Auswide Bank
Annual Report 2015

A SOLID PLATFORM  
FOR FUTURE GROWTH 
2015 ANNUAL REPORT

CONTENTS

Performance Highlights  

Australia’s Newest Bank 

Chairman’s Report 

Managing Director’s Report 

Strategic Direction 

Shareholder Value 

Retail Banking 

Business Banking 

Third Party Mortgage Broker Alliances 

Our People 

Technology Investment 

Community 

Risk and Compliance Culture 

Board of Directors  

2

4

6

8

11

12

15

16

19

20

23

24

27

28

Leadership Team 

Directors’ Statutory Report  

Auditor’s Independence Declaration 

Consolidated Statement of Profit or  

Loss and Other Comprehensive Income 

Consolidated Statement of Financial Position 

Consolidated Statement of Cash Flows 

Consolidated Statement of Changes in Equity 

Notes to the Consolidated Financial Statements 

Directors’ Declaration 

Independent Auditor’s Report 

Corporate Governance Summary 

Shareholder Information 

Financial Glossary 

30

32

44

45

46

47

48

50

88

89

91

93

96

PERFORMANCE HIGHLIGHTS 

Auswide Bank’s improving financial performance in 2014/15 was supported 
by significant progress in strengthening and repositioning the business.

LENDING 

HOME LOAN SETTLEMENTS
60
60
60

50
50
50

40
40
40

30
30
30

20
20
20

10
10
10

0
0
0

.

.

,

.
,

5
9
5
0
9
5
4
9
0
9
4
0
5
9
4
9
9
5
9
9
,
,
5
1
9
3
9
,
$
9
1
3
,
1
$
3
$

,

.
,

1
6
.
1
5
6
8
1
.
5
6
0
8
5
6
0
8
3
0
6
8
3
6
9
8
3
4
9
8
$
4
9
$
4
$

,
,

,

,

Jul
Jul
Jul

.

2
8
2
2
8
2
3
.
2
8
1
,
3
.
5
2
1
2
3
,
5
9
1
2
,
,
5
0
9
2
3
9
0
$
3
0
$
3
$

,

,

.

.

8
9
8
3
9
8
4
9
3
9
4
.
,
3
1
9
1
4
,
7
9
1
,
1
5
,
1
7
3
1
,
5
$
7
3
,
5
$
3
$

Aug
Aug
Aug

.

2
9
2
4
9
2
8
.
9
4
7
,
8
.
2
4
7
0
8
,
2
2
7
0
,
,
2
2
2
0
2
2
$
2
2
2
$
2
$

,

,

1
0
1
.
3
0
7
1
.
0
3
2
,
7
.
5
3
2
2
7
,
5
2
2
2
5
2
2
4
2
2
2
$
4
2
$
4
$

,
,

,

,

Sep
Sep
Sep

.

8
0
8
6
0
8
9
.
0
6
7
,
9
.
1
6
7
5
9
,
4
1
7
5
,
,
0
1
4
5
3
0
4
$
3
0
$
3
$

,

,

.

.

,

.
,

5
3
5
8
3
5
5
8
3
0
5
8
9
0
5
9
9
0
4
9
,
,
9
1
4
3
9
,
$
1
4
3
,
1
$
3
$

,

.
,

1
9
.
1
9
9
6
1
.
9
9
2
6
9
4
2
6
2
4
2
5
2
4
8
5
2
2
8
5
$
2
8
$
2
$

,
,

,

,

.

.

2
6
2
9
6
2
8
9
6
2
8
.
,
7
9
2
7
8
,
4
7
2
7
,
,
1
7
4
3
7
,
$
1
4
3
,
1
$
3
$

.

.

.
,

8
8
8
4
8
8
2
4
8
8
2
4
0
8
2
1
,
8
0
0
,
1
,
0
2
0
3
1
,
0
2
$
3
2
$
3
$

,

6
2
6
.
1
2
1
6
.
3
1
2
,
1
.
6
1
3
3
1
,
6
3
8
3
6
8
8
3
3
8
8
$
3
8
$
3
$

,
,

,

,

Oct
Oct
Oct

Nov
Nov
Nov

Dec
Dec
Dec

,

.
,

7
5
7
.
6
5
7
3
.
6
5
2
3
6
4
2
3
0
4
2
8
0
4
2
8
0
3
8
2
$
3
2
$
3
$

,
,

,

,

,

7
7
.
7
3
7
6
7
.
3
8
7
6
.
,
3
9
8
6
8
9
8
0
8
9
3
0
8
3
0
3
$
3
3
$
3
$

,
,

,

,

Jan
Jan
Jan

1
6
.
1
9
6
1
1
.
5
9
6
,
1
.
0
9
5
2
1
,
0
5
2
2
0
8
2
2
2
8
2
$
2
8
$
2
$

,
,

,

,

.

.

.
,

2
5
2
8
5
2
9
8
5
4
9
8
5
4
9
7
,
5
3
4
7
,
,
2
5
3
3
7
,
2
3
$
3
2
$
3
$

,

.

