Development Education Program 2012 David Gilbert General Manager - SECU

1. Development Education Program 2012David GilbertGeneral Manager - SECU Cockatoo Island - Sydney

2. Content About SECU Strengths and weaknesses of SECU How SECU helps its various communities The current market – SECU’s perspective The future for SECU

3. 1. About SECU - cont

4. 1. About SECU - cont Credit Union office. Around 350 Shell Employees on site

6. 1. About SECU • Industrial based CU that was started back in 1963. It was originally called the Clyde Employees’ CU up until the early 80’s when it changed its name to the Shell Employees’ CU (SECU). • One Branch, One ATM and employs 9 staff (approx. 6FTE). Currently we have 10 Directors/Associates on the Board. • Exceeds the prudential performance indicators and “punches” above its weight

7. 1. About SECU - cont • SECU is the 2nd Smallest CU by membership within the MMD (movement marketing database) of which there are 89 mutual ADI’s. SECU ranks top 10 on member value. • SECU has 1820 members and assets of $50 million. • We are a very small operation with a simple product range with and a KISS method approach to most offerings. We don’t try to be all things to our members SO WHY ARE WE STILL GOING?

8. SECU staff

9. Strengths of SECU • We are an Industrial based CU. This helps in a number of ways • Easier to have a relationship with a common bond. Both employees’ and the host work with the CU – can be an easier engagement (need to work on constantly) • Members are employed. These members are well paid • Lower delinquency due to industrial bond • One branch operation and low staff numbers • High average balances and low membership creates cost efficiency.

10. Strengths of SECU Cont. • Big isn't always better. Being small we can make changes, correct issues and adapt quickly • Being simple – keeps complexity down and helps in a number of areas – training, staffing, implementations • Service/member centric – being small allows staff to know members by name • Low staff turn over – retention of knowledge • Its never been about being the Biggest or the Best – but being there for the members.

11. Key Stats of SECU Solid stats with membership numbers being the no1. issue. This is an industry wide issue that needs to be addressed

12. Weaknesses of SECU • Being industrial has some draw backs • Being close to members can be seen as unprofessional. • Risk by association – what Shell does can reflect us • Risks around concentration. Upset a few members and Chinese whispers can be damaging. • New member growth – or lack of • Aging membership • Relevance to membership overtime.

13. Weaknesses of SECU Cont. • Competition is relentless – impossible to be the best rate or fee. • Rate sensitive market/ membership (people with more average savings etc. tend to expect more) • Size can play against the CU with resourcing , skill sets, products and negotiating with suppliers. It can be frustrating when limited by resources

14. How SECU helps its various communities • Communities within • Shell HR department. Assisting with Financial planning, hardship, budgeting, staff movements. We aim to make it easier for the HR department • Women's network group. Facilitate meeting onsite. • Onsite counsellors – get feedback on areas where members are under pressure • Members – Budgeting, hardship etc. Being small and intimate allows us some freedom

15. How SECU helps its various communities • Communities outside • CUFA – All staff contribute to the village entrepreneur scheme. The CU donates to CUFA. The CU, if possible, gets involved with CUFA programs (if time permits I will show the CUFA Fijian leadership challenge slide show) • Various charities – We regularly donate to the Cancer council, Lions Club, Endeavour foundation (disable persons), Burnside (abandoned children), Salvation army. • Adhoc – members will approach the CU from time to time with a particular fundraiser.

16. The Current Market – SECU’s view • Competition will continue – placing pressure on all that SECU does. This covers products, product pricing etc. • The use of the “Mutual Bank” will help some. I still hold the view that the use of the Mutual Bank tag will create confusion and a fracture in the Credit Union/Mutual market • Mid sized to small Credit Unions that don’t have any affinity (i.e. community based) will continue to struggle. Smaller and niche type CU’s that stay relevant and have a relationship with members will continue.

17. The Current Market – SECU’s view • Regulators need to give some concessions to the Mutual market for example – Capital issues, franking credits etc. Recognition that we are different to the normal business model would help. • Member/consumer expectations will continue to increase – regardless of our position in the market. We need to accommodate – be relevant or slowly disappear.

18. SECU’s future and the CU Market • SECU is about to enter into its most tumultuous period since it began. The Refinery is going to cease to operate and 300 Shell Employees will lose their jobs. • Working hard with all stakeholders – Shell, Members, APRA, staff and others to ensure that people are clear • Surveyed the members - 90% remaining with CU, 8% unsure at this stage, 2% will close their account and move.

19. SECU’s future • We will continue to look after the existing members – whilst looking at some opportunities locally. • Business / relationship development officer working hard to open up some opportunities. • We have increased product take up, loan fundings, and last year membership increased (rather than decreased) • Positive signs – but we need to continue to work hard • The future is exciting with new challenges ahead.

20. Thank you & questions My Details are:Email: dgilbert@shellcu.com.auphone: 02 9897 8777