Co-Op Bank New zealand

[percy]

Didn't want to be seen talking to myself me old mate percy

Going by your posts on Dulux thread I thought you would be used to it.
Don't worry I always read your posts,in particular your "memos to myself."
Not like you not to reply to a question.

[p2r]

I use them and they are ok, they used to do stuff through BNZ in PSIS days. They have a branch in this provincial town which HNZ and ASB don't and sometime they will pay members a dividend, or not but I can't see them asking members for money otherwise. Kiwibank might be another in this group and does have a local branch.

[winner69]

Going by your posts on Dulux thread I thought you would be used to it.
Don't worry I always read your posts,in particular your "memos to myself."
Not like you not to reply to a question.

Was waiting for a char with the C-suite

Sometime over the weekend then ... from a 'homeworkist' sngle rather than a 'balance sheetist' angle ha ha .... but then again maybe from a 'generalist' angle - like just ramble on.

[Halebop]

...gut gazing...

Ahh, the thing that happens when I try to look at my feet.

[winner69]

Main attraction to Coop Bank to put some term deposit money with is that I have a certain empathy with the coop model. That empathy derived from what has happened to many building societies and insurance companies (globally) that have demutualised and then run into the ground by growth orientated and greedy bankers driven on by shareholders who want more and more.

So in some respects it is a protest against the way is run today. A coop I believe may be run more along the line of old fashioned values. And being owned locally is also an attraction.

To be honest I don’t even know what I might get out of it from an owner perspective – one day they may give me a dividend or rebate or however they handle it. If that ever happens that will be a bonus,

Balancesheetist it looks OK. Equity/owner ratio not as high as Heartland. Assets slightly less than Heartland. But at the end of the day one needs to have trust and confidence in management to do the right things. In Coop’s case they may have to be (and seem to be) more ‘prudent’ than shareholder owned banks.

Yes some risk with depositing with them, as there is with any financial institution. I don’t even know what happens what they do if they need more capital. Yes they nearly went broke zonks ago, And I wouldn’t put all my money into them and I don’t intend using them as my main bank. Rates have only been slightly above the main banks but heck these days that seems the norm.

I have an acquaintance who works there, not C-suite but part of senior management. From what he tells me I am quite impressed as to what they want to do over the next few years. They admit to not having done much to get new depositors since they became a bank. However they are about to start a new ad campaign touting the coop model and the NZ / you own story to increase the number of depositors / customers / owners. Whether that comes with buying some with high deposit rates or lower mortgage rates I don’t know. They do need more customers to provide greater scale to do some of things they want to do … and no doubt spread the costs a bit. Watch this space. (Yes a competitor to Heartland and Kiwi). Great culture in the place as well.

The coop v big corporate is an interesting topic. I am doing a long term study on Foodstuffs (the coop) v Progressive (owned by that greedy Woolworths) and on Mitre 10 (the coop) v Bunnings (the big corporate from Australia).

Woolworths when they took over Progressive were going to kill Foodstuffs and knock them out of the market or something like that. The owner operated supermarkets just couldn’t cope with the power and might and bottomless pockets of the giant corporate Woolworths. Many years on Foodstuffs are still there and at last count still #1 – Woolworths not made much ground up at all. The owner operators are doing OK

Again Bunnings were going to sink Mitre 10, The bottomless pockets of the giant corporate was going to be just too much for owner operators to handle during the roll out of the big box hardware concept. Ten years on Mitre 10 are still comfortably #1, been more nimble and put down 34 Mega stores v Bunnings 22. Bunnings have invested over half a billion dollars and still to make any money. Again the owner operator with real skin in the game has held off the giant corporate with plenty of shareholder money (millions of Aussies with part their super money invested in them).

Told you it would be a bit of a ramble but banks like Coop need supporting for a variety of reasons – even if it is only for the reason that such models to me a lot more attractive than models where shareholders demand more and more growth. One day with all the generational changes that are evolving and the changing values that are coming with it there may be more and more of these sort of businesses operating as the populous want to get back to basics and stay local.

[percy]

Thanks winner69.
When the Coop ran into trouble I think the govt bailled them out.I am sure there is no govt guarantee now.
So balance sheet and prudent lending is important.
People who use Coop bank speak very highly of it.
Your reasons for using the coop are both honest and good.
The Foodstuffs verses Woolworths models I find very interesting.I think of Placemakers model which is half owner operator and half Fletchers.
Also Mainfreight with owner drivers.The little guy with a lot of skin in the game can take on the big boys,and often beat them.The Woolworths manager just does not have any skin in the game.The way Woolworths treat their suppliers makes me think they would not be great people to work for.
With the Coop I don't know if the managers have a lot of skin in the game or not.Heartland directors and managers have.You were going to look into that at one time,as I couldn't understand it.
I see Heartland and the Coop having bright futures as they are owned and run for NZders.Both seem want to stay close to their customers.
Competition between them should see both of them increasing market share.

[p2r]

Interesting thoughts Winner...I don't think Coop bank branches are owner operated though. I don't know how much skin staff have in the bank.

I have noticed some of the local lines companies eg Scanpower , Electra that have stayed trust owned have been quite innovative, and investing in businesses that need some capital, later selling some etc, showing initiative in services and generally being a real community benefit & asset at a community & business level. They are probably more along the lines of Coop bank. Come to think of it Foodstuffs are a community asset in that way too & allowing local producers a toe in the door. Coops possibly better to work for? SOEs are theoretically coops owned by all NZers but for some reason they don't really benefit the community so much in these ways... maybe Meridian more than most. Some companies are better though - Sanitarium, Hubbards have done some good stuff...

[winner69]

I say it was a ramble and I did stray a bit with the Foodstuffs/Mitre 10 bit

Yes Coop Bank branches are operated by the bank, not owner operated. So different type of 'coop' structure eh

Maybe the attraction then to these types of ownership models is sort of anti corporate - easy for corporates to spend and play with shareholders money v those that have a bit more to lose of their own money

[percy]

I just wonder who owns them.If it is a true Co-Op ,will members have deep enough pockets to recap it should they run into trouble> ? I would expect the risks would be a lot greater than a listed Bank such as ANZ,Westpac or Heartland who have shareholders they can call on.

The higher risks remain as it still appears that "the members" are the owners [shareholders] .
I can not see them being willing or capable of contributing to a recap should Coop ever need one.
A save business is a profitable business.It is therefore important that "the members" should know how profitable the Coop is, and what is done with the profit.To live in hope of an extra rebate or dividend may be morally fine, but in reality of a bank looking after deposits does not add up to prudent care of ones money or savings.

[craic]

I have been a customer of PSIS/ Co-Operative bank since about 1968. My son, who is an exec. in Bank Of America, London, has his NZ account there. I am more than happy with them. My share dealings go through BNZ only for convenience of a full bank before co-op bank changed over.