.

0
0
0
8
0
0
2
0
8
8
2
.
,
7
8
8
0
2
,
7
0
8
0
,
,
7
4
0
0
4
0
4
$
4
4
$
4
$

,

,

.

.

6
8
6
3
8
6
3
3
8
9
3
.
,
7
3
9
1
3
,
7
7
9
,
1
2
,
7
7
3
1
,
2
$
7
3
,
2
$
3
$

.

.

.
,

2
8
2
2
8
2
2
2
8
4
2
2
8
4
2
2
,
8
4
1
,
,
2
8
8
1
2
2
,
8
$
1
,
2
8
$
2
$

4
7
.
4
2
7
7
4
.
3
2
7
7
,
.
9
2
3
4
7
,
9
3
3
4
9
5
3
4
3
5
3
$
3
5
$
3
$

,
,

,

,

1
0
1
.
3
0
9
1
.
0
3
5
9
.
,
3
1
5
7
9
,
0
1
5
7
,
,
9
1
0
7
3
,
9
0
$
3
9
$
3
$

,

5
1
.
5
0
1
9
5
.
0
9
1
.
9
,
0
7
9
3
9
,
7
6
9
3
,
,
7
2
6
3
3
6
2
$
3
2
$
3
$

,

,

.

.

.
,

9
2
9
6
2
9
6
6
2
2
6
6
0
2
6
3
,
0
2
1
,
,
3
8
0
1
2
3
,
8
$
1
,
2
8
$
2
$

.
,

7
5
7
.
9
5
5
7
.
9
4
5
5
9
2
4
5
7
,
4
2
4
7
,
,
3
2
4
4
7
,
3
4
$
4
3
$
4
$

,

Feb
Feb
Feb

Mar
Mar
Mar

Apr
Apr
Apr

May
May
May

Jun
Jun
Jun

2013/2014: $365,183,721.72
2013/2014: $365,183,721.72
2013/2014: $365,183,721.72
2014/2015: $450,518,974.58
2014/2015: $450,518,974.58
2014/2015: $450,518,974.58

LOANS PORTFOLIO

s
n
o

i
l
l
i

B

3.0

2.8

2.6

2.4

2.2

2.0

1.8

1.6

1.4

1.2

1.0

,

0
0
0
7
3
8
4
5
2
2
$

,

,

,

0
0
0
9
7
9
2
7
2
2
$

,

,

,

0
0
0
5
6
9
8
7
2
2
$

,

,

,

0
0
0
3
7
3
0
3
2
2
$

,

,

,

0
0
0
8
4
4
9
2
2
2
$

,

,

,

0
0
0
6
4
5
7
9
1
2
$

,

,

,

0
0
0
0
4
1
9
2
2
2
$

,

,

,

0
0
0
3
2
9
2
9
1
2
$

,

,

,

0
0
0
5
7
9
3
2
2
2
$

,

,

,

0
0
0
6
9
2
1
7
2
2
$

,

,

,

0
0
0
2
2
1
0
3
3
2
$

,

,

Jun
10

Dec
10

Jun
11

Dec
11

Jun
12

Dec
12

Jun
13

Dec
13

Jun
14

Dec
14

Jun
15

Home loan settlements increased 23.4% 
compared with 2013/14.

Auswide Bank’s loan book grew by  
4.8% to $2.33 billion.

LOANS ARREARS
LOANS ARREARS
LOANS ARREARS
LOANS ARREARS
50
50
50
50

LOANS ARREARS

m
m
$
m
$
m
$
$

40
40
40
40

30
30
30
30

20
20
20
20

10
10
10
10

0
0
0
0

$20.2
$20.2
$20.2
$20.2

$7.3
$7.3
$7.3
$7.3
$15.5
$15.5
$15.5
$15.5

Jun 14
Jun 14
Jun 14
Jun 14

$19.6
$19.6
$19.6
$19.6

$13.5
$13.5
$13.5
$13.5

$15.4
$15.4
$15.4
$15.4

$5.7
$5.7
$5.7
$5.7
$10.8
$10.8
$10.8
$10.8

Sep 14
Sep 14
Sep 14
Sep 14

$4.3
$4.3
$4.3
$4.3
$12.1
$12.1
$12.1
$12.1

$2.6
$2.6
$2.6
$7.9
$2.6
$7.9
$7.9
$7.9
Dec 14
Mar 14
Dec 14
Mar 14
Mar 14
Dec 14
Dec 14
Mar 14
30–60 days past due
30–60 days past due
30–60 days past due
30–60 days past due
60–90 days past due
60–90 days past due
60–90 days past due
60–90 days past due
Past due over 90 days
Past due over 90 days
Past due over 90 days
Past due over 90 days

$11.9
$11.9
$11.9
$11.9

$3.2
$3.2
$3.2
$7.2
$3.2
$7.2
$7.2
$7.2
Jun 15
Jun 15
Jun 15
Jun 15

Total loan arrears greater than 30 days past 
due have fallen from $87.9m in June 2013 to 
$22.3m in June 2015

2  /  ANNUAL REPORT

HOMELOAN ORIGINATION
HOMELOAN ORIGINATION
HOMELOAN ORIGINATION
HOME LOAN ORIGINATION

Regional QLD
Regional QLD
Regional QLD
29%
29%
29%

42%
42%
42%

58%
58%
58%

South East QLD
South East QLD
South East QLD
29%
29%
29%

First Party Direct
First Party Direct
First Party Direct

Third Party Broker
Third Party Broker
Third Party Broker

Home loan origination was in line with  
Auswide Bank’s target of 40% Third Party  
and 60% direct. 

