Building better communities by oscar cortez

Building better communities Bendigoâ&#x20AC;&#x2122;s Community BankÂŽ story

pledge

feasibility

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www.bendigobank.com.au

Together we can build a better community. Whether revitalising a local shopping strip, directing profits to community projects or supporting schools, charities and sporting clubs, Community Bank® branches around Australia continue to prove that many hands make light work. And just by doing something as simple as your banking, the same things can happen in your community. With a Community Bank® branch you’ll have a real say in your community’s future. In the kind of banking services you receive and where the proceeds are directed. In this booklet we’ll share with you the Community Bank® story, its rewards and benefits, and the process you’ll go through to establish a branch in your community. You’ll be inspired by those who’ve come before you and all they achieved with their vision and co-operation.

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More than just banking. Providing communities with a sustainable future.

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Bendigo Bank. Australia’s community focussed bank.

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The ingredients for a sustainable community.

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If you have the will, we have the way.

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Success stories.

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The benefits are flowing.

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Four steps to a Community Bank® branch.

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Community Bank® branches. How they work.

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Rupanyup and Minyip. Our Community Bank® branch pioneers.

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Your questions answered.

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Bendigo Bank in the community. It’s about more than just banking.

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Inside

More than just banking. Providing communities with a sustainable future. There is an overarching philosophy behind much of the work carried out by Bendigo Bank - in its day-today banking activities and in the work it does with Australian communities on activities unrelated to banking’. In particular, our Community Bank® initiative continues to resonate with customers and their communities a decade after it was first introduced. Community Bank® branches provide communities with more than just quality banking services – they deliver employment opportunities for local people, keep local capital in the community, are a local investment option for shareholders and provide a source of revenue for important community projects determined by the local community. The Community Bank®story first started in 1998 when Bendigo Bank partnered with the Victorian communities, Rupanyup and Minyip, to pilot a return to banking services in their towns. To date, the entire Community Bank® network has returned more than $90 million dollars to support local community groups and projects right across Australia. Today, Rupanyup and Minyip have been joined by more than 295 branches from Alice Springs in the Northern Territory, Augusta in the West and Dover in Tasmania, to form one of the fastest growing banking networks – community banking. When it first started, Community Bank®was eagerly sought out by many rural communities looking for a sustainable solution to branch banking that could be quickly implemented. The essence of the Community Bank® concept is in sharing the responsibilities and rewards between the community and our bank.

Communities across Australia have accepted the responsibility of providing start-up capital and making their branches successful – and are increasingly reaping rewards that aren’t just limited to banking. In the early days, most attention was focussed on how the Community Bank® concept has secured face-toface banking services for local communities. Of course this is important, but it ignores the tremendous social and economic contributions being made by Community Bank® branches as more capital is retained locally, more commercial activity is stimulated and the confidence of local community leaders increases. We continue to witness the tangible results produced by the Community Bank® model – not just in rural areas, but in our regional centres and the suburbs of our capital cities. Bendigo Bank continues to participate in the development of the Community Bank® model with an enormous sense of pride. We are indeed fortunate to partner with many vibrant and successful communities. I cannot think of another company that is so openly welcomed into the communities it serves. It is an honour we value highly and jealously guard, not only for the pleasure it gives us as individuals but because we know that the future of our company depends on the relationships we build with our communities. I wish you every success in your venture to become a Community Bank® community.

Mike Hirst Group Managing Director

‘We know that the future of our company depends on the relationships we build with our communities.’ 2

Bendigo Bank. Australia’s community focussed bank. Successful customers and successful communities create a successful organisation – in that order. It sounds like a glib marketing statement, but in fact this core belief has underpinned Bendigo Bank’s strategy throughout our history. Our company first started in 1858 with the aim of creating a sustainable community. Gold had been discovered in Bendigo five years earlier. By 1858, tens of thousands of diggers were rapidly exhausting the easy alluvial gold. Two things became obvious – deep mining was the future and a committed workforce would be required to pursue it.

