Defcredit becomes Defence Bank
The Defence Force Credit Union (Defcredit) has this week gained Australian Prudential Regulation Authority (APRA) licensing to become a bank.
Defcredit announced the necessary approvals this week but undertook that it would remain committed to Defcredit's original principles as a mutual or member-owned organisation, rather than being a bank owned by shareholders and driven to make profits to pay dividends.
Commenting on the change, Defence Bank chief executive Jon Linehan said the decision to become a bank was made to enable the organisation to further capitalise on its strong growth, obtain greater access to more diverse sources of funding, and deliver more products and services to members.
"Becoming a bank will also enable the organisation to better compete in the broader marketplace," he said.
"Defcredit has not only managed to thrive in a difficult economic environment, but has more than doubled in size and reserves over the past six years," he said.
"We carried no bad investments in the GFC and have experienced no losses through mortgage defaults. Given this significant growth, our strong financial strength and the emergence of new opportunities in the market, we felt that the timing was right to become a bank," Linehan said.
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