Heritage name change plan aimed at maintaining relevance to future generations

Heritage Building Society’s proposed change of name is aimed at maintaining relevance with future generations, Chairman Mr Brian Carter will tell today’s Annual General Meeting.

Heritage last month announced plans to change its name to Heritage Bank Limited. That proposal will be put to a vote of members at the AGM today. A 75% majority of votes cast by eligible members is needed to approve the resolution.

Heritage also requires approval from the Australian Prudential Regulation Authority (APRA) before a name change can take place.

Mr Carter will tell today’s AGM that the gradual decline in the number of building societies had reduced the prominence and understanding of the term, especially among younger people.

He said the building society’s mutual model of banking remained extremely relevant and successful, but the term “building society” no longer resonated.

“When I first joined the building society movement back in 1975 there were well over 100 building societies of various forms in Australia,” Mr Carter said.

“Today there are only nine, apart from Heritage, and one of them has announced its proposed departure. Four of them do not currently use the words ‘building society’ in their names.

“The unfortunate fact is that younger people do not know – and, more importantly, do not care - what a building society is. The consequence of this is that they will take their financial business to something they know and understand – a bank.”

Mr Carter said a change of name had occurred several times in the organisation’s 136 year history, most notably when the Boards of two building societies voted to merge in 1981 and adopt the new title of “Heritage”.

He said the wisdom of that decision could be judged by the subsequent results, with Heritage this year notching its 12th successive year of record pre-tax profit.

“We have evolved with the times and done what has been necessary to remain relevant and competitive. Amongst other things, this has included several changes of name,” Mr Carter said.

“I commend the advice of the current Board, a number of members of which have overseen the Society’s affairs during those 12 years of record profit. That advice is to change the society’s name so that we may continue to flourish rather than risk going backwards and possibly into eventual oblivion.

“It is important that I underline again that the name change proposal that will be voted on in the AGM is simply that – a change of name only. No more, no less.

“Heritage will not de-mutualise, or list shares on the ASX. It will not abandon the People first philosophy that has served the organisation and its members so well.

“The way forward for Heritage is more of the same that has brought us to where we are today”

Mr Carter will tell the AGM today that global economic uncertainties had made for very difficult times, with the flow-on impacts possibly yet to fully be felt.

However he said Heritage had a sound strategic plan that was constantly under revision as global circumstances changed.

“The name change, if approved, is part of that strategy. So too is the $800 million securitisation deal we completed in July, our largest ever domestic deal.

“Heritage has performed exceptionally well in a home lending market that has been severely reduced by the current economic climate and we have the strategy and leadership in place to continue delivering results for our members.”

* Based on a $150,000 loan over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.