Bendigo concept will be done with one commercial bank: BSP

By DALE LUMA
A BENDIGO banking concept in PNG would be done in partnership with a commercial bank, Bank South Pacific Financial Group Ltd (BSP) chief executive officer Robin Fleming says.
Responding to queries from The National, Fleming said the commercial bank would need to be fully licensed and capitalised.
Prime Minister James Marape said, when launching the PNG Think Tank Group’s online crowdfunding movement to get into the banking space, that a Bendingo banking concept could be an alternative.
This meant that in the case of the crowdfunding movement to operate a locally-owned bank, it could operate under one of the country’s bigger commercial banks as a franchise.
“In regard to the Bendigo community bank concept, it is important to understand that the Bendigo community banks are not independent and separately licensed banks,” Fleming told The National.
“Therefore, in the PNG context, any community bank concept would need to partner with a commercial bank that is fully licensed and capitalised.
“Also decide if the community bank would adopt a branch by branch model or a model that could be province by province and recognise that because the partner bank still has to maintain capital, infrastructure and other operational support for the community bank the interest margins and fees are only shared at a rate agreed with the commercial bank and that as a consequence overall profitability may well be different to the commercial bank.”
Fleming said the objectives of the Bendigo model were not fully commercial as they were also aligned to promoting economic sustainability and growth for their individual rural areas.
He added that the licensed bank was Bendigo and Adelaide Bank Limited which was listed on the ASX (Australian Securities Exchange) and which maintained and operated a fully commercial banking business with bank branches that would need to meet shareholder equity and asset return hurdles similar to that of any other commercial banks.