Profitability and productivity –

effective, efficient and sustainable

Goal six: deliver profitability and productivity.


To deliver quality products and services, bankmecu will strive to ensure its products, services, systems, suppliers, policies and procedures deliver effective reliable outcomes at fair and competitive cost to customers.

Profit and loss account 

Interest received on customer loans 145,059 140,519
Investment income 26,033 23,993
Other income 16,797 19,454
Total earnings 187,889 183,966
Interest paid on customer deposits 98,586 91,029
Interest paid on borrowings 1,760 2,912
Employee benefits 25,724 26,994
Other administrative costs 24,772 25,132
Income tax expense 10,031 10,388
Total expenses 160,873 156,455
TOTAL PROFIT 27,016 27,511

Net profit 

Key performance indicator Domestic bank industry average at Dec 2011 2011/12
2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference between 10/11 & 11/12
Net profit before tax
- 36.0 37.0 37.9 25.7 25.5 24.9 23.6 23.9 –2.25%
Net profit after tax
- 26.2 27.0 27.5 18.2 18.3 17.5 16.6 17.1 –1.82%
Return on equity 7.80% 8.83% 9.08% 10.13% 7.83% 9.43% 10.28% 10.70% 14.40% –10.34%

Source: Domestic bank average provided in APRA quarterly report.

Credit quality

Credit quality measures the percentage of delinquent loans 30 days in arrears to the total of bankmecu’s loan portfolio. The bulk of delinquent loan balances are made up of mortgages over 30 days and in arrears.

Key performance indicator Domestic bank industry average at Dec’11 Target 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference between 10/11 & 11/12
Credit quality 0.30% - 0.27% 0.51% 0.46% 0.18% 0.23% 0.12% 0.14% –46.58%

 Source: Domestic bank average provided in APRA quarterly report.

In 2011/12 there was a 46.58 per cent decrease compared to 2010/11. The decrease was a result of debts being paid in full, refinances or accounts brought up to date.

At 30 June 2012, bankmecu held 12,087 mortgages; of these only 25 were greater than 30 days in arrears representing 0.21 per cent of this portfolio.

Over the past year industry-wide lending has slowed, reflecting the interest rate environment and increased consumer debt conservatism from the fallout of the global financial crisis, and customers have been contributing more household income to paying off debts.

bankmecu has very conservative lending guidelines and continues to adopt a responsible banking approach by ensuring loans benefit rather than handicap customers.

Credit integrity

To meet its prudential obligations and reflect true value of its assets, bankmecu set aside provisions identified impairments within its loan asset portfolio.

bankmecu’s responsible lending practices support bankmecu’s long-term economic performance and have resulted in a low provision for impaired loans against a growing loan portfolio.

Provision for impaired loans 
Year Bad and doubtful debt expense
Provision for impaired loans
Total loan portfolio
Provision for impaired loans to loan portfolio
2011/12 –67,467 515,739 2,210,654,941 0.02
2010/11 1,064,795 1,220,572 2,116,056,214 0.06
2009/10 179,760 554,833 1,958,974,225 0.03
2008/09 292,812 410,793 1,397,920,362 0.03
2007/08 151,778 335,061 1,101,879,505 0.03
2006/07 176,334 445,611 941,697,201 0.05
2005/06 264,011 666,815 844,449,970 0.08
2004/05 66,276 1,033,459 813,722,501 0.13

2011/12 saw a reduction in provisions for impaired loans which was due to the removal of provisions last financial year raised as a result of natural disasters. The provisions were removed because the potential losses identified were not realised.

bankmecu’s Credit Integrity Team adheres to all relevant legislation and codes regarding the handling of bad debt recovery. They assist customers where possible to manage their credit responsibly. bankmecu continues to support customers who may experience financial hardship and assist them where ever possible.

bankmecu’s delinquency still remains low compared to industry benchmarks.

Total operating expenditure

Total operating expenditure in 2011/12 was $50,497,356.

Primary suppliers

As a practice, bankmecu sources all of its supplies in the Australian market. Suppliers are required to demonstrate ongoing compliance with all relevant Australian laws and regulations.

Suppliers’ details 
Suppliers Service provided % of total operating expense in 2011/12 Difference in actual expenditure between 2010/11 & 2011/12
Cuscal Payment channel services



Data Action IT and data processing



Hermes/Precisa (Salmat) Mail house



Telstra PABX Phone System and Maintenance



QBE Mortgage Insurance Services Mortgage loan insurance



Cuscal is bankmecu’s provider of wholesale and transactional banking. In 2011/12, Cuscal’s cost increases were mainly due to Bank designation costs associated with new Visa card production and cheque book printing, as well as the introduction of automated transaction fraud monitoring. bankmecu is a shareholder in Cuscal.

Data Action is bankmecu’s core banking and information technology bureau service provider. In 2011/12, Data Action’s cost increases were mainly due to work related to Bank designation costs, the introduction of the Internet Lending Package and miscellaneous software upgrades. bankmecu is a shareholder in Data Action.

