Annual Report 2013 Contents Snapshot 4 A Snapshot of Our Year 5 Our Achievements 6 Report from the Chair and Chief Executive Officer 8 Board of Directors’ 14 Executive Team 16 Corporate Governance 22 Directors’ Report Financial Reports 24 Contents 25 Auditor’s Independence Declaration and Directors’ Declaration 26 Independent Audit Report 27 Statements of Profit or Loss and Other Comprehensive Income 28 Statements of Financial Position 29 Statements of Changes in Equity 30 Statements of Cash Flows 31 Notes to the Financial Statements Sustainability Snapshot 76 Sustainability Snapshot 88 Glossary of Terms and Acronyms 2013 Annual General Meeting Members are reminded that the Annual General Meeting of the members of Beyond Bank Australia will be held at The Victoria Room, Hilton Adelaide, 233 Victoria Square, Adelaide, South Australia on Tuesday 26 November 2013 commencing at 6pm (ACDT). Registration will open at 5:30pm (ACDT). Environmental Sustainability Beyond Bank Australia cares about its community and is committed to environmental sustainability which is why this Annual Report has been printed on carbon neutral stocks that contain recycled content and are elemental chlorine free. 3 A Snapshot of our year We are proud of Beyond Bank Australia (a trading name meaningful community initiatives and Our Community Reward Account is a of Community CPS Australia Limited) is personalised professional business services. savings account that delivers benefits to our our achievements one of the largest and most respected members while allowing them to generously With our rebrand, our website and Internet 100% customer-owned banks in Australia. support local charities, not-for-profits and Banking facility also had an upgrade. With more than 200,000 members, community groups in their region. We announced our intention to pursue mutual bank status for Community CPS Australia, and consolidate our four Our new online improvements now 596 employees, and 49 branches allow for our most popular deposit Our Community Reward Account supports across Australia we have assets under brands into one single national brand. accounts - like our Term Deposit range over 290 not-for-profit organisations across management approaching $4b. and MonEsaver Account, to be opened Australia, and continues to grow. online without delay. We’ve also added A Successful Year Industry Recognition After more than 20 years, we relocated our Adelaide administration office and branch to larger, more energy functionality for some loan documents to This financial year has been successful for the be accepted using Internet Banking, saving We are proud to have been named ‘Credit Beyond Bank Australia Group with a recorded efficient premises at 100 Waymouth Street. time and paper. Union of the Year’ by Money magazine in profit of $23.2m. This will be reinvested back 2012. The title recognised our outstanding into our organisation to improve products and Fee Reductions services, competitive products and strong services for our members. The Beyond Bank Australia Group recorded a profit of $23.2m. We want our members to enjoy the best market performance. The result confirms our strong position in in banking products and services without A few months later we were delighted to the financial sector and is a testament to incurring any unnecessary costs. The new learn we had also been awarded the Mozo Our Fees & Charges review of our products and services will deliver $1.8m a year in savings to our members. our strategic direction. fees and charges structure was implemented Award for ‘Best Credit Union’. The Mozo The value that we return to our members, as to make them simpler, easier to understand award is nationally regarded as the most and to assist our members to bank fee free. comprehensive consumer report card on the measured by Canstar Cannex, has increased In March, we announced our partnership with Boundless Canberra to create the first space where children of all by 35% to $26m compared to if they were Our Fees & Charges review will deliver Australian financial services industry, and banking with a major bank. That’s an average savings to our members of $1.8m per year. receiving the top award was an exceptional abilities can safely play with their friends and family in a purpose built playground. of $142 each member is better off banking achievement. Office Move with Beyond Bank Australia. In early 2013 we were awarded Cannex After more than 20 years we relocated our Canstar 5 Stars for Outstanding Value for Merger furthers our growth plans We successfully merged with Alliance One Credit Union, welcoming an additional 5 new branches, 16,000 Adelaide administration office and branch to our Drive-On Car Loan, placing it in the top In June members of South Australian credit larger, more energy efficient premises at 100 5% of all car loan products surveyed. members, 53 staff and approximately $233m in assets to the Beyond Bank Australia Group. union Alliance One voted overwhelmingly Waymouth