High hopes for Pyrmont’s community bank

A Bendigo community bank branch could soon be established in Pyrmont, provided the necessary capital is raised.
Chairman Mr Bruce Napthali said the board had received $700 000 in share purchase investment, and is optimistic it will raise the required capital of $900 000.”
Mr Napthali said a community bank branch would offer additional banking and financial services in Pyrmont. “A community owned and operated bank keeps profits in the community in the form of shareholder returns and grants for local projects.
“The good news is the board is close to settling on a site in the centre of Pyrmont,” Mr Napthali said. “But funds must be in place before the board can proceed with the lease.”
Local businesses are supporting the proposal. “Profits stay in the community, which is good for residents and local businesses,” said Muriel Chen, co-owner of Pyrmont’s ‘Blue Eye Dragon’ restaurant.
There are 232 Bendigo community banks across Australia. The model is based on a community owning its own branch in a franchise agreement with Bendigo. The bank provides financial services, with profits shared on a 50:50 basis.
Mr Ray Chappell, Bendigo senior executive said the broad benefit of community banks is to “retain some of those profits and re-circulate them within their own community”. This is achieved through receipt of shareholder dividends and community project grants.
Funding of local projects by community banks in Australia has now topped $30 million.
Community banks also contribute to local commercial activity. Charles Perry, Pyrmont community bank Secretary said: “In areas where community banks have established, local business has gone up, in some cases by 20 per cent.”
While there has been some speculation on the impact of the global financial crisis on community banks. Mr Napthali said Bendigo sources its funds largely from local lenders and investors and that there is no real need for funds from global sources.
Mr Chappell said, “Major banks have become centralised, globalised, removed from the local village. It’s normal to have a need to belong to the village community.” The community is empowered through participation.

by Giselle Gavagna