FINANCIAL PERFORMANCE

SIX-MONTH AFTER TAX PROFIT/LOSS

NET INTEREST MARGIN
NET INTEREST MARGIN

DIVIDEND HISTORY

s
n
o

i
l
l
i

M

12

10

8

6

4

2

0

-2

-4

Jun
 10

Dec
 10

Jun
 11

Dec
 11

Jun
 12

Dec
 12

Jun 
13

Dec
 13

Jun 
14

Dec
 14

*

* after impairement of investment in 
financial planning business

1.90

1.85

1.80

1.75

1.70

1.65

1.60

30

20

10

Jun 13

Dec 13

Jun 14

Dec 14

Jun 15

Calculated as the interest revenue or expense and average 
interest rate on the average monthly balance of interest 
earning assets and liabilities

80

70

60

50

66c

63c

60c

60c

60c

51.5c

40

42c

s
t
n
e
C

47.5c

17c

30c

28c

05

06

07

08

09

10

11

12

13

14

15

Underlying cash net profit after 
tax for the chief entity rose by 
7.4% to $13.104m.

Net Interest Margin increased 
to 179 basis points in spite of  
a competitive lending market.

Total 2014/15 dividend was  
30 cents per share, an increase 
of two cents.

SHARE PRICE HISTORY

6.2

6.0

5.8

5.6

5.4

5.2

5.0

4.8

*

*$5.36 – 7th September 2015

Jul 14

Aug 14

Sept 14

Oct 14

Nov 14

Dec 14

Jan 15

Feb 15

Mar 15

Apr 15

May 15

Jun 15

Jul 15

Aug 15

Sept 15

AUSWIDE BANK 

/  3 

AUSTRALIA’S NEWEST BANK

On 1 April 2015, we celebrated a significant 
achievement by becoming Australia’s newest 
bank. Auswide Bank is Australia’s tenth and 
Queensland’s third bank trading on the Australian 
Stock Exchange. The change followed shareholder 
approval on 20 January 2015 and Australian 
Prudential Regulation Authority (APRA)  
consent on 5 February 2015. 

Our new name was supported by a new corporate  
identity and full rebranding, with roll out commencing on  
1 April across the business including branches, online  
and digital channels, and products and services.  
The rebranding was well accepted by shareholders, 
employees and customers alike and has reinvigorated  
our business. Our new branding is building greater 
awareness and supporting our new customer proposition 
as a national bank. 

The new brand is also helping to create shareholder value. 
The Auswide Bank name complements our strategy to 
support our core business in Queensland while expanding 
our presence and acceptance Australia-wide through third 
party relationships, online and digital channels, and our 
business banking network. The change has been a major 
step which will help Auswide Bank grow its markets and 
diversify its business model. 

4  /  ANNUAL REPORT

AUSWIDE BANK 

/  5 

CHAIRMAN’S REPORT

Last year we continued to 
build solid foundations for 
the future. In many aspects, 
we continued to rebuild 
the Company and we are 
seeing improved business 
performance as a result.

I am pleased to report that Auswide 
Bank has delivered another improved 
financial performance in the 2014/15 
financial year, with an underlying net 
profit after tax (NPAT) for the chief entity 
of $13.1 million. This result excludes 
one-off expense items of $516,000 in 
2014/15 for the rebranding and the 
writedown of assets relating to the 
outsourcing of the bank’s ATM fleet.

Statutory NPAT for the chief entity was 
$12.73 million, compared to the 2013/14 
figure of $12.96 million which included 
a one-off dividend of $750,000 from 
Mortgage Risk Management.

This improvement and the Company’s 
strong capital position have allowed the 
Board to declare a fully franked final 
dividend of 16 cents per share. This 
brings the total dividend for 2014/15 to 
30 cents per share, fully franked – an 
increase of two cents over 2013/14. 

This year marks the third year of our 
three-year Strategic Plan. The Board is 
pleased with what has been achieved 
since the announcement of the Plan in 
May 2013, although more work remains 
to be done. We are seeing the benefits 
of our hard work with the return to 
organic growth across many parts of the 
business for the first time in a number 
of years. 