Street, Adelaide. This move was to merge with us. The merger with Alliance necessary to accommodate our growing team Banking Made Easy One has increased our members by 16,000, and to improve facilities for our members. Ongoing feedback from members has Eastwoods Wealth Management was awarded ‘Licensee Select SA Practice of the Year’ for the seventh time. our staff by 53 and our branch network to The modern branch was designed to meet contributed to making the latest version 49 across Australia, enabling us to better the changing needs of our membership. of our iPhone, iPad and Android apps a compete in a challenging financial market This includes a stronger focus on one-stop-shop for money management on Cannex reported our members were on average $142 better off banking with us than with one of the major banks – for the benefit of all members. providing wealth management advice and the go. The merger further cements our business encouraging involvement in our community We work with our members to ensure that’s an increase of 35% from last year, and equates to $26m in value back to our members. in an important area of regional South activities, along with a variety of features our apps meet their needs for mobile Australia. for member interactions including iPads for banking. From their feedback our latest self-service Internet Banking and free Wi-Fi. upgrade includes access to our newsletter, Our Community Reward Account, with the generous support of our members, supported 290 community groups, Beyond Bank Australia – enhanced product information, calculators, 100% customer-owned bank Supporting the Community and more banking functionalities like not-for-profits and local charities across Australia. In early 2013 we were excited to announce Our Community Program, which includes PIN-based, secure access to banking with a our intention to become a 100% customer- our Foundation has contributed more than personally selected four - eight digit code. We were awarded Cannex Canstar 5 Stars for Outstanding Value for our Drive On Car Loan, placing it in the top 5% owned bank under a new naming strategy $8m to our local communities, including The other way to bank designed to offer Australians a real more than $1.35m in grants and donations. Over the past year, we have remained true of all car loan products surveyed. alternative in the financial services sector. Our Community Volunteers Program to our values placing members at the centre Beyond Bank Australia offers the best of promotes volunteer roles in partnership of everything we do. We strive to provide both worlds – the same level of safety and with Volunteer SA&NT, Volunteer the very best for our members and for their Our customer satisfaction rating increased from 92% to 95%. security for our members’ savings combined ACT, Volunteering WA and the Hunter communities. Whether it’s through our with an unrivalled operating philosophy Volunteer Centre, matching members with customer-first principles, our competitive that puts customers before profits and volunteering vacancies. Over the last year banking offers, our community support, believes in prosperity for all. A model based we have seen the number of people register or our financial advice services, we’re We were named Australia’s Best Credit Union 2012 at the Mozo Awards in October, only four months on providing better banking solutions, on our website increase by almost 300%. committed to providing another way to bank. after receiving Money magazine’s Credit Union of the Year award. 4 5 Report from the Chair and CEO Report from the Chair and CEO From our operations throughout South Our financial planning and wealth The Beyond Bank Australia Foundation Our rediATMs now allow members to The years ahead will see a number of Australia, the Australian Capital Territory, management arm, Beyond Bank Australia was established in 2007 to provide grants change their PIN on their access card, and significant challenges to the financial Western Australia and New South Wales, Wealth Management (formerly Eastwoods to support like-minded local charities, not- our Visa Debit cards are now offered with sector, changes in the world’s economy, Beyond Bank Australia Group’s assets Wealth Management), Beyond Business & for-profits and community groups who also payWave functionality, to allow members consumer behaviour, technological under management have grown by 5% to Accounting Services and Beyond Taxation desire a better society for all Australians. to make purchases of up to $100 without advances, regulatory environment, $3.8b. Services (formerly Eastwoods Accounting the need for a signature or PIN. customer expectations and much more. Our Our community pillars are based on and Taxation) continues to justify its expectation is that this will drive significant This result has been achieved despite protecting the environment, supporting Our online developments now allow for our industry reputation. Beyond Bank Australia change in the financial services sector.