Katoomba and Springwood Mutual Banks set to close

Sixteen branches of the Sydney Mutual Bank are set to close, including two local branches at Katoomba and Springwood.

Those branches are due to close on February 26 next year with banking moving online and to mobile lending apart from six branches at Penrith, Bankstown, Rouse Hill, Sutherland, Parramatta and Campbelltown.

Australian Mutual Bank Chief Executive Officer Mark Worthington confirmed the branch closures to the Blue Mountains Gazette and said they were in the process of informing 4150 potentially affected members out of the total 74,000 members/customers.

Mr Worthington said "the current interest rate environment (indirectly caused by Covid-19), as well as reduced branch traffic, reduced cash usage, and greatly increased use of online and non-cash payments, has caused us to re-assess how we deliver services to our members".

"Also, as a result of the RBA's low interest rate environment, we must reduce our expenses commensurate with the reduction to our loan interest revenues."

There will be no forced redundancies and all five [local] employees will be offered alternative positions, he said.

"Should distance and travel time be an issue for them we will certainly look at work from home arrangements."

He said the affected number of members/customers from the Katoomba and Springwood closures is 1,250 and 2,900 respectively, although only 2,300 members visited either branch in the past 12 months.

"We have identified those members who do not have payment cards or access to online banking and we will be contacting each of them individually."

Mr Worthington, who was the CEO of Endeavour Mutual Bank from 2016 - 2019, said the bank remained a "small member owned co-operative bank (formerly a credit union) and we always try to look after our members and employees".

"All affected branch employees are aware of the closure plans, it is the members who are yet to be informed."

"For our size, $1.65bn assets, and in this environment, we have far too many branches at twenty-two. As a comparison, the $8.10bn Teachers Mutual Bank only has ten branches."

Australian Mutual Bank Ltd (AMBL) was created on October 1, 2019 by the merger of Sydney Credit Union and Endeavour Mutual Bank. Endeavour has provided services since the '50s.

The news will not come as a surprise to those who read the bank's 2020 Annual Financial Report on September 30 which stated: "The low interest rate environment caused by the Covid-19 pandemic will in the short term affect the bank's future profitability"

"Australian Mutual Bank will begin a two year program of voluntary redundancies and branch closures. It is anticipated that up to thirty employees will seek to voluntarily depart and that up to sixteen of the current twenty-two branch network will be closed by 30 June 2022."

The redundancies will come from across the organisation and all are voluntary. Australia-wide there are 74,000 members "and we know that more than four out of five members did not go to a branch in the last 12 months," he said.