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New name, new Heritage funds

New name, new Heritage funds

Fri August 3, 2012 9:32pm

SWITCHING labels from a "building society" to a "bank" helped crack open doors to new funds, says Toowoomba-based lender Heritage Bank.

"It has improved our image," Heritage's new chairman Kerry Betros said.

His comments came as Heritage yesterday announced a slight rise in full-year pre-tax profits of 1.1 per cent to $44.36 million, slower than the previous year's 3.7 per cent rise. Profits after tax dipped slightly, although Mr Betros attributed this to a tax benefit Heritage had accrued a year earlier.

The 60-branch lender, owned by customers and using the slogan "people first", swapped labels to a bank in December.

Mr Betros said the name change had not attracted a flood of Generation Ys. "The change to a 'bank' is going to be a long-term process, from the point of view of attracting more people," he said.

Yet he said the change "has opened up some opportunities for funding".

Since the global financial crisis, funding sources for lenders has become more expensive. One example is in deposits; where competition remained "very intense".

Heritage has dipped into other funding markets, including raising $227.5 million via bonds to mum-and-dad investors in June.

The offer received overwhelming demand. It came only weeks after employment website Seek pulled a $125 million note offer amid lukewarm markets.

Heritage noticed greater access to syndicate brokers and institutional investors, and linked this to the name change.

"There were people down south, who had never heard of us, and when Heritage was explained to them, they were very enthusiastic," Mr Betros said.

But one fund management source has told The Courier-Mail that Heritage was still not viewed as being as transparent as bigger banks, which give out detailed analysis of results. Mr Betros argued the institution published full accounts.

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