It’s a different approach to creating shareholder wealth and business success. In asking, ‘What’s good for our company?’ we first ask, ‘What’s good for our customers and communities?’ We focus on helping customers achieve their financial goals and on improving the prospects of the communities we serve. If we do this well, our own success must automatically follow, since we will be banking successful people in prosperous communities. By being more valuable than simply the products and services we provide, Bendigo Bank is more capable of making a difference and of creating value for all stakeholders.

To convert transient diggers into permanent residents required local capital to build homes, churches and public facilities. In response, local businessmen started a company limited by shares – Bendigo Building Society. Together they established a simple but highly effective business strategy – sustainable long-term profitability could only be achieved through contributing to the economic and social well-being of the community that supported their company. It sounds familiar because we remain convinced of that philosophy today.

New ambulance for Darkan community – WA The town of Darkan in Western Australia have received an ambulance thanks to a $20,000 contribution from Collie & District Community Bank® Branch. The St John Ambulance sub-branch in Darken had been raising funds for a new ambulance for a number of years and required a major funding boost to get the project over the line. The new ambulance will service the communities of West Arthur and Collie. Celebrating its ten year anniversary this year, Collie & District Community Bank® Branch has returned more than $1 million to the Collie community during this time.

Bus lifts students’ spirits – VIC Canterbury and Surrey Hills Community Bank® branches have contributed $55,000 towards purchasing a bus for the Belmore School. The Belmore School is a special school for students aged between five and 18 who have a physical disability or health impairment. The new bus has a lift mechanism and wheelchair restraints. These features will make assisting students on and off the bus a much simpler process.

OzHarvest lends a helping hand - NSW Canberra-based charity OzHarvest has added a new van to their fleet thanks to a $50,000 donation from Calwell and Wanniassa Community Bank® branches. Oz Harvest rescues excess food from restaurants, shops and businesses that would otherwise be discarded and then distributes the food to charities supporting those struggling to provide food for themselves or their families.

Kindergarten saved from closure – QLD In Mundubbera the kindergarten has been saved from closure thanks to a $5,000 grant from Mundubbera Community Bank® Branch. The $5,000 grant will go towards restumping the kindergarten, which was in danger of being closed without the vital upgrades. Since opening in November 2006, the branch has returned more than $82,000 to the Mundubbera community.

The ingredients for a sustainable community.

Mobilise, involve and engage your community as a whole

Use technology to open up new markets

Use quality information in your decision making

Develop capacity to use a combined buying base

Better use your community’s entire capital base – human, intellectual and financial

Create an environment for ongoing learning and skills development

Reduce the capital drain from your district

Embrace the knowledge and enthusiasm of young people

If you have the will, we have the way. When the Community Bank® model was established, few people thought local communities could influence banks – now more than 295 communities around Australia are running their own Community Bank® branches. The Community Bank®concept was introduced in 1998 in response to demand for face-to-face banking services from communities disenfranchised by bank branch closures during the 1990s. The basic process is that communities form local publicly owned companies which enter into a commercial franchise to run a Bendigo Bank branch.

the community via grants, sponsorships and dividends to local shareholders. Each branch uses Bendigo Bank’s name, branding, policies and operating systems. The community company manages the branch on behalf of the bank. All customer transactions are conducted with Bendigo Bank. To many, Community Bank® is generally perceived to be a ‘replacement banking service’. In fact, it is much more than this. As a solution to banking needs, it requires communities to unite behind a common goal.

Bendigo Bank provides the banking infrastructure and licensing, while the community runs the branch operation and generates customer support.

It promotes collaboration and commitment. It requires the raising of capital and the development of local structures and skills to run a publicly owned company. It retains and grows local capital for local use.

Together Bendigo Bank and the local community share the revenue, with local surpluses available for reinvestment in

In short, it helps build stronger, more sustainable communities.

To be successful you’ll be seeking to:

Secure branch banking services for your community

Help your community better manage (and gain a return on) locally generated capital

You want your community to share in the revenue generated from its banking activities

The Community Bank® initiative provides a powerful incentive for members of your community to bank locally – because the more of their banking they do with their Community Bank® branch, the greater the returns.

