Peter Lock

Customers of Heritage Bank can now send and receive money from overseas more easily, thanks to a new online international payment service launched yesterday, powered by Convera.

Heritage can offer its members quicker and more convenient international payments via internet banking or the mobile app through an integrated API solution with Convera.

Heritage Bank CEO Peter Lock said: “With the explosion of online purchases now taking place across international market places, our new international payments service provides a seamless facility for our members.

“This fantastic new service allows our members to send and receive money internationally direct from our online and mobile banking system, in close to real time and around the clock no matter where they are.”

Today’s launch builds on a relationship that stretches back more than 20 years, with Heritage Bank one of Convera’s, formerly Western Union Business Solutions, longest-standing financial institution partners in Australia.

Sam Fitzpatrick, Regional Vice President and Head of APAC at Convera, said: “Helping our partners to provide greater access, convenience and choice when making domestic and cross-border payments is one of our key priorities.

“Our research forecasts that one-third of post-COVID economic recovery in Australia will come from modern digital, deliverable services which is why we’re committed to supporting and implementing the digital transformation of financial institutions and providing the tools and solutions to do so.

“As a leader within its field, Convera is best placed to support the digital evolution of financial institutions, such as Heritage Bank, helping the services industry to remain competitive, attract and retain customers, and continue to thrive.”

Heritage Bank has been on a digital transformation in recent years, improving its capabilities to provide online services to its members.

The new online international payment service takes this a significant step forward. Up until now, international payments could only be carried out in a branch and took up to 48 hours to complete.

“The new capabilities will be a huge step forward in simplicity and convenience for our members and enable them to make payments via a large number of currencies,” said Mr Lock.

“We’re absolutely delighted to continue our long association with Convera through this renewed partnership, and to deliver such a significant improvement in service to our members.”

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Peter Lock

Heritage Bank members can now consider fully underwritten life insurance thanks to a new partnership with Australia’s most awarded direct life insurer for the past three years running^[1], NobleOak Life.

The partnership will help Heritage members access information about life insurance options available to consider to protect the financial security of their families and loved ones.

The NobleOak life insurance product will initially be available from NobleOak by referral via Heritage’s online channels, and then later this year information will also be available inbranch also via a referral model.

Heritage Bank customers will be able to access a two-month free^[2] launch offer if they take out cover before 30 September 2022.

NobleOak CEO Anthony Brown, said the arrangement brought together two brands who prided themselves on putting the needs of their customers first.

“NobleOak Life puts customers at the heart of everything we do and we are delighted to have partnered with Heritage Bank, an organisation that shares our people centric approach,” Mr Brown said.

Heritage Bank CEO Peter Lock said informing members about this option to help protect the financial security of themselves and their families was an important addition to their existing product and information offerings.

“Heritage is proud to be one of Australia’s largest customer-owned financial institutions, and we are committed to supporting our members through the different stages of their life journey,” Mr Lock said.

“We look forward to working with NobleOak to enhance the authentic experiences and overall great value we provide to our members through life insurance.”

Heritage Bank’s broader insurance offering through arrangements with insurers currently includes building and contents, motor, landlord and business insurance.

Bringing an awareness of NobleOak’s FlexiCover Life Insurance to members complements Heritage Bank’s activities in the insurance space.

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[1] NobleOak awards information found at https://www.nobleoak.com.au/about-us/award-winning-life-insurance/.
[2] First Two Months Free Offer. Apply for one or more life insurance cover types available under FlexiCover before 30 September 2022 and if cover is issued, you’ll not start paying premiums until tow months after the commencement date of cover. This applies to any one or more available FlexiCover types you take out. Offer available one only per new customer and may not be used in conjunction with any other offer.

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The new initiative continues Heritage’s innovative commitment to employee welfare, which includes giving staff access to Elder Care Leave, Grandparents Leave, Family and Domestic Violence Leave, and Pandemic Leave.

Juggling the obligations of modern life can be mentally challenging for everyone.

Heritage is taking proactive steps to help its employees achieve a healthy work-life balance by providing them with free access to Unmind.