Auswide Bank is gaining momentum 
following a year of significant 
achievement which included the 
approval of our banking licence by 
the Australian Prudential Regulation 
Authority (APRA) – an exciting 
milestone which represents growth 
and opportunity. Supported by a full 
rebranding across every aspect of the 
Company, our banking licence and new 
name now fully align with our strategy 
to build brand recognition and grow our 
national customer base.

We have continued to invest 
substantially in technology 
improvements across the Company,  
this year completing an upgrade of our 
core operating system. Our people are 
the key to our ongoing success and we 
have focused on building the capability 
of our employees through training and 
other initiatives. 

Following significant improvements 
made in 2013/14, we continue to 
remain focused on cost control and 
improving productivity. Delivery of 
the Transformation Project during the 
year enabled us to identify significant 
productivity improvement opportunities 
to operating practices across the 
business. We are currently implementing 
the recommendations made in January. 
This focus on transforming the business 
to be more productive and efficient has 
been well accepted by our staff and has 
also supported our shift to a better risk 
and compliance culture. 

In line with our strategic priorities, our 
mortgage broker division continues to 
perform strongly and we are seeing 
improvements in our business banking 
division as we work to develop stronger 
ties to the local communities we operate 
within. Our ongoing investment in our 
retail banking division is paying off, 
with the segment seeing growth during 
the year across its home loan book and 
personal loan products. 

6  /  ANNUAL REPORT

The progress in implementing our 
business strategy has also been 
reflected in the revised outlook for 
Auswide Bank that was issued by 
Standard & Poors in June 2015.  
The credit rating agency cited a number 
of elements of the strategy including 
significant investment in information 
technology, re-balanced distribution 
channels and our rebranding, providing 
positive impacts for the Company’s 
growth prospects.

Board renewal continued to progress 
during the year. Peter Sawyer, a long-
standing Non-Executive Director and 
Chairman of Auswide Bank’s Audit 
Committee retired in March. On behalf 
of the Board, I thank him most sincerely 
for his contribution to the Company  
and wish him well for the future.  
Sandra Birkensleigh was appointed  
Non-Executive Director on 2 February. 
Sandra brings to the role extensive 
experience in financial services, 
particularly risk management, 
compliance and corporate governance. 

Our achievements this year would not 
have been possible without our strong 
management team and the efforts of all 
employees. Martin Barrett continues to 
lead a high performing team and during 
a year of such significant change, it is 
pleasing to see how staff have embraced 
the many changes and challenges we 
have experienced.

To my fellow Directors, thank you for 
your efforts and assistance during  
the year. 

I would also like to take this opportunity 
to thank our shareholders, customers, 
and business partners for your 
continued support. 

John Humphrey 
Chairman

AUSWIDE BANK 

/  7 

MANAGING DIRECTOR’S REPORT

It has been a year of 
substantial progress and 
momentum for Auswide Bank. 
I am pleased to report we 
have achieved organic growth 
across the Company for the 
first time in a number of years, 
consolidating the work we 
have undertaken since 2013  
to reposition Auswide Bank 
and build capability across  
the organisation.

Our conversion to Australia’s tenth listed 
bank in April was a significant milestone 
in our history. Our new name, Auswide 
Bank, links back to our previous name, 
Wide Bay Australia, which has helped 
ensure that the goodwill and recognition 
associated with our past is maintained. 
However, Auswide Bank better reflects 
our growing customer base across the 
country and aligns with our omni-channel 
strategy of expanding our presence and 
acceptance Australia-wide, via third party 
relationships such as mortgage brokers 
and through online and digital channels. 
While we remain committed to providing 
Australians with an alternative to the  
‘big banks’, we believe becoming a  
bank has opened up opportunities 
for growth and recognition in a highly 
competitive market.

Our progress in implementing the 
Strategic Plan has supported an 
improvement in financial performance.

•  Net Interest Revenue of  

$51.20 million, an increase of  
3.1% over the previous year

•  Chief Entity underlying NPAT  
of $13.10 million compared to  
$12.20 million in 2013/14

•  Home loan approvals of $449 million, 

up 8.5% over 2013/14

•  Total loan book up 4.8% to $2.33 

billion at 30 June 2015

•  Arrears (greater than 30 days past 
due) reduced to $22.3 million from 
$43.0 million in 2013/14

•  Total dividend of 30 cents per share,  

an increase of 2 cents or 7%. 

While we have experienced material 
improvements in arrears we are also 
better-positioned to identify credit  
risks, providing a strong foundation  
for the future. 

Strong capital position

During the reporting period, we made 
material progress towards winding up 
our captive lenders mortgage insurer, 
Mortgage Risk Management Pty Ltd 
(MRM). After the financial year end, we 
announced that MRM will be wound 
up on 30 September 2015, which will 
make available up to $10 million of Tier 
1 capital and considerably strengthen 
our regulatory capital position. The 
return of capital to Auswide Bank will 
allow the Board to consider a number of 
options including acquisition or merger 
opportunities, a special dividend for 
shareholders, as well as supporting 
ongoing lending growth in housing, 
consumer and business finance. Our 
capital position is the highest of the 
listed banks which allows us to avoid 
the cost of additional Tier 2 capital or 
the dilution created by on market equity 
raisings recently undertaken by some 
of our competitors. We believe this is 
beneficial to our shareholders.