Hermes Precisa/Salmat provides statement mailing and other mail services to bankmecu. In 2011/12 payment decreases resulted from bankmecu’s continued increase in customer take up of e-statements. This has also resulted in paper saved.

Telstra provides PABX phone systems and maintenance services to bankmecu. Higher costs were related to PABX upgrades.

QBE Mortgage Insurance Services provides mortgage insurance services to bankmecu. QBE costs decreased, reflecting a reduction in lending where loans exceed 80 per cent of the value of security properties.

Cost of materials and services purchased

Cost of materials and services 
Cost of materials and services purchased 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05 Difference between 2010/11 & 2011/12
Total ($m) 26.5 26.1 25.2 21.2 20.6 17.90 19.40 20.90 1.33%
% of operating expense 52.53% 50.52% 50.44% 55.14% 64.02% 60.26% 64.37% 59.69% 3.98%

bankmecu’s total operating expenditure does not include capital expenditure of $3.7m, which is included in the cost of materials and services figure provided.

bankmecu’s total operating expenditure includes depreciation expenses of $1.9m, which is not included in cost of materials and services figure provided.

Payments to employees 

  2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05 Difference between 2010/11 & 2011/12
Payroll and benefits paid $25.7m $26.9m $25.0m $17.2m $13.2m $11.8m $11.5m $13.2m –4.70%
% of operating expense 50.94% 52.14% 49.24% 44.76% 41.16% 39.32% 38.19% 37.70% –2.30%

Employee payroll and benefits paid decreased by 4.70 per cent compared to last year. The decrease reflected ongoing efficiencies gained from post-merger synergies.

Salaries are determined using a range of external benchmarks, including the Australasian Mutuals Institute Salary Survey, and are reviewed annually to ensure they remain competitive with industry standards.


bankmecu aims to increase productivity to $10m+ assets per full-time employee.

Subsidiaries and joint ventures will make a level of return on capital at better than the average previous year’s bank bill swap rate (BBSW).

bankmecu will manage business units according to Board-approved budgets to achieve a budget objective of 1 per cent after-tax return on average assets.

bankmecu will protect its operating margin by managing the interest margin, improving non-interest income and keeping the operating expenses to income ratio within the top quartile of the Australian mutual banking sector.

bankmecu will promote a constant process of efficiency improvement.

Asset to staff ratio

Asset to staff ratio 
Key performance indicator Target 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference between 2010/11 & 2011/12
Asset to staff ratio >$10m/FTE $9.6m $8.5m $7.8m $7.8m $8.0m $7.3m $6.4m 12.05%

Asset to staff ratio represents bankmecu’s total assets per full-time equivalent (FTE) staff. bankmecu’s ratio increase is attributed to continuing post-merger synergies resulting in a decrease in bankmecu’s FTE figure from 307.36 in 2010/11 to 296.46 in 2011/12, while assets increased $200m during the same period.

Return on equity

Return on equity 
Key performance indicator Domestic bank industry average at Dec 2011 2011/12 target 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference between 2010/11 & 2011/12
Return on equity 7.80% 8.83% 9.08% 10.13% 7.83% 9.43% 10.28% 10.70% 14.40% –10.34%

Source: Domestic bank average provided in APRA quarterly report.

bankmecu aims to achieve a return on equity greater than 8.83 per cent. Although return on equity decreased by 10 per cent in 2011/12, it remains higher than target and the industry average.

Return on average assets

Return on average assets 
Key performance indicator Domestic bank industry average @ Dec 2011 Target 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference between 2010/11 & 2011/12
Return on average assets 0.90% 0.97% 0.99% 1.09% 0.85% 1.09% 1.22% 1.25% 1.44% –9.16%

Source: Domestic bank average provided in APRA quarterly report.

Return on average assets represents the per cent of net profit after tax to average assets.

The decreased return can be largely attributed to interest margin pressure from several interest rate cuts and increased costs associated with bankmecu’s new bank designation. In addition, average assets increased by $200m.

Subsidiaries and joint ventures

bankmecu does not have any joint ventures. The Ed Credit Services Unit Trust’s return on issued units was 6.75 per cent, which exceeded the average 2010/11 90-day BBSW at 4.93 per cent.

Net interest margin

Net interest margin 
  2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05
Interest income on loans
145.1 140.5 108.0 89.9 80.4 66.8 59.8 56.7
Interest income on investments
26.0 24.0 21.9 24.9 28.1 25.0 18.9 16.6
Interest expense on deposits
100.30 93.9 67.5 64.2 62.4 48.9 39.9 35.6
Net interest margin
70.7 70.6 62.5 50.6 46.0 42.9 38.8 37.7
Net interest margin as a % of average assets 2.59% 2.79% 2.92% 3.01% 3.20% 3.20% 3.30% 3.40%

Net interest margin is a measurement of the difference between the interest income generated and the amount of interest paid out.

The reduction in the ratio is the result of continuing price competition in the marketplace as the banking sector replaces wholesale borrowings with retail deposits as a primary funding source, bankmecu’s ongoing commitment to maintain highly competitive loan and deposit rates for its customers, and decreased yields on investment of high quality liquid assets following regulatory tightening.