Unmind is a cultural change platform for mental health and wellbeing.

Accessible via an app, Unmind features expert tools that take a whole-person, whole organisation approach to mental health and wellbeing.

Much like you need to exercise and eat well to build physical fitness, Unmind offers science-backed digital tools to proactively measure, understand and improve mental wellbeing.

“Our team is the backbone of Heritage and our people first culture, so it’s important that we as an organisation support them to be their happiest and healthiest,” Heritage Chief People Officer Margo Dewar said.

“We think Heritage is a great place to work and our long standing record as an Employer of Choice supports that. We’re always looking for ways to make Heritage an even better place to work and I’m proud that we’re providing access to Unmind to all team members.

“We know the incredible tools in Unmind will perfectly complement the existing support structures we have in place for all of our staff, whether they work in our branches, the office or remotely.”

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Andrew Masci

Heritage Bank has cemented its commitment to socially conscious operations by appointing Andrew Masci to the newly created role of ESG and Sustainability Manager – the bank’s first dedicated ESG resource.

Mr Masci will drive the ongoing development of Heritage’s Environmental, Social and Governance (ESG) Framework including the delivery of improved governance and reporting of Heritage’s ESG performance and projects such as carbon neutral certification.

Mr Masci has more than 15 years’ experience across environmental management, corporate sustainability and ESG. More recently, he worked as Senior Environmental Sustainability Specialist at Airservices Australia where he helped develop and implement its Environmental Sustainability Strategy and Action Plan.

Heritage CEO Peter Lock welcomed Mr Masci’s appointment and highlighted the importance of ESG across Heritage’s operations moving forward.

“As a proudly customer-owned bank, acting responsibly and ethically has always been inherent in our activities,” Mr Lock said.

“Andrew Masci brings a wealth of knowledge and experience to this newly created ESG role. His appointment reinforces Heritage’s commitment to creating long-term value for our members by proactively working towards a more socially conscious and environmentally sustainable future.”

Mr Masci said he was looking forward to growing the capability and understanding of the importance of ESG to Heritage staff and members.

“As societal sentiment shifts to be more climate aware and focus on responsible banking, we have a greater need to be sustainable,” Mr Masci said.

“For the banking sector there has been a significant shift to grow and manage ESG risk, as well as identify and implement opportunities,” Mr Masci said.

“I have always believed that real change towards a Net-Zero future begins with the finance industry and being able to drive this change at Heritage was an opportunity I could not pass up.

“Through our commitment to incorporating ESG practices, Heritage has another opportunity to show members it is a responsible and trustworthy institution. This fits perfectly with the ethos of Heritage as a customer-owned bank.”

Mr Masci joined Heritage Bank this week.

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Michael Cameron

Heritage Bank and People’s Choice Credit Union, two of Australia’s leading customer-owned banking organisations, have announced they have entered into a non-binding agreement to explore a merger opportunity.

If a merger were to proceed, both organisations’ members would benefit from being part of one of Australia’s largest customer-owned banking organisations with approximately 700,000 members and $22 billion in total assets.

The proposed merger has a strong strategic rationale given the complementary capabilities and geographic footprint of both parties. By joining forces, the merged entity would be of a size and scale that would enable both organisations to deliver more for their members through enhanced products, services, digital capabilities and competitive pricing.

The combined entity would retain a mutual status with a committed member focus.

It would operate a national network of more than 90 branches and employ approximately 1,700 people. There would be no branch closures or non-executive redundancies as a result of the proposed merger.

People’s Choice Chairman, Michael Cameron, said, “Heritage and People’s Choice have been in discussions for several months. We recognise that we are both strong businesses, with approximately the same number of members, employees and assets so if a merger proceeds it would be a true merger of equals”.

Heritage Chairman, Kerry Betros, said, “Our members’ interests will be the most important consideration in any decision to merge and they will have the final say in any potential merger”.

“While we are both successful organisations, joining forces would provide us with the scale, profile and nationwide presence to redefine mutual banking for current and future members,” Heritage CEO, Peter Lock, said.