Success stories ‘Lang Lang wasn’t dying it was in a state of rigor mortis.’ This statement is often used by community leader and Community Bank® Branch Chairman Max Papley to describe the state of his home town. Today, Max is proud to say that this is no longer the case. His community is thriving. Lang Lang Community Bank® Branch has had a profound effect on the southern Victorian town. Not only has it returned a full banking service to town, it is meeting shareholder expectations in terms of dividends and providing much-needed financial support for community projects. The kids of Lang Lang Primary School are now enjoying a safe new path from the schoolyard to the Aboretum Reserve. Construction of the path was funded, in part, by a $7,500 Community Bank® branch donation. As a finishing touch, more than 700 trees were planted by the kids themselves. The community company also developed a Business Centre which has attracted a lawyer, accountant, town planner, local MP and a licensed surveyor back to the town. They have since worked with nearby communities to open branches in Pearcedale, Koo Wee Rup, Tooradin and Narre Warren South.

In 2000 Bendigo Bank was a relative newcomer to the Sydney financial market, and more specifically to Clovelly - which meant the local volunteer committee needed to work twice as hard to build a profile for their Community Bank® project. But their hard work paid off, with Clovelly residents and businesses embracing the return to branch banking in their suburb. The last full-time banking service had left Clovelly in 1998, leading to a decrease in business and morale in the beachside suburb. The last straw, and the catalyst for the Community Bank® campaign, was the removal of the final ATM. Clovelly Community Bank® Branch opened its doors in 2002 and has since become an important part of the local community. The branch offers much more than banking services – locals are greeted by name and the branch is now returning dividends to shareholders and much-needed financial support for community initiatives. Thanks to the branch, local Grade Six students received the Kidsmart Handbook, designed to help them deal with the issues faced by young people in Sydney on a daily basis. Other community projects to benefit from the success of Clovelly Community Bank® Branch include the Safe Room, part of the Waverley Domestic Violence Assistance Scheme, the annual Coogee Family Fun and Arts Festival and the Randwick Community Organic Garden. 8 6

The benefits are flowing. Local community shareholders have received dividends totalling more than $30 million. Local boards have paid out more than $90 million in sponsorship, donations and community contributions. More than 1,900 Australians are now directors of the locally owned public companies that run Community Bank® branches. They are developing the skills needed to run enterprises which will further improve their communities’ prospects. More than 1,300 jobs have been created in local branches. Many of the businesses in the towns and suburbs where Community Bank® branches open experience an increase in business takings. These benefits will grow and are sustainable as long as customers bank at their Community Bank® branch. For these communities, it is the tip of the iceberg in terms of contributions they will make to their individual towns, suburbs and regional cities.

Community Bank® branches provide communities with more than just quality banking services – they deliver employment opportunities for local people, keep local capital in the community, are a local investment option for shareholders and provide a source of income for community projects deemed important at a local level. This tremendous social and economic contribution continues to grow with the new Community Bank® branches that open their doors each year.

Figures relevant 31 December 2012

Four steps to a Community Bank® branch.

pledge

The first of four steps before opening a Community Bank® branch. This is the opportunity for members of the community to indicate their support as a future shareholder and customer. Without enough community support, the branch will not go ahead.

feasibility

prospectus

Once they’ve pledged their support, community members will receive a feasibility survey which helps the local committee determine if their community is strong enough and if there is enough banking business to open your Community Bank® branch.

During the prospectus phase community members will formalise their support for their local Community Bank® branch by purchasing shares in your community company. As a shareholder, you will help determine where branch profits are allocated.

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Step four, the most important and exciting of all, will see the doors open on your local Community Bank® branch. Local residents and businesses commence an ongoing relationship with the branch.

Community Bank® branches. How they work. 1

A locally-based company, formed to represent the local community, acquires a franchise from Bendigo Bank to run a banking branch. The community company also secures the premises and purchases branch fittings and systems. Working capital is the responsibility of the local company. Each branch is designed to suit local requirements, with Bendigo Bank overseeing the fit-out and branding of the branch. Every Community Bank® branch carries Bendigo Bank signage and the ‘Bendigo look’ to ensure consistency across the country. Bendigo Bank provides the coverage of its banking licence, a full range of banking products and other financial services, staff training and ongoing support. Hours of operation are determined by Bendigo Bank following consultation with the local company.