Refer to the ‘Statutory Financial Report’ for a geographic breakdown of deposits and loans.

Cost to income ratio

Cost to income ratio 
Key performance indicator Domestic bank industry average at Dec 2011 Target 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference between 2010/11 & 2011/12
Cost to income ratio 69.60% 59.25% 57.73% 56.69% 66.13% 59.59% 56.02% 55.50% 55.80% 1.83%

Source: Domestic bank average provided in APRA quarterly report.

Despite an increase due to lower operating income, the cost/income ratio remains a very clear benchmark indicator of bankmecu’s efficient operation.

The cost to income ratio increase is attributed to a decrease in operating income (e.g. a static net interest margin, insurance portfolio transfer fees, lending fee income, dividends and securitised lending income decreasing), while operating expenses remained steady.


bankmecu will practice systematic and balanced business strategies that satisfy the economic, social and environmental performance expectations of its stakeholders now, while protecting, sustaining and enhancing the financial, human and natural resources that will be needed to develop the Bank into the future.


bankmecu operates a number of premises in metropolitan and regional areas throughout Australia. For business purposes, bankmecu utilised 7986 square metres of land, including 2029 square metres of car park space. bankmecu owns approximately 67 per cent of premises and the remainder are leased. bankmecu’s land footprint is small because the Company encourages customers to bank using remote channel access including internet banking systems and automated telephone banking.

In addition to land occupied for banking operations, bankmecu owns 761 hectares in Victoria’s West Wimmera. The land is being utilised as a Conservation Landbank with a view to protecting and enhancing its biodiversity value while sequestering carbon from the atmosphere. These properties have been purchased through recommendation by Trust for Nature for their significant biodiversity conservation value. Read more about bankmecu’s Conservation Landbank

Environmental Management System

The natural environment provides bankmecu with the resources required to carry out day-to-day operations. Minimising bankmecu’s impact on the environment will help to ensure the Company’s sustainability by reducing operating costs and placing less strain on finite natural resources.

In 2010/11, bankmecu put in place an Environmental Management System (EMS) to monitor aspects of bankmecu’s operations with an environmental impact and to put in place an action plan for continual environmental performance improvement.

bankmecu’s Environment Policy outlines bankmecu’s major impacts on the environment and articulates the Company’s approach to managing operational impacts in relation to waste, energy, travel, water, land, procurement and partnerships.

Key environmental objectives include:

  • to use energy more efficiently
  • to use water more efficiently
  • to reduce the amount of waste produced and increase the quantity of waste re-used and recycled
  • to reduce the environmental impacts of travel
  • to consider environmental issues through procurement activities
  • to consider environmental issues associated with products and services offered to customers
  • to consider environmental issues when new partnerships are formed
  • to increase environmental awareness amongst customers and employees; and
  • to maintain carbon neutrality.

Targets have been established and action items identified with clear responsibility to continually monitor and improve performance against bankmecu’s objectives. Targets are highlighted throughout this report where applicable.

Greenhouse gas emissions

EMS target:

  • Reduce carbon emissions per FTE by 10 per cent by 2014/15 relative to 2009/10 levels – in progress.
  • Offset all Scope 1 and 2 emissions by 30 June 2011 – target met.
  • Endeavour to add at least one new Scope 3 emission source per year for the following 3 years – target met.

bankmecu greenhouse gas emissions are broken down into Scope 1, Scope 2 and Scope 3 emissions as per the most widely used international accounting tool – the Greenhouse Gas Protocol published by the World Business Council for Sustainable Development and the World Resources Institute.

Scope 1, Scope 2 and Scope 3 emission sources

Source: Greenhouse Gas Protocol

Scope 1: Direct Greenhouse Gas (GHG) emissions occur from sources that are owned or controlled by the Company. For example, emissions from combustion in owned or controlled boilers, vehicles.

Scope 2: Indirect GHG emissions occur from the generation of purchased electricity consumed by the Company.

Scope 3: Other indirect emissions are a consequence of the activities of the Company, but occur from sources not owned or controlled by the Company. For example, extraction and production of purchased materials, use of products and services and waste disposal.

bankmecu currently reports on emissions relating to car travel and gas consumption (Scope 1), electricity (Scope 2), air travel, paper and waste to landfill (Scope 3). bankmecu is investigating means for including emissions from additional sources not currently included in the Company’s emissions profile.

