As some of the posters here have indicated, Bingo Bank is prepared to go where no one else goes - Another big fat lie! Bingo only goes where another institution has already established a presence (70% of new branches) and Bingo does not put up its own money but asks Mum & Pop investors to fund it. When these branches struggle to make money or even start chewing up their own equity (30%), then Bingo props them up with loans at commercial rates. No price for guessing what happens next if the branch does not improve: Mum & Pop lose their investment in what they believed was Bingo bank but in reality was only a franchise that carried the Bingo name.
Investors query struggling Bendigo Bank branches Raphael Epstein, Adele Ferguson May 14, 2011
ONCE hailed as the financial saviour of small towns, Bendigo Bank is under attack from local residents as their branches struggle to survive and communities subsidise the bank's rapid plans for expansion.
For a growing number of investors and locals, the bank is a model that hasn't lived up to its promises and they no longer believe its mantra that its community branches help sustain local businesses and donate money to local sporting clubs - to ''feed into prosperity, not off it''.
A detailed examination of the workings of Bendigo's 193 community banking companies by the Herald reveals ailing branches have used up more than $26 million of investors' funds, which is equivalent to the loss of 20? in every dollar.
Advertisement: Story continues below It can also show that one in 10 community banks is on life support and is being propped up by substantial loans from Bendigo Bank - at commercial rates - and that more than one third of community bank companies lost money last year.
It has been revealed the Ettalong branch on the central coast, along with a handful of others, has repeatedly been fined and had trade in its shares suspended, for late reporting of financial accounts and other compliance issues.
Bendigo has been on an aggressive expansion strategy in the past 13 years, opening 193 community bank companies, which the company says is more than one quarter of all the new bank shop fronts opened in Australia. They are funded by local communities, with hundreds of people investing more than $131 million in savings to help start a community bank.
Contrary to public perception that Bendigo opens up in communities where other financial institutions have pulled out, the latest data reveals that of the last 100 community bank branches to open, 75 per cent already had another financial institution operating in the local area.
It has also been opening up community bank branches in the suburbs, including Homebush in Sydney in 2004, which competes with numerous credit unions. Homebush has used up almost twice its start up capital, has negative equity of $533,316 at June last year, made a loss of $63,395 and negative a cash flow of $45,280. It is propped up by a loan from Bendigo Bank.
The bank denies communities are losing out, saying they aim to build skills, create jobs and make local donations. Bendigo Bank's managing director, Mike Hirst, said there were positive returns on average at the branches open for five or more years: "There's a whole heap that are making profit, a whole lot of them are making significant gains" he said.
But one investor in Victoria, who asked not to be named, said he had been putting ads in the local paper since last year, trying to sell his shares. He said he invested $10,000 in the community bank to support his community and make some money.
Mr Hirst disagreed: ''The shares look pretty attractive to me,'' he said. Bendigo Bank said fewer than 20 people had complained to them about their shareholding.
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