The local board’s role is to run the company, while Bendigo Bank provides the banking expertise and banking licence. One of the most important functions carried out by local board members is networking in the local community to promote the benefits of the Community Bank® branch.

Community Bank®customers hold product and services issued by Bendigo Bank. Bendigo Bank meets Australian Prudential Regulation Authoritiy standards. Bendigo Bank also makes all credit decisions and protects individual client privacy.

Customers’ banking details are held in the strictest confidence between the customer and the Bank branch staff. Directors of the local community company have no access to individual customer records.

Bendigo Bank and the community company share the revenue of the local branch. The local company is responsible for paying branch running costs.

Bendigo Bank supports the bank brand, product development, systems, the acquisition of additional services and provides Community Bank® branches with operational requirements such as marketing support, training and stationery.

When the local company begins to make a regular operating surplus, and after the payment of branch running costs and Bendigo Bank’s entitlement to revenue, the remaining revenue is available to be reinvested back into the community via dividends to shareholders and support for community projects.

As with any commercial venture, there are risks involved. Your community and supporters will be encouraged to source independent legal and financial advice.

Rupanyup and Minyip. Our Community Bank® branch pioneers. Australia’s first Community Bank® branches were opened in the Victorian wheatbelt towns of Rupanyup and Minyip in June 1998. Start-up contributions came from families representing more than 700 of the district’s combined population of around 1,100 people. And this support continued once the doors opened, with the combined branches reaching their 12 month business target in seven months. And even though the district’s crops were devastated by the worst frost in memory in the late spring of 1998, the branches continued to thrive. At the first birthday celebrations, inaugural chairman, David Matthews, was able to announce that the branches had started returning monthly surpluses to the community. ‘Our achievements to date have been deeply gratifying. Our business volumes are comfortably ahead of budget, we have already employed extra staff, we have expanded our opening hours and we are now beginning to see profits flow back to the community.’ The Rupanyup and Minyip communities went on to renew their relationship with Bendigo Bank after 10 years and continue to operate successfully today. ‘The renewal of our relationship ensures that our communities, pioneers of the Community Bank® model, can secure branch banking for a further 10 years,’ chairman, Stewart Petering, said at the 10th birthday celebrations. ‘We are extremely proud of the achievements of our two towns which banded together to support this unique banking model from day one.’ It succeeded to the point where approximately $500,000 has been made available for local community projects. According to Managing Director, Mike Hirst Bendigo and Adelaide Bank could not have asked for two better communities to pilot this innovative banking model. ‘I congratulate the board of directors, staff and the residents of Rupanyup and Minyip on their success. You have committed yourselves to the return of banking services and set the scene for many communities to follow your lead,’ Mr Hirst said. 10

Your questions answered. What is a Community Bank® branch? The Community Bank®concept was developed by Bendigo Bank to provide communities with the certainty that banking services and access to funding brings. The basic process is that communities form local publicly owned companies which enter into a commercial franchise to run a Bendigo Bank branch. Bendigo Bank provides the banking infrastructure and licensing, while the community runs the branch operation and generates customer support in the area. Together Bendigo Bank and the local community share the revenue, with local surpluses available for reinvestment in the community via grants, sponsorships and dividends to local shareholders. What form of investment is a Community Bank® branch? A local entity forms a public company to represent the local community, which raises investment funds locally and acquires the right to run a banking branch. Does a Community Bank® branch offer full banking services? Just like any branch of Bendigo Bank, Community Bank® branches offer a full range of banking and financial services, including: > Savings and transaction accounts > Home loans and personal loans > Credit cards > Financial planning > Insurance > Business Banking > Phone and Internet banking How long does it take for a Community Bank® branch to be profitable? This varies from site to site. Some branches reach profit in the first 2–3 years, while others take longer. Support from the local community, especially in the first six months, means the branch will become profitable sooner. Can I own shares in my Community Bank® branch? If your community decides to establish a Community Bank® branch, you will be able to purchase shares in the local company formed to operate the Community Bank® branch of Bendigo Bank. These are shares in the locally-owned company, not Bendigo Bank.