bankmecu greenhouse gas emissions (CO2-e tonnes) 
  2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 % difference b/w 2010/11 & 2011/12 % difference b/w 2009/10 & 2011/12
Car travel – company owned* 22.30 23.07 72.07 46.44 39.55 47.55 46.9 –3% –69%
Gas – Scope 1 69.16 79.87 67.89 49.08 39.77 26.53 31.7 –13% 2%
Electricity – Scope 2 1,429.65 1,643.81 1,996.63 1,319.36 1,149.50 1,069.63 1,223.50 –13% –28%
Gas – Scope 3 5.66 6.49 - - - - - –13% -
Electricity – Scope 3 184.56 197.16 - - - - - –6% -
Car travel – company owned* 1.70 1.76 - - - - - –3% -
Car travel – employee owned claims* 8.12 13.73 - - - - - –41% -
Car travel – packaged cars* 41.22 78.8  -  - - - - –48% -
Air travel** 173.79 147.65 47.91 62.02 39.46 53.95 28.3 18% 263%
Paper – office paper*** 14.66 14.33 - - - - - 2% -
Vega – printing jobs, including paper**** 66.49 37.2 - - - - - 79% -
Waste – general waste to landfill 50.46 28.92 - - - - - 74% -
Total emissions 2067.77 2272.79 2,039.02 1,256.24 1,041.16 990.91 1,330.40 –9% 1%
Total per FTE 6.97 7.39 6.5 5.59 5.51 5.44 6.94 –6% 7%
Air travel offsets 0 0 0 –80.55 –42.67 –79.55 0 - -
GreenPower 0 0 –145.48 –140.11 –184.45 –127.2 0 - -
Vega – printing jobs –66.49 –37.2 - - - - - - -
Climate positive offsets***** –2002.00 –2236.00 - - - - - –10% -
Total offsets –2068.49 –2273.20 –145.48 –220.66 –227.12 –206.75 0.00 –9% 1321%

* Prior to 2010/11 all car travel was recorded together. Emission data relating to car travel is now broken down as per the GHG Protocol. Records prior to 2010/11 have been placed in Scope 1 ‘Car Travel – Company owned’

** Prior to 2010/11, Radiative Forcing was not considered in the methodology for determining air travel CO2 emissions. Including Radiative Forcing is considered best practice and has been included this year.

*** Double counting occurred in 2010/11. This equated to 22.16 tonnes of extra offsets purchased. bankmecu included and offset emissions for printed statements and letterhead which were also being offset by Vega, the Bank’s print provider.

**** Vega – includes the printing process for marketing materials and the emissions from paper used through Vega, a 100 per cent carbon offset print provider.

***** A calculation error was identified in total GHG emissions recorded in 2010/11 resulting in a shortfall in offsets purchased of 84.59 tonnes. This amount was purchased with 2011/12 offsets to rectify the error.

bankmecu’s total greenhouse gas emissions have increased by 1 per cent since 2009/10. The increase is attributed to the inclusion of additional emissions in bankmecu’s emission profile from 2010/11. Total greenhouse gas emissions per FTE increased by 7 per cent during the same period, largely as a result of FTE figures dropping from 313.48 to 296.46. Both total greenhouse gas emissions and emissions per FTE have decreased since 2010/11 due to ongoing efficiency measures.

Greenhouse gas emissions (CO2-e tonnes) by Scope

Note: bankmecu’s CO2 emissions are calculated through an emissions accounting tool, EASE, provided by OMG Equilibrium. Calculations are based on the GHG Protocol.

Energy consumption

EMS target: Increase energy efficiency per m² by 5 per cent by 2014/15 relative to 2009/10 levels.

bankmecu recognises the importance of energy efficiency in reducing the greenhouse gas impacts on climate change and the increased resource consumption arising from population growth. bankmecu monitors energy consumption (electricity and gas) at bankmecu owned and leased service centres where possible.

Electricity consumption 
  2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference b/w 2010/11 & 2011/12 Difference b/w 2009/10 & 2011/12
Electricity consumption (kWh) 1,233,254  1,394,905 1,517,882 1,008,732 884,096 861,633 899,596 –12% –19%
kWh/FTE  4,160  4,538 4,842 4,492 4,678 4,727 4,691 –8% –14%
kWh/m2 181 158 172 - - - - 15% 5%
CO2 1,614 1,841 1,997 1,319 1,150 1,070 1,224 –12% –19%
CO2/m2 0.24 0.21 0.23 - - - - 14% 4%
$ (NET) 301,191 295,878 268,354 - - - - 2% 12%

Note: figures based on square meters are indicative as some service centres have unknown areas and some are not separately metered. In 2011/12 only one service centre in Colac, which closed down, is missing an area and one site is not separately metered (unknown kWh).

bankmecu’s overall electricity consumption decrease can largely be attributed to refurbishment and IT efficiency measures across bankmecu sites.

Electricity consumption has increased per square meter because there were more service centres with unrecorded areas and recorded kWh.

bankmecu’s Head Office has solar panels and energy saving tips were provided to staff through Footprints.

IT efficiency measures

Throughout 2011/12 the implementation of a new POE (Power over Ethernet) communication switch saw a significant reduction in the number of switches used across the organisation.

Utilising POE, a single communications port carries both voice and data (phone and PC), effectively halving communication patching requirements. This in turn reduces the number of physical devices (switches) required to deliver the same service.

Example: Kew before/after POE 
Before POE After POE implementation
7 x data switches (non-POE) 4 x POE switches
11 x voice switches (Nortel POE)
2 x dedicated voice switch power supply units
1 x voice router
1 x voice modem

The switch manufacturers Cisco currently do not have an official energy rating for these products. However in the above example, 4 devices now perform the function of 22.

