Fremantle is poised to become home to Western Australia’s 30th Community Bank branch, which will break new ground by targeting the local business community.
A group of business people and community members in Fremantle launched a prospectus this week seeking to raise up to $1 million to fund the establishment of the Community Bank branch.
The proposed branch would be the first Community Bank to have its own business bankers and is aiming to trade profitably in its second year of operation.
Community Bank branches are 50:50 joint ventures between Victoria’s Bendigo Bank and commu-nities around Australia, and their growth has been unexpectedly prolific since the first was established in 1998.
Collectively, the Community Bank branches in WA, including at Bayswater, North Perth, Forrestfield, Toodyay and Halls Head, have loans and deposits worth nearly $1.2 billion.
Originally the Community Bank branches emerged in response to branch closures by the major banks, but in recent years they have been established in areas that are serviced by other banks.
Fremantle is a prime example of this trend.
The presence of all the major banks was a factor in the failure of an earlier attempt three years ago to establish a Community Bank branch in the port city.
However, that has not deterred Fremantle business consultant Lally Major, who has been the driving force behind the proposed branch and has been working on the project for about 18 months.
She is one of nine directors of Fremantle Community Financial Services Limited, which is aiming to raise a minimum of $710,000 and a maximum of $1 million to set up the new branch.
The chairman of the project company, former QR Sciences executive Kevin Campbell, said the proposed branch would not only secure banking services in the area but would improve the community’s long-term prospects by offering greater control over its capital resources.
“Our decision to proceed with this capital raising was based on a survey in which local people and businesses indicated the banking business they would bring to a locally owned branch,” Mr Campbell said.
He added that the business plan showed the branch had “solid prospects of generating positive returns for investors”.
A portion of the branch’s profits will be reinvested in community projects each year.
The committee that is backing the proposed branch has already had to pass a number of milestones.
It has obtained non-binding pledges of support from 475 community members worth $770,000. Upon issuing the prospectus, it will seek to turn the pledges of support into firm investments.
The organising committee also commissioned accounting firm RSM Bird Cameron to complete a feasibility study.
It projected the branch would have $61 million of loans and $22 million of deposits by year three, and a net profit after tax of $251,000.
Mr Campbell said the big business sector in Fremantle meant the growth in lending was likely to be higher than at comparable Community Bank branches around Australia, although deposit growth was expected to be slower.
The Fremantle branch will have a two-person business banking team, who will be employees of Bendigo Bank.
Apart from Fremantle, four other communities in WA, including Melville, Albany and Lancelin, are seeking to establish Community Bank branches.
A new trend for the Community Bank branches is to have their shares listed for trading on the Bendigo Stock Exchange, which is part-owned by Bendigo Bank.
Shares in Fremantle Community Financial Services will be listed as soon as the proposed branch is established.