8  /  ANNUAL REPORT

Diversified funding

We continued to diversify our sources 
of funding during the year through 
a combination of securitisation and 
ongoing deposit growth, and as a 
listed company we also have access 
to the equity capital markets. This was 
demonstrated by the level of investor 
support for Auswide Bank’s first Senior 
Unsecured Floating Rate Note which 
was issued after the reporting period 
on 19 August 2015. The issue was 
oversubscribed and raised $25 million  
in cost-effective funding for growth in 
loan portfolio.

Progressing our Strategic Plan 

As we implement the final phases of 
our three-year Strategic Plan, we have 
made measured investments in building 
the capability of our people, creating 
efficiencies across internal systems and 
processes, and improving the range of 
services for our customers. The substantial 
progress we have made to date has 
established a basis for sustained growth 
and progress, and we are seeing these 
benefits flow through the Company,  
to our customers and shareholders. 

Investment in technology is a key  
plank in the Strategic Plan, with a  
goal of delivering productivity and 
cost-to-income efficiencies in the 
short-term. In February, we upgraded 
Auswide Bank’s core operating system 
to Ultracs 4 – one of the most advanced 
and complete retail banking systems 
in the financial services software 
marketplace. The new banking system 
has improved customer service by 
reducing unnecessary administrative 
tasks and improving account opening 
and transaction times. 

Customer information is more readily 
available which enhances our ability to 
match the right products to meet our 
customers’ needs. This is enabling us 
to expand our range of products and 
services. Additionally, delivery of the 
Transformation Project during 2014/15 
is leading to significant productivity 
improvements across the business by 
streamlining and automating internal 
systems and processes to strengthen 
our quality assurance systems, and 
create cost and time efficiencies. 
This project has neared completion, 
with many recommendations now 
implemented. We will continue to invest 
in technology to deliver competitive and 
efficient products for our customers. 

Digital capability is a key component  
of our future. We anticipate launching 
even more online and digital services  
in the near future including online 
account opening, seamless online home 
and personal loan applications and 
improved online transactional capability.

Our investment also extends to  
ensuring a seamless and consistent 
customer experience, and this remains 
an ongoing focus. We are committed 
to delivering flexible and convenient 
banking services, accessible across 
a range of traditional and online 
platforms. Our significant investment 
in technological improvements now 
ensures customers can do business  
with us however and whenever they 
choose – online, digitally, through a 
broker, on the phone or in-person  
at one of our branches – and at all  
times receive outstanding customer 
service and relevant information about 
our products and services. 

In 2014/15, we tripled the training budget 
to deliver a number of new programs 
across the organisation. These included 
tailored programs to build the skills of 
our sales, collections and lending teams 
and e-learning platforms to ensure all 
employees can continue to access online 
training. We also invested in health and 
safety training for our people who we 
recognise are critical to our success as a 
leading financial institution. Our training 
investments complement our ongoing 
commitment to employ and retain the 
right people – those with a strong skills 
base and a natural fit with the friendly, 
customer-focused culture of our Company. 

Enhanced customer experience

We have embarked on a number of 
important projects to support our 
omni-channel marketing strategy and 
improve the overall customer experience. 
We have upgraded our fleet of ATMs 
with the latest available technology, to 
offer faster and upgraded capabilities. 
These are performing on average at 99% 
availability. In early 2015, we released 
a new mobile banking application and 
upgraded our website. This included a 
retail website with enhanced features 
and a corporate website which provides 
shareholders with a dedicated portal. 
Customer feedback confirms these are 
more modern and user-friendly, and in 
2016 we will introduce additional website 
functionality, enabling our customers to 
make loan applications and open new 
accounts online. This is an exciting time 
for Auswide Bank, giving us true national 
reach in the digital space and aligning 
with our new name and national brand. 

AUSWIDE BANK 

/  9 

MANAGING DIRECTOR’S REPORT 
CONTINUED

Balance sheet strength gives the 
Company the flexibility to consider 
appropriate consolidation opportunities. 
If a logical partner or prospective 
acquisition is identified, we will work  
to understand the benefits to 
shareholders and the Company and 
pursue those opportunities that align 
with our strategy

In 2015/16 we will continue to 
concentrate on being a positive 
disruptor in banking, offering products 
that are attractive and competitive to 
allow us to expand in traditional and 
new markets. As a smaller bank, we are 
nimble and quick to respond, providing 
true value for our customers, and we 
will continue to foster this. This is our 
difference. The changes we are making 
are benefiting Auswide Bank and our 
shareholders, but the DNA of our 
business remains. 

I would like to thank our staff, the Board, 
our shareholders and our customers for 
their invaluable support during the year. 