Below is a complete list of service centres upgraded to POE:

Adelaide Ballarat Bendigo
Brisbane CBD Brisbane West End Canberra
Castlemaine Eastland Echuca
Glen Waverley Kensington Kew
Moe Morwell North Ryde
Traralgon Watergardens  


A conservative estimated outcome from the upgrade would be a 50 per cent reduction in power consumption for communication switches.

Solar panels

In June 2008 bankmecu received a State Government grant for $48,180 to assist in the installation of solar roof panels at its head office. The system is rated to provide 10,000 kWh per year. bankmecu created an education display in the head office foyer area that displays details on electricity generated and CO2 savings made through this initiative.

Since installation in June 2008, the solar panels at the head office have generated 57,301 kWh. This equates to a total CO2-e saving of 30,648 kg.

CO2-e saved 
Period kWh CO2-e Reading date
June 2008 – 30 June 2009 17,768 9,417 29 June 2009
1 July 2009 – 30 June 2010 13,527 7,169 28 June 2010
1 July 2010 – 30 June 2011 12,206 6,462 27 June 2011
1 July 2011 – 30 June 2012* 13,800 7,600 30 June 2012
TOTAL 57,301 30,648  

*Recorded figures are low following replacement due to faults with the inverters and data recording.

Due to faulty installation, the capacity of the original solar panels to generate power decreased after installation. As a result, the solar panels were replaced by the installer Origin in July 2011.

The first installation was made up of 100 x 100-watt panels which was replaced with 48 x 225-watt panels and is the maximum allowable for a commercial installation.

Gas consumption 
  2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference b/w 2010/11 & 2011/12 Difference b/w 2009/10 & 2011/12
Gas consumption (MJ)* 1,347,355  1,556,537 1,216,974 857,382 694,115 462,968 500,000 –13% 11%
MJ/FTE  4,545  5,064 3,882 3,818 3,673 2,540 2,607 –10% 17%
MJ/m2 436.68 504.47 394.42 - - - - –13% 11%
CO2 74.82 86.36 67.89 49.08 39.77 26.53 31.7 –13% 10%
CO2/m2 0.02 0.03 0.02 - - - - –33% 0%
$ (net) 17,017  18,586 16,576 - - - - –8% 3%

*Figures from 2009/10 include Kew, Canberra, Bendigo, Mildura and Kyneton. In the years prior, figures only included Kew Head Office.

Gas consumption decreased by 13 per cent compared to 2010/11. This can be attributed to turning gas services off during the summer months at various service centres, including the addition of Mildura service centre this year. Consumption decreased mainly at Kew, Bendigo and Kyneton.

However, gas consumption has increased since 2009/10 by 11 per cent because gas was on for longer at the start of summer in 2011/12 compared to 2009/10.


bankmecu recognises the impact transport has on the environment and monitors performance to manage this aspect of bankmecu’s operations. Motor vehicle and air travel are the primary modes of transportation used by bankmecu employees for the purpose of business-related travel.

In 2011/12 bankmecu implemented or continued the following travel reduction activities:

  • eco Drive training which is included in the induction process for all new employees
  • eco Drive tips are provided on the intranet for staff perusal
  • public transport ticket are available to staff working at Head Office for business-related trips
  • staff and customers at Head Office have access to a bike rack to encourage the use of bicycles
  • bankmecu advances up to $1000 a year for the purchase of a public transport ticket or bicycle to be used as transport to work, to be paid off by staff over 26 pay periods
  • a Car Pooling Register is available on the intranet for employees who wish to share the drive to work with colleagues in their local area; and
  • awareness raising through Footprints initiatives. For example, providing information to staff on the negative impacts of cars and the positive impacts of alternative modes of travel.
Car travel

EMS target: Reduce carbon emissions from road vehicles used for bankmecu administrative operations per FTE by 5 per cent by 2014/15, relative to 2009/2010 levels. 

  2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference b/w 2010/11 & 2011/12 Difference b/w 2009/10 & 2011/12
Kilometres (km) 385,801 431,139 352,432 223,722 176,539 208,829 206,011 –11% 9%
Km / FTE    1,301 1,403 1,124 996 936 1,146 1,074 –7% 16%
CO2 73.34 117.36 72.07 46.44 39.55 47.55 46.9 –38% 2%
Total cost ($) 71,142 - - - - - - - -

 Note: Petrol costs include costs associated with business mileage provided for company owned job needs and pool car vehicles only, not salary packaged cars or mileage in personal cars claimed through Human Resources and payroll.

Overall business-related car travel decreased by 11 per cent compared to 2010/11. This represents a contraction following increased activity due to expanded operations in 2010/11. However, overall car travel has increased per FTE by 16 per cent since 2009/10.

