AFR on possible merger, page-12

Cowanna,

The SUN ceo is retiring at the end of this year.
The proposal being bandied around in the broking industry is that BEN buys the SUN banking arm.
The ceo of SUN would not be involved after the sale anyway as he would be left to run the remainder of SUNS business.

Re cost of FUNDING.......you are 100% wrong.
BEN had access to all the funds put into community banks by customers,
which is for them, a very cheap source of money.
BEN is less reliant on the wholesale money markets than any of the other banks.
The community banks are community owned, staffed and run, with all costs, wages, rents etc coming out of the individual branch surplus.
Then the community gets to keep 50% of the profit.
The bank of course does have head office costs in running the overall community bank network.
And it's not all roses as there are a few community banks not making a profit.
It is also true that BENs overall costs ......mainly staff wages .......are higher than the other banks.
This is partly because they do give better personal service at branch level which is why they are so highly rated in customer surveys.
This helps build the business .......but yes....they do need to get their overheads down.
By merging with another bank, this should happen automatically anyway as they would get some economies of scale, particularly in the admin. back office areas.

Re branch duplication.
This is not such a big issue as it would be if BOQ and SUN bank were to merge as they are both predominantly in Qld.......not so with BEN

Cheers,

Bendigo