Community franchise banking

February 18 2015


  • Sam Moore & Robert Musgrove (Bendigo Bank)

  • Sue Lewis (Financial Services Consumer Panel0

  • Don Kehoe (London Capital Credit Union)


Evangelising for new banking models has become something of a cottage industry. Whether it is the brave new world of disintermediation and unbundling through technology, or a return to community banking through credit unions, the demand for alternatives has been growing ever since the financial crisis.

One approach, however, that hasn’t received much attention in the UK (and perhaps anywhere else outside of Australia) is the “community franchise” model developed by Bendigo and Adelaide Bank (BEN). In a nutshell, BEN – a publicly listed bank with a market cap of A$6bn – partners with communities to set up local bank branches (what they call “CommunityBank” branches). Much of the legwork must be done by the local community – building the business case for the branch, putting up capital, and providing volunteer directors to run the show. In return, HQ offers its banking licence, capital, guidance and products.

The results have been impressive: 307 CommunityBank branches have been created since 1997 (90 in communities where there is no other branch), encompassing 72,000 local shareholders and 1,900 volunteer directors. And a large slice of the profits generated by these branches are re-invested back in the community - A$135m so far in community grants, plus A$37m in dividends to local shareholders.

So, what can the UK learn from the BEN approach? Would it be a good thing were a similar bank to take off here – and is there any chance of that happening? To guide us through the issues, we are delighted to welcome:

  • Sam Moore and Robert Musgrove, who are visiting the UK in their capacity as leaders of community banking at BEN – and who have kindly agreed to stop by and explain the community franchise model to us in greater detail;
  • Sue Lewis, chairman of the Financial Services Consumer Panel;
  • Don Kehoe, a director of the London Capital Credit Union, the credit union for the City of London; and
  • Christine Allison, a member of the Archbishop’s Task Group on Responsible Credit and Savings, and the CSFI’s Financial Inclusion Fellow.