The increase since 2009/10 can largely be attributed to the fact that business use mileage from packaged cars was not included prior to 2010/11. In previous years only job needs vehicles were measured, i.e. pool cars and personal cars used for business purposes. This is in addition to expanded operations, while experiencing a drop in FTE numbers post merger consolidation. bankmecu will revise its EMS target in light of these factors.

bankmecu’s Vehicles Policy addresses the purchasing and use of Company-owned vehicles. New pool vehicles purchased must be manufactured in Australia and meet a minimal greenhouse rating of seven and a half, for metropolitan car travel, or five for regional trips or carrying larger loads, as specified by the Federal Government’s Green Vehicle Guide. They must also have a minimum safety rating of three stars, as specified by the Australian New Car Assessment Program.

Air travel 
  2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference b/w 2010/11 & 2011/12 Difference b/w 2009/10 & 2011/12
Kilometres (km) 517,141 497,630 369,639 453,807 314,464 483,506 227,275 4% 40%
Km / FTE    1,744 1,619 1,179 2,021 1,667 2,652 1,185 8% 48%
CO2 173.79 174.12 147.65 47.91 62.02 39.46 53.95 0% 18%
Total cost ($) 153,632 - - - - - - - -

In 2011/12 there was an increase in the number of flights taken by bankmecu staff, management and Directors, increasing overall air travel by 4 per cent. This is attributed predominately to more interstate travel being taken as a result of expanded operations.

Water consumption

EMS target: Reduce water consumption per FTE by 5 per cent at bankmecu by 2014/15, relative to 2009/10 levels.

bankmecu recognises the importance of water conservation, given the impacts of climate change and population growth leading to increased water scarcity. As a result, bankmecu monitors water consumption at bankmecu owned and leased service centres where possible.

Annual water consumption 
  2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 Difference b/w 2010/11 & 2011/12 Difference b/w 2009/10 & 2011/12
Water consumed (m3)*  2,811 1,232  1,745 891 786 1,225 1,055 128% 61%
m3 / FTE 9.48 4.01 5.57 3.97 4.16 6.72 5.50 137% 70%
m3/m2  0.62 -  - - - - - - -
$ (NET)  $6,197  $2,690 $2,663 - - - - - -

 Note: Water consumption per full-time equivalent (FTE) is based on the total FTE figure for bankmecu.

* 2011/12 data includes water consumption from Kew, Moe, Morwell, Kensington, Traralgon, Bendigo, Ballarat, Colac (closed August 2011) , Maryborough, Echuca, Kyneton, Sunbury, Castlemaine.

2010/11 data includes water consumption from Kew, Moe, Morwell, Kensington, Toowong (sold October 2010), Traralgon, Lilydale (closed August 2010), Croydon (sub-let December 2010), Clayton (closed August 2010), Bendigo, Ballarat, Colac, Maryborough, Echuca, Kyneton, Sunbury, Castlemaine.

2009/10 data includes water consumption from Kew, Moe, Morwell, Kensington, Toowong, Traralgon, Lilydale, Croydon, Clayton, Bendigo, Ballarat, Colac, Maryborough, Echuca, Kyneton, Sunbury, Castlemaine.

In 2008/09 data included water consumption from Kew, Moe, Morwell, Kensington and Toowong.

From 2005/06 to 2007/08, data only included water consumption from Kew and Moe.

Suppliers’ invoices are used to determine water consumption at bankmecu owned and operated service centres. Echuca’s consumption is apportioned based on 40 per cent usage as per the lease agreement. Maryborough’s water consumption is not separately metered; it is split between tenants.

Water consumption increased significantly in 2011/12 and has increased by 70 per cent per FTE since 2009/10. The increase can be attributed to several issues:

  • Leaks were identified at bankmecu’s Moe and Maryborough service centres, which went undetected for some months.
  • Sandblasting took place at Moe to clean the building’s back wall and stairs before re-painting.
  • bankmecu is not being separately metered for water usage at its Maryborough service centre. The premises was formerly used by bankmecu and one other tenant. There are now three other tenants in addition to bankmecu and total water consumption has increased as a result of this. Rectification of this issue is being sought.

bankmecu has been able to sustain low water usage at its head office as a result of the installation and use of a rainwater tank since 2007/08.

Rainwater tank

In 2007/08, bankmecu installed a 33,880-litre rainwater tank at its head office. bankmecu worked with a tank supplier to ensure water storage volume for the land area available was maximised. Captured rainwater is used for toilet flushing and garden watering. Since installation in March 2008, the rainwater tank has supplied 1,204,154 litres of water.

Water use 
Period Litres Reading date
March 2008 – 30 June 2009 175,692 29 June 2009
1 July 2009 – 30 June 2010 297,976 28 June 2010
1 July 2010 – 30 June 2011 402,729 27 June 2011
1 July 2011 – 30 June 2012 327,757 25 June 2012
TOTAL 1,204,154  

Initiatives to reduce water consumption in 2011/12 included Footprints-initiated awareness emails to staff about water saving measures and government rebates for water efficiency improvements in the home, for all states and territories where bankmecu staff reside.


EMS target:

Reduce waste arisings by 5 per cent by 2014/15, relative to 2009/2010 levels.

