Bendigo Bank branch 'among the worst'
The Ettalong branch of the Bendigo Bank is among the worst performing of all Bendigo Bank branch franchises, according to a report published in Fairfax newspapers earlier this month.
It is one of 20 "basket cases" that have lost all the capital raised by locals, according to the report on May 14 by journalists Rafael Epstein and Adele Ferguson based on an analysis by retired auditor Mr John Williams.
At the end of last financial year, branch franchisee Ettalong Beach Financial Services Ltd had recorded accumulated losses of $915,792 against initial capital of $722,104.
The negative equity of $193,688 represented a loss of $1.27 for each dollar invested.
The branch continued to trade with an overdraft from the Bendigo Bank of $344,354 at June 30 on an interest rate of 11.14 per cent.
The loss recorded for the year was $32,034.
Half year results to December 31 have shown a profit of $19,315 - the first profit recorded by the branch.
However, the accumulated losses remain more than three times the $274,767 shown in the worst scenario anticipated in the prospectus for the branch, issued in October 2004.
The newspaper report stated that the branch "has repeatedly been fined and had trade in its shares suspended, for late reporting of financial accounts and other compliance issues".
Trading in the branch's shares is currently suspended.
The suspension notice, issued by the Bendigo Stock Exchange on May 10, stated the reason as "for breach of listing rule 3.23", a rule referring to notification of meeting resolutions.
The report, published in the Sydney Morning Herald, the Age in Melbourne and the Brisbane Times, also claimed the branch "was battling a savage board dispute", with "disputes about where the bank's donations would go".
The two people credited with initiating the branch, Debra and Matthew Wales, lost their seats on the board at the branch's annual meeting on November 23 last year.
Ms Wales failed to be re-elected and Mr Wales tendered his written resignation, according to minutes of the meeting lodged with the stock exchange.
The minutes record Ms Wales expressing her dissatisfaction with some activities of the board, including a statement that "some members of the board cannot be trusted".
Despite speaking at length with Peninsula News, neither Mr Wales nor Ms Wales wished to place their comments on the record.
The board has lost a total of seven directors in the last year, with two "removed" and another five resigning, the most recent being local solicitor Ms Katie Smith last Thursday.
Chairman Mr Mick Gage was contacted for comment but denied there was any loss, saying only that the Fairfax newspaper report had misrepresented the branch.
Former chairman Mr Don Leggett also claimed there was no real loss.
"The loss was part of the growing up that most businesses go through.
"It wasn't a loss," he said.
"That loss was already there.
"That's all been recovered and we've been profitable every month for the last six months."
Bendigo Bank's head of media and communications Ms Lauren Treacy said: "Bendigo and Adelaide Bank recognises there are a number of Community Bank companies running behind their business plan.
"However these companies, including the Ettalong Beach Community Bank company, retain our support.
"Experience has shown that with sound business and marketing plans, and the support of the community, branches can turn their performance around," said Mr Treacy.
Kaitlin Watts, 27 May 2011
Interviewees: Mick Gage, Don Leggett
Newspaper, 14 May 2011
Adele Ferguson, Sydney Morning Herald
Website, 27 May 2011
www.bsx.com.au
Media Statement, 27 May 2011
Lauren Treacy, Bendigo Bank