Our lending and investment policy
As a customer owned bank, we use our customers’ deposits to make loans to other customers. This simple approach to banking is the cornerstone of cooperative banks around the world. The bank also invests its capital and liquid funds on behalf of customers who own the bank.
While generating a return is important, we also believe money should also be put to good use, creating positive social, environmental and cultural outcomes.
The Responsible Investment and Lending Policy guides how we put customers' money to use.
Our five responsible investment and lending principles:
- Principle One: Strive to ensure our customers’ funds are invested in loans that provide benefits to people, society or the environment
- Principle Two: Only lend to persons or organisations if it can be determined that they have the capacity to repay the loan
- Principle Three: Market all loan products in a responsible manner
- Principle Four: Offer support to customers facing financial hardship
- Principle Five: Assist customers to enhance their financial literacy.
As part of our responsible investment policy, Bank Australia makes the following commitment:
- Bank Australia has not made and will not make any loans to the fossil fuel industry, including coal and coal seam gas projects.
Transparency about APRA requirements
Bank Australia is regulated by the Australian Prudential Regulatory Authority (APRA), which requires us to follow a complex set of rules when it comes to investing our capital.
We must manage a diversified investment portfolio across a number of authorised deposit-taking institutions (ADIs), including the four major banks and regional banks. This portfolio includes fixed term deposits, negotiated certificates of deposits, bank bills, bonds, covered bonds, mortgage backed securities and floating rate notes.
It is not possible to determine the exact purpose of every dollar invested in these APRA regulated ADI products, so we cannot be sure whether the use of every dollar of these funds matches our Responsible Investment and Lending Policy.
Bank Australia holds shares in subsidiary companies, and is a shareholder in two major service suppliers:
- Cuscal (a provider of wholesale and transactional banking services)
- Data Action (a supplier of core banking and data network facilities).