Martin Barrett 
Managing Director

To support our growing and changing 
customer base, we have significantly 
increased the capacity and functionality 
of our Bundaberg-based Contact 
Centre. While additional investment is 
planned for 2016, the Contact Centre 
now provides greater capability and 
enables Auswide Bank to engage 
regularly with more of our customers.

A central part of our rebranding to 
Auswide Bank is the roll-out of our 
branch refurbishment plan, creating 
a more modern look and customer-
friendly experience across our branch 
locations. Six branches moved to 
the new model during 2014/15 and 
additional branches have been identified 
for 2015/16 including Maryborough, 
Gympie and Bundaberg. While we strive 
to deliver a positive and consistent 
customer experience at all times, we 
also seek to maximise shareholder 
investment across our branch network 
and as a result some branches have 
been closed, amalgamated or relocated 
to provide more opportunity. We will 
continue to review the existing branch 
footprint to ensure it delivers a strong 
performance for both shareholders  
and customers. 

Community connections

Our connection to the community is 
important, and we are a significant 
contributor to the communities we 
operate in. In 2015 Auswide Bank 
launched its Community Grants Scheme 
to formalise our community sponsorship 
activities. The new scheme provides 
substantial financial assistance to 
valuable community initiatives while 
ensuring we leverage maximum value 
from these relationships.

Outlook 

In 2015, we were committed to building 
the organic capabilities of the Company 
and I am pleased that we have made 
substantial progress. In the year 
ahead, we will continue to build on the 
momentum we have created.

The historic low interest rate 
environment and intense competition 
are contributing to margin pressure 
across the banking sector. General 
economic conditions also continue to be 
challenging for our retail and business 
customers in our traditional markets 
in Central and Northern Queensland. 
We are confident though that we can 
overcome these challenges. It is evident 
from this year’s performance, that 
while we remain committed to serving 
regional Queensland, our strategies 
that support growth through third party 
relationships and an increased focus on 
the South East Queensland market are 
paying dividends. This includes a future 
intention to establish a central branch in 
Brisbane to support customers who live 
or do business in the city. Diversification 
and continued expansion into South 
East Queensland and southern capital 
cities is necessary to avoid over-
exposure to regional markets.

I am excited by the momentum we have 
achieved in 2015 and the opportunities 
ahead, as we continue to strengthen  
the foundations of the business, 
maintain our focus of attracting new  
and younger customers, and develop 
our technology platform to deliver a 
better customer experience. 

10  /  ANNUAL REPORT

STRATEGIC DIRECTION

We have made significant 
progress of our three-year 
Strategic Plan, delivered in 
May 2013. Since this time, 
we have made substantial 
investments in our people, 
technology and our products 
and services, building a 
strong platform for future 
growth and success. 

During the year, we demonstrated a 
clear commitment to deliver many of  
the key investments outlined in the 
Strategic Plan, including:

•  Significantly improving our risk and 

compliance culture

WE REMAIN COMMITTED 

TO CONTINUALLY 

IMPROVING OUR 

•  Growing our Third Party and Business 

PERFORMANCE FOR  

THE BENEFIT OF ALL 

OUR SHAREHOLDERS

Banking segments

•  Ongoing development and 

refinement of our products and 
services to ensure competitiveness

•  Enhancing technology and digital 
platforms to make it easier for our 
customers to do business with us 

•  Providing learning and development 

opportunities for our people

•  Continuing to invest in the local 
communities we operate in

•  Progressing the branch revitalisation 

program.

There is still work to be done, however 
we remain committed to continually 
improving our performance for the 
benefit of all shareholders. We will 
continue to leverage investments 
already made, and will outline the 
Bank’s strategic focus in a new  
Strategic Plan. 

AUSWIDE BANK 

/  11 

CENTRAL TO 

MAXIMISING VALUE FOR 

OUR SHAREHOLDERS 

IS OUR APPROACH 

TO DRIVING COST 

MANAGEMENT AND 

EFFICIENCY OUTCOMES 

ACROSS THE BUSINESS

SHAREHOLDER VALUE

A key Project finding was confirmation 
that our branch network was under-
utilised. Specifically, the Transformation 
Project allowed us to examine how 
we utilise our assets and personnel 
and enabled us to identify and align 
productivity opportunities and priorities 
to the Strategic Plan. 

Following the review of our operating 
practices, we introduced an online work 
management tool to enable us to use 
existing systems more efficiently and 
increase automation of back office tasks, 
processes and workflows. This low-cost, 
high capability management tool has 
enabled us to identify opportunities to 
improve productivity, efficiency and 
compliance. These improvements have 
reduced the cost base of our back office 
functions while improving efficiency and 
productivity to enable us to support a 
better customer experience. 

The Transformation Project has 
also helped improve the way we 
communicate internally and seek 
out information, while allowing us to 
centralise functions and re-design jobs, 
particularly in the back office, to create 
more meaningful roles for our people.

We have maintained a strong 
focus on balancing lending 
growth with the needs and 
demands of customers in a 
very competitive market. This 
risk management approach 
ensures our priority remains 
on the delivery of returns to 
our shareholders.

