ANNUAL REPORT 2019 2 CONTENTS Chair Message ...............................................................4 CEO Message ................................................................5 Timeline .........................................................................6 FY19 Highlights .............................................................8 Community ....................................................................10 Board of Directors .........................................................12 Executive Team .............................................................14 Corporate Governance Statement ...............................16 Directors’ Report ...........................................................21 Auditors’ Report ............................................................24 Financial Statements .....................................................25 On behalf of the Board, I am pleased BankVic acknowledges and welcomes to present the 2019 Annual Report. diverse perspectives. We currently have an equal gender ratio in When we began in 1974 as the Police our senior leadership (Board and Association Credit Co-op, our purpose Executives) and are excited to be was to help police officers get a better working towards broadening our deal from their bank. Fast forward understanding of true diversity 45 years and this is only going from and inclusion. strength to strength; we have been strategically reconnecting with our As we continue to grow, it is important heartland in Police and establishing to reiterate that all profits from strong relationships with our bonds in BankVic’s success are channeled Health and Emergency Services. back to members. This is through our competitive product offerings, high This year, BankVic reached milestones standard of personalised service and that go beyond the financial industry supporting organisations that support standard. We saw increases in our members. Chair membership and above market growth in home lending that helped Our strategy moving forward is us achieve a record high asset position simple; to provide great products and Message of over $2 Billion. We also received services, to increase our membership the bank’s first ever Credit Rating in the health and emergency services Delivering on our and welcomed two Board Appointed sector, to be a genuine partner to our Directors in Michael Liu and Faith bond agencies and to ensure that vision to be the most Page strengthening the overall our growth is financially sound and trusted financial experience, expertise and diversity of sustainable. To our wonderful and the Board. committed staff, we want to remain an institution for our employer of choice. members, is our The financial services landscape has changed dramatically over the last It has been a wonderful privilege to priority. 12 months as a result of the Banking serve my first year as Chair at BankVic. Royal Commission. BankVic has I would like to thank my fellow closely followed these developments Directors, our CEO Anthony De Fazio and will continue to ensure our and the Executive Team for all your members have confidence that support in what has been, another BankVic are a trustworthy, strong and successful year. sustainable choice to guide them towards the financial future their hard And to our valued members, we exist work deserves. to serve you. Without you, there is no BankVic, so thank you for continuing Looking forward, we recognise to allow us to be part of the significance that mental health your community. and wellbeing plays in the lives of our Police, Health and Emergency Services members. Research shows that financial issues and mental health problems often go hand-in-hand. BankVic are committed to continuing Marianne Luttick to work with our agency partners who Chair are already working hard in this area, to support their efforts. 4 | BANKVIC // ANNUAL REPORT 2019 At BankVic, we serve those who As always, we have loved the serve the community and we are opportunities to celebrate our committed to continually improving communities. We are proud to have the banking experience of our committed to our partnerships with members. I am proud to share Victoria Police Legacy, the Police the results of this commitment for Association Victoria, Blue Ribbon 30 June 2019 in what has been a Foundation, Emergency Services successful and rewarding year. Foundation, and to have sponsored the inaugural Hawthorn Football We officially reached $2 billion in Club Emergency Services match, assets in February and achieved celebrating the Victorian emergency 16% growth in both our lending and services community. We continued to deposit portfolios for the year. In support our members’ organisations January, BankVic obtained its first and have now contributed $2.7 ever Credit Rating, providing access million in donations and sponsorships to more diverse and cost-effective since 2010; you can read more about sources of funding. We continued our community partnerships further in CEO to champion the financial wellbeing this Annual Report. and security of our members, helping over 200 members move into their Our annual member satisfaction Message first home, with an additional 1,200 survey reflected our ongoing members purchasing, renovating and dedication and support the BankVic Serving those who refinancing homes. team has for its members. With an overall score of 96% (95% in 2018) we serve the community. The focus on our digital are proud to contribute to delivering transformation continued, improving outstanding service. Our people are our technology capability to enable our greatest asset and the driving us to service our members in the force of BankVic, and I thank each safest and fastest possible way. We member of our team for their efforts. made payment options easier and more convenient for our members, I thank the BankVic Board of Directors with the launch of Apple Pay and for the guidance and support they Google Pay in April and May have shown throughout the year. respectively, enabling members to Finally, to our members, thank you for pay for goods and services using all your ongoing support, we would their mobile devices. We also made not be where we are without you and banking easier by simplifying our we look forward to the coming year transaction account offering to one with great enthusiasm. with all the best features such as no account keeping fees, no minimum deposit requirements and no ATM fees at the major 4 banks and overseas ATMs. Anthony De Fazio Chief Executive Officer | 5 BankVic was founded as Police Association Credit Co-op in 1974 by police, for police. Today, BankVic represents Victorian police, health, emergency and public service employees, as well as their families and friends. In fact, there are now over 113,000 BankVic members and we welcomed over 6,000 new members in FY19 alone. We are 100% member-owned and we offer a different way of banking, where all our profits are reinvested to provide members with better value banking and to support our community. We want our members to feel supported. Their future is our future and we couldn’t be more proud to be part of it. 1974Our story begins with 1982 1992 1998 2009 2010 2014 2016 2018 the opening of our first Over the phone State and federal Monash Medical e-Statements Mobile banking Awarded Canstar 100,000 members! Real-time payments office a storeroom in banking launches public service staff Centre branch introduced launches Customer Owned and First Home Buyer the Police Association eligible to join opens Bank of the Year Package introduced building 1979 1980 1987 1995 1999 2001 2013 2015 2017 Country Fire First branch opens at Police Credit World Trade 50,000 Internet banking Name changed New head office 2 new branches opened - 2019Inaugural credit rating Association the Police Academy, Visa Card Centre branch members! launches from Police Credit in Spring St opens Royal Children’s Hospital (CFA) members Glen Waverley introduced opens Co-op to BankVic and Sunshine Hospital able to join $2 inBillion assets Digital wallet 6 | BANKVIC // ANNUAL REPORT 2019 1974Our story begins with 1982 1992 1998 2009 2010 2014 2016 2018 the opening of our first Over the phone State and federal Monash Medical e-Statements Mobile banking Awarded Canstar 100,000 members! Real-time payments office a storeroom in banking launches public service staff Centre branch introduced launches Customer Owned and First Home Buyer the Police Association eligible to join opens Bank of the Year Package introduced building 1979 1980 1987 1995 1999 2001 2013 2015 2017 Country Fire First branch opens at Police Credit World Trade 50,000 Internet banking Name changed New head office 2 new branches opened - 2019Inaugural credit rating Association the Police Academy, Visa Card Centre branch members! launches from Police Credit in Spring St opens Royal Children’s Hospital (CFA) members Glen Waverley introduced opens Co-op to BankVic and Sunshine Hospital able to join $2 inBillion assets Digital wallet | 7 FY19 Highlights 113,541 Digital Wallet Total members Launched Digital Wallet secure payments with Apple Pay* and Google Pay** $2 Billion New Transaction In assets Account All our best features rolled into one simple account 96% 80 Partner Events Member satisfaction Supported $2.7 Million 20% of First Home Community donations and sponsorships Buyer Loans Since 2010 Taken up by BankVic members who joined as children All numbers are current as at 30 June 2019. *For a list of compatible Apple Pay devices, see support.apple.com/en-au/km207105.