WHEN is a bank not a bank?
When it’s Hume Bank — or so its directors promise.
While most members present yesterday were in favour of changing the name to “bank”, there was still some confusion over just what that would mean.
Stuart Gilchrist said “nothing will change” other than the name, as he fielded questions from the floor.
“The name will change but the way we manage our business and relate to our customers will not,” he said — twice.
“Hume is owned by the members and the adoption of the word bank will not change that.”
One member asked for that to be noted, along with Mr Gilchrist’s statement there were no plans to list it as a public company.
Mr Gilchrist agreed, affirming Hume’s “strong commitment to mutuality” — and adding that, if they had wanted to list it on the stock exchange, they could have done so any time in the past 12 years, whether bank was in the title or not.
“There has been no discussion of becoming a listed company on the stock exchange,” he said.
This, it seemed, was the biggest concern — members liked the community ownership of a “building society”.
Directors said Hume would retain this, though as a customer-owned “bank”.
In fact, due to changes more than a decade ago to the Banking Act, Hume was already treated in the exact way as a bank and offered all the same services.
So why bother changing?
Mr Gilchrist, in his address, said it was primarily to do with brand recognition — people instantly knew what a bank did, while newcomers to an area might not associate that with a building society.
“Initially building society differentiated us from a bank and that seemed a benefit,” he said.
“However, the term building society is not really understood any more.”
He said while there was once 100 building societies in Australia, there were now just seven, three not using the term in their branding, and another had applied to become a bank.
“If we retain the word building society, it’s increasingly becoming an unknown descriptor, and Hume will end up in a very lonely place.”
It left just one more question from a woman in the audience.
“Would the directors decide to award themselves big fat million-dollar pay cheques?” she asked.
“We debated that, but Andrew (Saxby, chief executive officer) wouldn’t let us,” Mr Gilchrist quipped — before stating that directors’ fees would remain a matter for members to vote upon.