Increase recycling figures by 5 per cent of waste arisings by 2014/15, relative to 2009/2010.

bankmecu recognises that overconsumption and waste to landfill are significant environmental issues – both in use of limited resources and impact of disposal. bankmecu monitors waste across its service centres in an effort to understand bankmecu’s waste streams and implement initiatives to minimise waste sent to landfill.

Waste to landfill and recycled waste 
  2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 Difference b/w 2010/11 & 2011/12 Difference b/w 2009/10 & 2011/12
Landfill waste (Head Office)
11.7 8.19 3.51 0.86 2.83 3.83 43% 233%
Landfill waste (Head Office)/FTE
0.14 0.09 0.04 0.01 0.03 0.04 56% 250%
Landfill waste (other)
20.45 20.73 20.53 4.18 4.2 4.22 –1% 0%
Landfill waste (other)/FTE
0.15 0.09 0.07 0.03 0.04 0.04 67% 114%
Landfill total
42.05 28.92 24.04 5.04 7.03 8.06 45% 75%
0.14 0.09 0.08 0.02 0.03 0.04 56% 75%
Recycled waste (Head Office)
4.38 6.87 6.04 5.86 7.26 7.27 –36% –27%
Recycled waste (Head Office)/FTE
0.05 0.08 0.07 0.06 0.08 0.07 –38% –29%
Recycled waste (other)
10.57 13.09 20.84 2.15 1.15 2.67 –19% –49%
Recycled waste (other)/FTE 0.08 0.06 0.07 0.02 0.01 0.02 33% 14%
Recycled total
19.56 19.97 26.88 8.01 8.41 9.94 –2% –27%
0.07 0.06 0.09 0.04 0.04 0.05 17% –22%

 Note: The FTE figure for waste excludes casual employees

Waste figures across all bankmecu service centres in 2011/12 were extrapolated from sample data gathered from bankmecu service centres employing more than four employees. Sample data came from Ballarat, Bendigo, Casltemaine, Kew, Mildura, Moe, Morwell and Traralgon.

Prior to 2009/10, a total waste figure was estimated for sites with more than four employees and divided by all FTEs (including those staff in service centres with less than four employees) giving an inaccurately low figure. bankmecu now estimates waste to landfill and recycling figures for all FTEs across bankmecu based on sample data to assist in determining more accurate Scope 3 emissions. As a result, total landfill and recycling figures increased from 2009/10.

Total waste generation, including recycled material and waste to landfill, increased by 26 per cent compared to last year.

The ratio of waste to landfill versus recycled material shifted from 59 per cent landfill and 41 per cent recycled material to 68 per cent landfill and 32 per cent recycled. This is largely attributed to an increase in waste to landfill recorded at Kew Head Office. Kew Head Office is undergoing a major refurbishment.

Waste to landfill versus recycled material

Initiatives to reduce waste generation and increase recycling in 2011/12 included:

  • recycling training, which is included in the induction process for all new employees.
  • battery collection points at bankmecu’s Head Office and at bankmecu’s call centre in Moe (the two largest staff-occupied buildings) and awareness initiatives by email about the importance of battery recycling.
  • mobile phone recycling at all service centres.
  • paper, cardboard, toners, plastics, glass, aluminium, liquid paperboard, and steel container recycling systems.
  • excess electronic equipment donation to the not-for-profit organisation Computerbank. bankmecu pays a small fee to have this organisation collect the equipment. Computerbank then either recommissions this equipment, offering it to disadvantaged groups/communities where appropriate, or disposes of it in a responsible way.
  • Keepcup campaign to replace the need to use disposable coffee cups.
  • awareness emails informing staff about what can and can’t be recycled; and the impacts of using bottled water.

Supply chain management system

EMS target: For all new partnerships to be assessed against environmental and social criteria by June 2012.

bankmecu developed a supply chain management system as an outcome of implementing an Environmental Management System (EMS) in 2010/11.

bankmecu recognises supply chain as a challenging area in terms of utilising products for business purposes with minimal environmental and social impact, while balancing budgetary and contractual constraints.

bankmecu made a commitment to develop a supply chain management system as an outcome of implementing its EMS. In 2010/11 bankmecu revised its Procurement Policy and Procedure to include specified sustainability criteria when engaging potential new suppliers. Where the Procurement Policy requires due diligence, a supplier will now be assessed for sustainability performance in any Request for Proposal (RFP) questionnaire by a minimum of two people using an internal evaluation form.

The RFP questionnaire requires the supplier to respond to various questions related to three key areas:

  • Profile and Governance
  • Capacity and Continuity
  • Environmental and Social Impact

Scores are based on how well the respondents answer the questions.

bankmecu’s major environmental supply chain impacts are linked to the use of office equipment and supplies, printed materials and service centre refurbishments.

bankmecu recognises there is more work to be done in terms of engaging and influencing smaller suppliers.


