THE community has created a juggernaut of a business … that’s how Barry Henwood, inaugural director of Valley Community Financial Services, describes its community banking model.
Rightly too, as the business, which started in Hurstbridge in 2001, now operates five community banks branches for the Bendigo Bank, including Doreen-Mernda, Eltham, Diamond Creek and Kinglake, and has $10 billion of banking business. It is celebrating its 25th anniversary this month.
Taking a trip down memory lane, and reflecting on the important history, Mr Henwood said: “When our last bank, the ANZ, left Hurstbridge in 1998, some local people got together and said, ‘we really need a bank in Hurstbridge, we think that we’re entitled’. They had heard about this new community bank model from the Bendigo Bank. So they set about to grow some community support for the notion of creating a company that could take out a franchise as a community bank in Hurstbridge. It took them about three years.
“And finally we had plenty of people who said, if you floated a prospectus, we would buy shares in the business and we would bank with it. The (Bendigo) bank had approved that if you can raise the funds, we’ll give you a franchise. So in 2001, we had raised about $600,000 in capital, which gives you the money to rent a building, hire some staff and have some ongoing money to run the business while you start to build it and come into profit.
“So we started in April, on the 5th in 2001 we opened. The Hurstbridge branch hit the ground running. People got right behind it, local people. On the ninth month, we recorded a profitable month, which was pretty well unheard of at that time. And by the second annual general meeting, we actually declared a small dividend to shareholders as well as we started to put money back into the community.”
Mr Henwood said: “With our banks, when you walk in the door, you get a great product, in your mortgage, your deposits, whatever you might want to do, and just by walking in that door, you’ve just supported every club, group, school, kinder, you name it. You’re inadvertently supporting all those groups just by walking in our door and it’s local and it’s easy. It’s just old-fashioned friendly service and the business has now grown to over a $10 billion in banking business.
“We have some absolutely remarkable numbers in our business. We have 26 per cent of all the mortgages in the Hurstbridge and district area. That’s against a national average for the Bendigo Bank of less than 5 per cent. So, pretty sensational.
“We raised capital from shareholders, or new shareholders to invest in those community banks. It’s a part of the model that the community has buy in because by trying to get the community to own it, they’ll also want to support it. That is how the model works and it worked for us
extraordinarily well.”
The first big project supported was the rebuilding of the Hurstbridge Primary School burned down from fire.
“On New Year’s Day in 2003, the school burned down. On the day after the fires, our chair at the time, Dale Trezise, who was the inaugural chair, announced a $10,000 grant to the school,” Mr Henwood said.
“That was just the beginning of what turned into really an amazing business helping locals. We have gone on to start community banks in five places after local people asked us to open banks.”
In the past 25 years, the banks’ accomplishments include:
Given more than $10 million to the community.
Brought banking back to the local communities.
Had a big impact on the areas’ economy, employing locals in the past 25 years.
Some of the vast number of key projects of local clubs and organisations the community banks have supported include Whittlesea Show, 1st Whittlesea Scouts, women’s football, Whittlesea Country Music Festival, Whittlesea Secondary College Leadership Program, Whittlesea Football club – SALT program, Whittlesea Pacers – computer scoreboard, and Laurimar Primary School, aged care and mental health services.
Doreen Senior Club and OMNI are among the organisations that the branches have supported.
Other big projects provided support include $1 million contribution for Community Bank Stadium at Diamond Creek, Hurstbridge Men’s Shed, Arthurs Creek Community Centre, Murrindindi Ranges Wildlife Shelter Xray machine, women’s football – training light at Plenty.
The business has five branches. Doreen-Mernda branch was opened in 2011.
The business has 30 employees and also mobile bankers who can go out to customers.
To celebrate the 25th anniversary, a major event will be held at Bridges in Hurstbridge on Friday, April 10. Among about 196 people attending are the original steering committee and local councillors.
Mr Henwood said there will be representatives from all clubs and organisations the banks have supported throughout the 25 years.
“They (locals) are the ones who made it work. You know, it is one hundred per cent about the community. We are a grassroots business. It is what the people in our community want that we try to support and this is how this came about. Local people said, ‘hey, we want to have a bank … we’re entitled,’ and we’ve made it happen and then they supported it and made it such a successful business,” he said.