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Customer-Owned Banking In Australia: From Credit Union To Mutual Bank

Author

Listed:
  • Ameeta JAIN
  • Monica KENELEY
  • Dianne THOMSON

Abstract

Since the 1990s financial sector regulation in Australia has treated credit unions and building societies the same as banks under the designated title of authorized depository institutions. This allows credit unions to choose between different organizational structures: cooperative; convert to customer-owned banks or to demutualize. This article utilizes semi-structured interviews to analyse the key motivations for organizational change. It examines a number of credit unions and their conversion experience to customer-owned banks. It finds that adaptation of the credit union model was necessary to change customer perceptions, ensure future growth in the customer base and assets, and facilitate access to capital raisings with the credit rating of a bank. Despite this change customer-owned banks retain the core principals of mutuality.

Suggested Citation

  • Ameeta JAIN & Monica KENELEY & Dianne THOMSON, 2015. "Customer-Owned Banking In Australia: From Credit Union To Mutual Bank," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(3), pages 465-478, September.
    • Handle: RePEc:bla:annpce:v:86:y:2015:i:3:p:465-478
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    File URL: http://hdl.handle.net/10.1111/apce.12062
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    References listed on IDEAS

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    1. Johnston Birchall & Richard Simmons, 2004. "What Motivates Members to Participate in Co‐operative and Mutual Businesses?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 75(3), pages 465-495, September.
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    3. Kevin DAVIS, 2007. "Australian Credit Unions And The Demutualization Agenda," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 78(2), pages 277-300, June.
    4. Johnston Birchall, 2013. "Finance in an Age of Austerity," Books, Edward Elgar Publishing, number 15074.
    5. Lamm-Tennant, Joan & Starks, Laura T, 1993. "Stock versus Mutual Ownership Structures: The Risk Implications," The Journal of Business, University of Chicago Press, vol. 66(1), pages 29-46, January.
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    7. Kevin Davis, 1997. "Can Credit Unions Survive in Australia?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 4(3), pages 317-327.
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