Printers and photocopiers

bankmecu continues to upgrade printers and photocopiers with duplexing capabilities.

bankmecu continues to expand the use of scanning and other electronic processes instead of paper. bankmecu is also encouraging Cuscal to move away from faxes to email or online portals for a number of direct entry and chequing/follow-up processing.

General office paper

In 2011/12 bankmecu purchased 3965 (2010/11: 3881) reams of paper for office use, equating to 1,982,500 (2010/11: 1,940,500) sheets in total or 6,687 (2010/11: 6,313.44) sheets per employee or 13 reams per employee (2010/11:12.63 ). Paper usage increased 2.16 per cent compared to 2010/11. This is attributed to staff brand changes resulting from mecu becoming a bank.

Of bankmecu’s purchased paper, 8.6 per cent had 100 per cent recycled content, 90.8 per cent had 80 per cent recycled content and 0.6 per cent had 50 per cent recycled content.

Printed material

All printed material supplied through Vega press is printed on either ENVI 50/50 or Revive paper.

Disclosure documents, letterhead and anything else that is non-glossy is printed on ENVI 50/50. For brochures and most other marketing material Vega press uses Revive. Revive is a quality silk art paper made from 100 per cent recycled fibre, is FSC recycled certified and carbon neutral certified.

Vega use soy-based inks and their printing process is alcohol free. Their presses use water-based aqueous coating, an environmentally friendly alternative to UV coatings, and their state-of-the-art equipment results in more efficient printing. Link to Vega

Vega Press became 100 per cent carbon offset in 2009 and includes their Scope 3 emissions. This means Vega Press offsets the emissions generated from paper production as well as the print process.

Minimising paper sent to members

bankmecu customer statements are printed double-sided. In 2011/12 bankmecu continued to encourage customers to use electronic banking and the option for electronic statements rather than hard copies. The bankmecu customer newsletter is available electronically.

bankmecu also encourages customers to read the Product Disclosure Statements and other product and service information in electronic form rather than hard copy.

Key statistics:
  • hard copy letters sent to customers – 961,500, down 23 per cent from 2010/11
  • hard copy statements sent to customers – 1,972,799, up 4 per cent from 2010/11
  • sheets of paper per customer – 22.66, down 7 per cent* from 2010/11
  • total paper sent to customers decreased 7 per cent from 2010/11.
  • The decrease in paper sent to customers is attributed to more customers subscribing to electronic statements and receiving their statements via internet banking.
  • The number of hard copy statements to customers has increased because the number of active customers has increased by 7 per cent and the number of dormant customers has reduced by 3 per cent. In addition, a new credit card warning table has added half a page to all credit card statements.

*An error was found in the sheets of paper per customer figure reported last year. The figure was reported as 25.18 and should have been 23.49.

Payment of contracts

bankmecu actively monitors methods of payment. bankmecu is continuing to reduce paper waste by using Electronic Funds Transfer (EFT) where possible to make payments to creditors, rather than by cheque. bankmecu will continue to monitor and increase the use of EFT over cheque method where possible.

Payments by EFT 
% of Total payments made via EFT to: 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 Difference b/w 2010/11 & 2011/12
Creditors 74.41% 73.52% 73.45% 69.26% 65.00% 40.00% 1.21%
Invoices 78.03% 77.10% 73.32% 68.77% 63.00% 33.00% 1.21%

Creditors are suppliers the Bank pays via EFT, as opposed to cheque, as a per cent of all active creditors.

Invoices include the per cent paid via EFT, as opposed to cheque. The Bank can have several invoices a month for one particular creditor/supplier.


In 2011/12, 52.93 per cent of stationery purchases had a recycled content, an increase of 27.61 per cent from 2010/11. The increase is due to a rise in service centres using more recycled content products following conversion to a preferred product list across all service centres.

bankmecu will continue to work with supplier Office Max to increase the percentage of Australian-made products with low environmental impact supplied to bankmecu, where it is financially feasible to do so.


bankmecu recognises the potential efficiency savings and responsible resource use opportunities for any building works undertaken across bankmecu service centres, by incorporating environmental and social considerations.

During 2011/12, bankmecu refitted and refurbished its Bendigo Service Centre and administration area using sustainable practices and materials wherever possible.

In addition bankmecu upgraded the air-conditioning system at Morwell and refurbished the second floor (previously sub-let) to accommodate national lending centre staff and a disaster recovery centre.

Examples of environmental considerations 
Item Environmental consideration
Carpets All carpet laid throughout the premises was made of post consumer recycled content.
Floors All floors were made from renewable materials with no volatile organic compounds (VOCs) and with natural antibacterial qualities.
Walls Eco Panel divider walls were made of recycled plastic.
Timber All timber used was eco-ply from sustainable forests.
Joinery All joinery was made of ‘eco-ply’ plywood, which is made from off-cuts from sustainable plantation grown timber.
Glue All glue used was low in volatile organic compounds (VOCs), which means reduced impact on the environment and human health.
Paints All paints were water-based and low in VOCs.
Furniture All loose furniture was either recycled or recyclable with a green star rating.
Lighting Energy efficient lighting.
Contractors Locally sourced.

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