“People’s Choice and Heritage are both strong values-driven organisations that are committed to mutuality, their members, employees and the communities that they operate in,” People’s Choice CEO, Steve Laidlaw, said.

“Together, the merged entity would enable us to significantly enhance our ability to invest in a broader range of products and services as well as providing access to digital capabilities that will benefit our members,” Mr Lock and Mr Laidlaw said.

If the merger proceeded, both organisations would have equal Board representation and head offices would be retained in both Toowoomba and Adelaide.

A detailed and thorough due diligence process is now underway to assess the member benefits. If both organisations decide to proceed, the proposal will go to a member vote which would occur in early 2022.

Members of both organisations do not need to do anything at this stage. Should the merger proceed to a vote, further information will be provided to them to enable an informed decision with respect to the proposed merger.

Heritage and People’s Choice will provide further updates as required as the discussions progress.

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Peter Lock

Heritage Bank has announced it will team up with leading professional services organisation Ernst & Young Australia (EY) to deploy a new Open Banking solution that will unlock opportunities for consumers to explore greater competition in financial services.

Heritage will harness the EY team’s extensive consulting capabilities and cloudhosted EY Fuse Open Banking platform to deliver a safe, secure and easy-to-use solution.

Open Banking is a new initiative being introduced in the Australian banking landscape, allowing people to more easily share their banking data with other accredited entities.

The goal is to promote greater competition and create new services, products and experiences for Australians.

For instance, customers will be able to provide other financial institutions or accredited data recipients – like financial planners or budgeting apps – access to their personal data to help hunt for better deals on products or services.

Heritage Bank CEO Peter Lock said: “We’re looking forward to working with EY on our Open Banking solution.

They have unrivalled capabilities in this area and will help us deliver a first-class solution. “Open Banking provides some exciting opportunities for consumers so it’s crucial for the infrastructure behind the initiative to be rock solid.

“We want to reinforce to our members that our approach will keep their data secure and under their control. Tapping into EY’s extensive local and global knowledge in this space will be crucial in ensuring our solution is not only secure but also easy to use.”

EY Oceania Open Banking Leader Andy Parton said: “We’re very excited to be working with Heritage Bank on this important and exciting initiative to help them drive innovation and greater consumer choice through Open Banking.

“Heritage will not only comply with the Consumer Data Right (CDR) regulations but is well-positioned to capitalise on the opportunity to compete in this new world of Open Banking and, ultimately, better serve its members.

“I’m very proud that Heritage selected EY to collaborate with on their Open Banking journey and will have our technology at the heart of their solution.”

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Peter Lock

Heritage Bank has launched its new SME Support Loan that’s now available for small businesses needing working capital to help get through the impacts of the COVID-19 outbreak.

The SME Support Loan can provide up to a three-year unsecured loan of up to $250,000, with no repayments for the first six months, for eligible Small to Medium Enterprises (SMEs).

The loans are 50% guaranteed by the Federal Government, under its Coronavirus SME Guarantee Scheme.

The loans will be available to both Heritage’s existing business customers and new customers.

The features of Heritage’s SME Support Business Loan are as follows:

• Unsecured business loans from $20,000 to $250,000 on terms of up to 3 years;
• No repayments for the first six months (with interest capitalised),
• Principal and interest repayments will apply after the first six months;
• No establishment or account keeping fees;
• The loan has redraw capability, which means borrowers only pay interest on the drawn balance of the loan;
• The loan must be for current and upcoming cash flow needs (including working capital, liquidity and operating expenditure);
• Applications from both new and existing customers must be approved and made unconditional by 30 September 2020; and
• Available for Australian businesses with less than $50 million annual turnover.

CEO Peter Lock said Heritage Bank was very happy that it could now offer smaller businesses a helping hand to better cope with the financial impacts of COVID-19.

“Heritage has always been a bank that specialises in meeting the needs of small businesses. Our Business Banking team is focussed on the SME sector, so we understand how small businesses work and the challenges they face,” Mr Lock said.

“That’s why we’ve been so keen to offer this new SME Support Loan, which gives small businesses an extra option they can draw on to get through the cashflow issues that the COVID19 has created.

