Pyrmont community bank could fall short

The new Bendigo Bank planned for Pyrmont may not go ahead if the local community does not succeed in raising a further $150,000 by the end of the month.

August 31 marks the end of the prospectus period given to the Pyrmont Community Branch to raise the required $900,000 capital, however many who have pledged money are still yet to cough up the dough.

Community bank board secretary Charles Perry said that the time to invest money was now or never, because if the $150,000 isn’t raised, “there wont be a community bank.”

“It’s very achievable, but we do need people to jump in and buy some shares, and we’re reminding all the people who pledged – quite a number of people – to buy shares,” said Mr Perry.

Mr Perry said that once the capital is raised the bank could open at Pyrmont’s Union Square within six weeks. The board is currently waiting for the development application to fit out the old post office premises to be approved by Sydney City Council.

If the project fails to reach the necessary capital, then all money will be returned to community shareholders.

Star City, Pyrmont Supa IGA and Pyrmont Ultimo Chamber of Commerce are major shareholders to the project, as well as an array of local businesses.

The banking 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.

The retained profits are then recirculated throughout the local community, to shareholders and worthwhile community projects.

Community banks in Australia have fared well in the global economic crisis, rather touted as being able to bolster the local economy through community ownership and participation.