No changes? Don’t bank on it

THE Bendigo Bank made lots of friends in lots of little communities when it developed its ‘community bank’ strategy and this was good.
People with significant savings combined with community feeling embraced the new system and set up committees to help run the concept.
Bendigo Bank did well and pays a fair dividend on its shares and the Bendigo Community Bank, a type of franchise to the parent bank, channels money back into the community.
The Coastal Villages are in the process of bringing the bank to Tooradin, but now struggle with the uncertainty of a takeover bid by the Bank of Queensland.
Bendigo is probably the lowestperforming bank in Australia, using economic norms to assess its performance, but the highestperforming bank using community values to assess performance according to its charter.
But a lowestperforming bank in Australia still means a profitable enterprise in economic terms; that’s the nature of banking.
Bendigo established itself with the sales pitch that it would replace the ‘little bank offices’ closed by the major banks in hundreds of ‘little townships’ that left thousands of people without a banking facility.
This bank rationalisation impacted negatively on elderly people and people with limited transport who relied on services near their homes.
However, smaller companies performing well in the present share market environment are more thanever likely to be the target for takeover, including the Bendigo Bank that last year showed a 10 per cent profit increase.
Many of these target companies are probably doing well in Australia because of our strong economy and have to be compared with a juicy peach delicious and prime for picking.
So along comes the Bank of Queensland, basically controlled by a man with big bank experience, its chief executive David Liddy, formerly of Westpac.
The offer comes with comment that the present structure of Bendigo Bank would remain the same, but we’ve heard such promises before.
The two banks have vastly different operating cultures so it goes without saying that changes would most likely occur and I can’t see communities being happy about that prospect.
Mr Liddy has in reports made it known that he intends to be the chief executive of both banks should they ‘merge’, but he is a chief executive franchising to private individuals who may not have the same thought for community norms as a public committee would.
I don’t like what I see because it would be a pity to see the Bendigo Bank structure unravelled.
This Bank of Queensland takeover bid could be a ‘feint’ designed to bring an offer for the Bank of Queensland from another bigger bank and ultimately Bendigo would be left alone, but you can’t predict what the wheelers and dealers are thinking.
Bendigo has done the hard yards and is now putting money back into the community, but, when it comes to buying up its shares, money counts.
The question is whether the mums and dads who hold most of the Bendigo shares will let them go, even at the attractive offers now on.
If they don’t, then the Bank of Queensland may have bitten off a little more than it can chew.
It will have increased Bendigo’s share value by 30 per cent and maybe put the little bank in a position where it turns tables and becomes the bidder.