“We want to help these smaller operators meet the challenges they now face and come out of our current situation in a good position to thrive in future.”

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Peter Lock

Excellent growth in retail deposits was the highlight of a solid set of half-year financial results in a period that also saw an historic expansion of Heritage Bank’s branch network into Sydney, CEO Peter Lock said yesterday.

Mr Lock said retail deposits in the six months to 31 December 2019 totalled $357.02 million, an increase of 85% on the same period in 2018. This increase was driven by Heritage’s commitment to providing highly competitive interest rates on term deposits and savings accounts, as well the loyalty of its member base.

Loan approvals were up marginally, totalling $979.88 million for the six-month period, an increase of 1.7% on the same period the previous year. This was a good result after a sluggish start to the period.

After-tax profit was down slightly at $23.83 million, a decrease of 5.25% on the corresponding period in 2018. However this represented a solid increase on the $18.13 million after-tax profit in the immediately preceding six months to 30 June 2019.

The solid profit results also came during a period in which Heritage made a significant investment in opening its two new branches in Sydney, one at Castle Hill and the other at Parramatta. These branches are the first Heritage has opened outside Queensland in its 145-year history.

Mr Lock said the half-year results represented an excellent outcome for Heritage’s members.

“We have delivered a strong and balanced set of results for our members in a challenging market,” he said.

“The excellent growth in our retail deposits has had a positive impact on our margin. We’ve also continued to be very disciplined in managing our expenses and very effective in capital allocation decision-making.

“We’ve built good momentum in our lending in recent months, after a sluggish start to the period, and we’re looking to maintain that for the rest of the year.

“Our profit result is solid, balancing the need to generate capital to support future investments while still delivering great value on products and services for our members.”

Mr Lock said opening two branches in Sydney had involved a significant investment but had laid the platform for future growth outside Queensland.

“We opened new branches at Castle Hill in October last year and at Parramatta in December. They have performed extremely well in their first few months and the response from the people of those areas has been outstanding.

“Their success demonstrates the appeal of Heritage’s people-first philosophy and the willingness of banking consumers to embrace a Queensland-based brand that delivers the kind of products and services they are looking for.”

Chairman Mr Kerry Betros said the half-year results represented a continuation of the excellent financial stewardship that Heritage is known for.

Total consolidated assets increased to $10.254 billion at 31 December 2019, up from $10.008 billion at 30 June. Total loans under management reached $8.571 billion.

Heritage recorded a capital adequacy ratio of 14.78% and a liquidity ratio of 15.37% as at 31 December 2019, continuing the consistent upward trajectory for those metrics in recent years.

Mr Betros said he was proud that Heritage had maintained and strengthened its financial position, despite the tough conditions in the banking sector.

“Customer-owned banks like Heritage exist for the benefit of their members, and we continue to build the value of the asset that we manage on their behalf.

“Conditions in the banking market have been challenging in this period. Interest rates are at record lows, and competition has never been greater. Revelations at the Hayne Royal Commission have also dented the trust that people have in the major banks.

“However, the continued strong performance of Heritage shows that people value the customer-centric philosophy that drives our business.

“Heritage offers a modern banking service they can trust to provide better value and a more satisfying banking experience.

“We’re looking forward to building on the platform that our new branches in Sydney have provided to attract more customers to enjoy the advantages that come from banking with customer-owned organisations such as Heritage.”

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Peter Lock

Heritage Bank has welcomed the financial sector reforms outlined by Treasurer Josh Frydenberg but issued a reminder to the Government that competition must continue to be encouraged as one of the best ways to restore trust in the sector.

“As the largest mutual bank in Australia, and one that punches well above its weight, Heritage is fully supportive of the reform agenda and implementation roadmap issued by the Treasurer today.

“We note that the roadmap focuses on strengthening and expanding protection for consumers, with today’s outline concentrating on legislative responses designed to achieve ensure fair treatment and address conflicts of interest,” said Heritage CEO Peter Lock.

He said Heritage supports the roadmap’s plan to create a best interests duty for mortgage brokers, noting this group remains an important part of the bank’s successful national expansion.

