.
The Board of Regional Australia Bank have committed to hold Board meetings in both centres and the current Board of Regional Australia Bank is comprised of six Directors from Newcastle, Sydney, Brisbane (two), Gunnedah, and one from Armidale.
As stated in the Member Information Document 3, Holiday Coast Directors will go forward to the Regional Australia Bank Board being Allan Gordon, David Johnson and Neville Parsons. The rotation of the directors is also identified within the Information document. As John Oxley would fully understand, it is the responsibility of any director to consider the interests of the membership as a whole and it is against Corporations Law for a director to not do that.
- The better interest rates quoted as a benefit have not been adequately explained and are, in any event, forecasts based on assumptions which are unproven.
The Member Information Document highlights the comparisons as being as at October 2018 and the commitment from Regional Australia Bank is that on merger no Holiday Coast member will be impacted negatively by the merger and indeed the majority will in fact be better off through better savings, investment and loan rates as well as lesser fees and charges.
The following is an extract from the "We're better together" brochure that was distributed at the Branch Forums and also in the Member Information Pack:
Changing to a more contemporary transaction fee structure by removing excess transactions fees and reducing monthly account servicing fees.
Better Interest Rates
An estimated combined value of over $750,000pa in savings for our members. *i
*i Based on a comparative assessment of Holiday Coast Credit Union and Regional Australia Bank loans, savings and investment product interest rates at October 2018.
The data within the document is relative as at October 2018 but the underlying principle of no Holiday Coast Credit Union member being worse off is an overarching principle that is a commitment by the Board and senior management of Regional Australia Bank and is included in the Memorandum of Understanding (MOU) signed by the CEO's and Chairs of both HCCU and Regional Australia bank following both Boards' decision to proceed with a merger.
It is critical to note that the information within the Member Information document has been submitted to, reviewed by and approved for release by APRA and as such APRA will also have an interest in overseeing the delivery of the commitments within that document and the conditions of the merger.
The only qualification being through any change in the market interest rates as a result of any movement in economic conditions. That said, then the relativity between the current entities would still remain.
- Less fees have also not been adequately explained (have you ever known a bank to reduce fees?)
This is a commitment and a given. It is a direct result of the size and scale. Indeed, without this merger Holiday Coast Credit Union will need to review and likely increase existing fees and charges just to maintain the required profitability to meet the strengthened APRA Capital requirements as well as the low interest rate environment that is predicted to continue for up to 2 years.
- The Credit Union is, by its own admission, in a healthy financial position, so there is no need for crisis action such as this rushed merger.
This is far from a crisis action but an opportunity to deliver ongoing branch and community relationship banking through a larger mutual that is truly focussed on the region. Our Regulator continues to recommend that mutuals look at their ongoing viability and relevance into the future and the Board of Holiday Coast Credit Union have done that.
The continuing low interest rate environment, the very competitive market that we operate in, the APRA heightened Capital requirements and the need to continue to invest in technology have all impacted the decision to recommend this merger now.
It is also noted that this merger aligns to each of the key guidelines that Holiday Coast Credit Union had developed in 2011 as critical elements for the Board to consider and achieve with any merger.
It is the right time to merge when both organisations are financially sound and when both organisations have the same values and vision in delivering relationship banking for members.
- The benefits of increased scale and operational efficiency relating to the merger are probably correct but must be seen in the light of the loss of autonomy.
The merger will certainly deliver scale and operational efficiency and as a mutual will continue to deliver quality financial products and services for members.
What we do and how we do it will be unchanged. In fact, the ability to better serve all members though products and services will be greatly enhanced. One of those benefits will be the ability to "bank" the businesses in each of our towns and communities. This has been an area that Holiday Coast Credit Union has been constrained in servicing as a result of our scale and size.
In the merged entity each and every member has the same ability to have their say and most importantly to exercise their democratic right and to vote as a member owner.
The other relevant information here is that the current Strategic Plan of Holiday Coast is very much aligned to the Strategic Plan of Regional Australia Bank and the future is very much one driven by the member relationships and the branch and community focus of the Plan.
- A troubling aspect of this proposed merger has been just how badly the directors and senior management have handled dealings with the members.
This is erroneous and indeed any member that has raised any questions or concerns has been responded to by either local staff, senior management or CEO Neville Parsons. This continues to be the case and there have been Media Releases and advices published on member statements, the credit union website and also information sent to members via electronic mail.
In addition, there were 10 Branch Forums held between 25 March 2019 and 16 April 2019 where all members and any community members were invited to attend.
All of this is in addition to the Information Pack that was sent to all shareholders after the Member Information Pack, The Notice of Special General Meeting and the Proxy Form were approved for release by our Regulator APRA.
All the prescribed information plus additional information has been made available to members.
- A notice was not posted out to all members setting out the dates of the information meetings (did you know about them?)
Every member received advice of the Branch Forums as part of their December end member Statement.
The actual Forums were promoted on the credit union website as well as via Media Releases, electronic mail to members, individual notifications on branch screens specific to that branch and via flyers that were available in each Branch.
Indeed, Mr Oxley himself attended the Port Macquarie Branch Forum held at Port Panthers on Tuesday 9 April 2019 and received the information provided at the Branch Forums.
We ask that you be the judge as to the content and quality of the information shared with and provided to members and the broader community.
We encourage all members to vote and to vote in favour of the merger as that is the way that you will guarantee the future delivery of relationship banking within your community by your own mutual financial institution.
Please ensure that you complete your Proxy Vote unless you know that you will be at the Special General Meeting at Wauchope Country Club on Wednesday 29 May 2019.
Neville Parsons, CEO Holiday Coast Credit Union
Allan Gordon, Chairman, Holiday Coast Credit Union
Kevin Dupe, CEO, Regional Bank Australia
Graham Olrich, Chairman, Regional Bank Australia