How do I purchase my shares? Before forming the company, your local banking committee seeks pledges of financial support from the community. By making such a pledge, you will be indicating your interest in becoming a shareholder of the local company. Once the committee decides to open a Community Bank® branch it will form a company which will issue a prospectus. Your application for shares will be made via this prospectus. How many shares can I buy? Shares are usually initially offered at $1.00 per share. Typically local companies seek to issue between 700,000 and 800,000 shares. Applications should be for a minimum of 500 shares, or a greater number in multiples of 100 up to a maximum of 20,000 shares. The prospectus will provide further detail. It should be noted that no single shareholder can own more than 10% of the company. Do my shares entitle me to a say in the company? Again, the prospectus will detail your voting rights in full. However, generally each shareholder is entitled to one vote regardless of the number of shares held. Will I receive a dividend? The payment of dividends is decided by the directors of the community company. The purpose of the Company is not simply for shareholder return. Subject to profitability, Directors may decide to use Company funds for community or charitable projects and/or in payment of dividends to shareholders. Can I sell my shares? Generally ordinary shares are transferable. However, the directors may refuse to register a transfer of shares in certain circumstances. For example, the directors may refuse to register a transfer that would result in a shareholder holding too large a percentage of the company. What happens if the community company fails? Shareholder liability is usually limited to the value of their shares. This is explained fully in the prospectus. The community itself controls the destiny of its own branch. Right from the start, the decision to open a branch is made only after a survey of the local community which identifies an individual’s banking intentions. The survey results form the basis of the business plan. As long as people follow through and support the branch as indicated, there is no reason to suppose the business will not be successful.

Bendigo Bank in the community. It’s about more than just banking. Community Bank® branches have been successful not because they offer competitive home loans, credit cards, business banking and financial planning – although, of course, they do. They’ve been successful, and struck a chord with people all over Australia, because they: > Assist communities to deliver their own quality banking service > Provide employment opportunities for local people > Keep local capital in the community > And provide the means to financially support community initiatives for the long term The ability to retain local capital, or attract it to the communities where branches are located, is the most important part of the Community Bank® concept – and the cornerstone on which Bendigo Bank continues to build its business strategy. In addition to the Community Bank® concept, Bendigo Bank has extended its strategy to include community solutions as diverse as telecommunications, bio-diesel, Generation Green™ and the Community Enterprise™ Foundation – along with initiatives such as Lead On. Each of these solutions have been designed to provide communities with the capacity to build regular income for community needs and initiatives, to retain control over local capital and to become more self-sustaining.

Community Enterprise™ Foundation Launched in 2005, the philanthropic arm of Bendigo Bank enjoys Deductible Gift Recipient status and can accept tax-deductible donations from individuals, business and governments for distribution to charities. For Community Bank® branches, the Foundation can help establish a management account ideal for administering community grants and other giving programs.

Lead On Designed to build the competencies and confidence of future community leaders, the first Lead On program was launched in 1999 - and now operates around Australia. Lead On aims to connect young people with their communities through real life projects in partnership with the local business, education and community sectors.

Generation Green™ Generation Green™ offers an exciting range of solutions that make it possible for communities to make a practical difference to the environment at a local level. Community Bank® branches and their customers can choose to offset carbon emissions – whilst a selection of green loans are making the creation of a sustainable future more achievable.

Achieving your objectives with the Bendigo Community initiative identified

Community engages with Bendigo Bank

Community Bank® branch

Environment & Sustainability

Community Enterprise™ Foundation

Lead On

Generation Green

Selected solutions provide ongoing income stream for the community

Contact our Community Bank速 team T 1300 361 911 E community.bank@bendigobank.com.au W www.bendigobank.com.au M Bendigo Bank The Bendigo Centre PO Box 480 BENDIGO VIC 3552

T 1300 361 911 E community.bank@ bendigobank.com.au W www.bendigobank.com.au M Bendigo Bank The Bendigo Centre PO Box 480 BENDIGO VIC 3552

Bendigo and Adelaide Bank Limited, ABN 11 068 049 178, AFSL 237879. (S43448) (01/13) BEN50MB160