During the year we investigated a 
number of revenue opportunities.  
As part of this, we undertook a fee 
review across our portfolio of products 
and services. We also continued to 
develop and enhance products and 
services throughout the year.

Central to maximising value for our 
shareholders, is our approach to driving 
cost management and efficiency 
outcomes across the business. 
Key to this was the delivery of the 
Transformation Project which, using 
the Six Sigma Process, identified a 
significant number of opportunities for 
process and productivity improvements 
in operating practices across the 
organisation. Project findings 
were delivered in December, with 
recommendations made in January,  
which we are continuing to implement 
as resources become available.

12  /  ANNUAL REPORT

AUSWIDE BANK 

/  13 

14  /  ANNUAL REPORT

RETAIL BANKING

It has been a successful 
year for the retail banking 
segment, during which we 
have invested in resources  
to grow our sales volumes. 

We remain committed to significantly 
improving the customer experience to 
grow our customer base. We will achieve 
this by strengthening relationships with 
existing customers, maximising cross-
selling opportunities, and reviewing 
our customer retention and advocacy 
strategies. We are seeing considerable 
improvement in this area, however there 
is still work to be done.

During the year, our home loan book 
grew by more than $100 million.  
This growth was supported by a 
combination of new products and 
services, successful marketing 
campaigns, targeted customer 
engagement strategies, and a more 
proactive approach by our Lenders to 
engage with local business communities. 

We have seen considerable uplift in the 
volume and value of our Personal Loan 
products, supported by key marketing 
campaigns and strategies to support 
our value proposition as a key provider 
of personal lending within our local 
communities and beyond. We expect 
this growth to continue as planned 
technology improvements in 2016 will 
enable customers to apply for personal 
loans online. 

During the year we worked with our 
third party providers to ensure we 
had a comprehensive product suite 
and as a result, introduced a number 
of new product offerings to better 
support our customers. We also made 
enhancements to the credit card 
application process, resulting in a faster 
and more efficient processing system. 

Our locally-based Contact Centre was 
enhanced during the year, enabling 
greater out-of-hours capability and 
more functionality to support our 
inbound and outbound customer 
engagement strategies. While we have 
made significant improvements, there is 
still work to be done, and this program 
will continue in 2016.

Investing in our people has been a  
key focus during the year with the 
successful introduction of the Salesmax 
program, designed to build sales and 
service capabilities of our frontline 
staff. We are already realising the 
benefits of this training as it enhances 
the capabilities of our frontline staff to 
convert opportunities. The program will 
continue in 2016, ensuring we continue 
to build capability and support all 
elements of the sales process.

We have also continued to build on our 
community involvement and support 
throughout the year, with community 
activities – led by our rebranding to 
Auswide Bank – enabling our branch 
staff to establish a greater presence 
and provide additional support to 
their local communities. The proactive 
approach adopted by our Lenders has 
also increased their presence within the 
community through networking and 
participation in local business groups. 

In November we launched our new 
customer website, separating the 
corporate and retail sites. The new 
customer website has a fresh feel, is 
easy to navigate, and is optimised for 
mobile and tablets. The user-friendly 
structure highlights the availability of 
online applications and incorporates 
social media elements as well as 
Live Chat and Newsfeeds. We also 
launched additional online application 
functionality for loans and accounts, 
upgrades to Internet Banking, and a 
new smartphone app. The new mobile 
banking app has been well accepted by 
customers, and we will continue to refine 
and improve the application, releasing 
a number of new features in the first 
half of 2016. We have received positive 
feedback about the new website from 
a number of our external partners, and 
it will remain a key platform for new 
customer acquisition, particularly as our 
technology investments come online. 

The branch revitalisation program 
continues with a number of our 
branches upgraded and new technology 
enhancements rolled-out including 
electronic in-branch advertising, iPads 
for customer use, and internet kiosks 
to support online banking. New format 
branches opened in Pialba, Hervey Bay 
and Mt Pleasant in Mackay, and further 
openings are planned during 2016.

AUSWIDE BANK 

/  15 

BUSINESS BANKING

Our Business Bankers  
have been well accepted 
in their local communities 
throughout Queensland, and 
we have taken the opportunity 
to open up discussions with 
small-to-medium enterprises 
(SMEs) to explore ways 
Auswide Bank can add  
value to their business. 

We are well networked within our 
local communities and have strong 
relationships with local accountants, 
solicitors and other professional services 
to ensure we understand the needs of 
emerging and mature local businesses. 
We continually seek to broaden our 
networks and in May 2015, sponsored 
the Bundaberg Business Expo, which 
enabled us to promote our offering 
directly to the market. 