“In our view, consumers are best served by having optimal access to great value and choice among providers in the financial services sector. The Government can underpin this approach by encouraging competition through mutuals such as Heritage who offer a genuine alternative,” Mr Lock said.

“In particular, consumers would be best served if Canberra continued to recognise that regulation should be applied with a lighter touch to those smaller operations who were not singled out in the Hayne Royal Commission.

“This will go a very long way to achieving greater competition and a level playing field in the bank sector. We will do our bit by offering great service, products and customer attention without the inherent conflict that listed banks face between the best interests of shareholders and customers.

Mr Lock said the Government’s ongoing commitment to reform in the financial sector has been a factor in its decision to continue with its national expansion which will include the opening of new branches in Sydney later this year, and in Melbourne over the next few years.

“Bucking the industry trend by opening bricks and mortar branches in very competitive markets not only reflects our confidence in the products and service we offer but also that policymakers and politicians will continue to focus on what is in the best interests of consumers.” Mr Lock said.

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Heritage will open one branch in the Castle Towers Shopping Centre in late October and another at Westfield Parramatta in December.

Heritage is Australia’s largest customer-owned bank. Based in the regional city of Toowoomba, Heritage has 59 branches across southern Queensland, $10 billion in total consolidated assets and 800 staff members.

Chief Executive Officer Peter Lock said the move into bricks and mortar in Sydney reflected Heritage’s desire to build its national footprint and its belief in the future of the branch concept.

“Heritage has been providing home loans to customers throughout Australia for 20 years via mortgage brokers, as well as through our Queensland branches. We already have thousands of customers in Sydney, and we’ve had an office in Parramatta for many years to support our broker team,” he said.

“That means we’re not totally new to Sydney and we do understand the market.

“Opening branches in Sydney reflects our desire to increase our presence nationally and our belief that the Heritage brand can resonate strongly with consumers wherever they live.

“We’re excited to be bucking the industry trend by opening new branches. I firmly believe that talk about the imminent demise of physical branches is exaggerated. People still want to come into a branch and talk face-to-face with an expert about the biggest financial commitments they will make in their lives, so branches will be around for many years to come.”

As well as new branches, Mr Lock said Heritage was also forging ahead with improvements to its digital capabilities, and is a leader in Australia in the field of pre-paid cards, as well as an early innovator in virtual payment technologies. Heritage is the largest issuer of pre-paid cards in Australia, and in particular issues around 50% of travel cards in the country, from its base in Toowoomba.

“Companies including Qantas, Optus, Australia Post and MasterCard have partnered with Heritage to deliver a range of products that use pre-paid card and virtual payment technologies,” Mr Lock said.

“We’re a bank that punches well above our weight in the sector.”

Mr Lock said Heritage was also excited to be taking up the fight to the big banks in the post Hayne Royal Commission environment.

“There’s been repeated calls for more competition in the banking industry, to help curb some of the profit-hungry excesses the Royal Commission uncovered,” he said.

“Well, Heritage is doing just that. As a customer-owned bank, we’re all about providing great value to customers, not about trying to extract the maximum amount of profit out of them like the big banks.

“We know it’s a huge challenge, given the size of the big banks and the competitiveness of the Sydney market. But we firmly believe that the people-first focus Heritage offers will be attractive to people looking for an alternative to the profit driven banks they’ve been dealing with.”

Heritage carried out extensive research before choosing Castle Hill and Parramatta as the locations for its first Sydney branches.

Mr Lock said the Western and North-Western areas of Sydney were demographically suited to Heritage’s product offerings and philosophy.

“We’re about providing personalised service and great value, whether that’s a young family trying to get the best deal on their first home or a retiree looking to maximise the return on their savings.

“It’s no accident that we took out Roy Morgan’s Bank of the Year award for Customer Satisfaction earlier this year, ahead of all other banks in the country.

“We offer something special that we hope many more people will discover through our new branches in Sydney.”

The two new branches in Sydney are part of a longer term strategy for Heritage to open more branches in the Western Sydney area, as well as in suitable growth corridors in the Melbourne metropolitan area.

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