During the year, we grew our 
SME networks throughout North 
Queensland, Central Queensland and 
the Sunshine Coast. This included 
forming a strategic partnership with 
the Chamber of Commerce & Industry 
Queensland (CCIQ) to specifically 
target the Sunshine Coast and Central 
Queensland regions. The partnership is 
an opportunity to directly engage with 
CCIQ members on a range of business 
banking topics, raising brand awareness 
for Auswide Bank among members, 
customers and stakeholders. The 
partnership is a new avenue to promote 
Auswide Bank’s participation in local 
business networks, and we will continue 
to work with CCIQ during 2015/16 to 
build on this year’s success.

We will continue to grow our presence 
and networks in North and Central 
Queensland and the Sunshine Coast in 
2016, while extending into South East 
Queensland and winning customers in 
this area. 

Our Business Bankers have acquired 
customers from the larger banks on the 
basis of being local, highly accessible, 
experienced and stable. These new 
customers represent growth in Auswide 
Bank’s balance sheet and lines of 
revenue across products including loans, 
equipment financing, transactional 
banking products and services such as 
merchant facilities. We expect growth to 
continue as we gain momentum in this 
emerging part of the business.

Auswide Bank’s business banking 
approach differs to the traditional ‘big 
bank’ mentality, which is characterised 
by the need for small businesses to 
strictly conform to rules and regulations. 
We will continue to evaluate each 
opportunity to support small businesses 
based on the strength of their business 
models. Over the next 12 months, we 
will focus on converting our pipeline of 
opportunities into new business banking 
customers for whom we provide lending 
and transactional banking services.

AUSWIDE BANK’S BUSINESS BANKING APPROACH 

DIFFERS TO THE TRADITIONAL ‘BIG BANK’ 

MENTALITY, WHICH IS CHARACTERISED BY THE 

NEED FOR SMALL BUSINESSES TO STRICTLY 
CONFORM TO RULES AND REGULATIONS

16  /  ANNUAL REPORT

AUSWIDE BANK 

/  17 

18  /  ANNUAL REPORT

THIRD PARTY MORTGAGE  
BROKER ALLIANCES

Key to sustaining this growth is 
offering brokers a seamless lodgement 
experience. As part of the Lendfast loan 
origination project, we are building a 
better broker platform over the next  
12 months that fully utilises the 
capability of NextGen – our broker 
submission portal – to enable easier 
and more comprehensive applications 
by brokers. This will enable brokers 
to receive faster and in some cases, 
immediate credit assessment outcomes. 
This functionality is expected to be fully 
operational during the first half of the 
2016 financial year.

To support this growth area of the 
business, we have established a 
dedicated broker centre in Toowong, 
a broker office in Robina and a broker 
representative in Sydney.

The Third Party business  
has grown substantially 
during the year, with the 
model continuing to evolve 
and support Auswide  
Bank’s value proposition  
as a genuine alternative  
to the major banks. 

We introduced a number of initiatives to 
engage with mortgage brokers across 
each capital city and surrounding areas 
including sales specials, information 
sessions and product offers. As a result, 
we have experienced a significant 
increase in the number of brokers 
seeking accreditation with us, and this 
sector is now a major contributor to 
the lending program. This expansion 
positions Auswide Bank well for 
customer growth nationwide and we 
anticipate an increase in loan approvals 
in the near-term, particularly from 
Sydney, Melbourne and Brisbane.

AUSWIDE BANK 

/  19 

OUR PEOPLE

•  Delivery of the e-learning platform in 
2014/15, which has enabled the Bank 
to fully streamline our regulatory and 
compliance training obligations, and 
increased our internal capability to 
deliver other learning requirements 

•  Delivery of development opportunities 

for other business units. 

These training opportunities – 
developed to meet recognised learning 
standards – are supported by full-time 
trainers employed to deliver and assess 
our programs.

As part of our continuous improvement 
processes, we have put in place various 
employee feedback mechanisms 
including performance appraisals 
and regular staff surveys to better 
understand how we can improve  
internal processes and services for  
our customers. 

This ongoing focus in our people 
and their professional development 
will ensure Auswide Bank continues 
to meet the high expectations of its 
shareholders, customers and our key 
business partners.

At Auswide Bank, we 
recognise that our people  
are the strength of our 
business and essential to 
our ongoing success and 
growth. We have invested 
significantly in our employees 
and continue to focus on this  
area of the business as a  
key strategic priority.

During the year, we focused on 
maximising the potential of our 
employees and enhancing the  
customer service experience through 
the roll-out of the MAX programme 
and other learning and development 
initiatives, including:

•  SalesMAX – the introduction of a 

sales coaching program across our 
branch network has increased sales 
performance throughout the business 

•  LeaderMAX – developing and 

coaching our leaders to support 
employees through the rapid 
changes experienced by the  
bank and within the fast-paced 
finance industry

•  Key technology developments  
in Ultracs 4 and Lendfast, with 
delivery of further cost-saving and 
customer-centric enhancements 
planned for 2015/16

20  /  ANNUAL REPORT

AUSWIDE BANK 

/  21 

22  /  ANNUAL REPORT

TECHNOLOGY INVESTMENT

AN UPGRADE OF OUR 

INTERNET BANKING 

SYSTEM IS CURRENTLY 

IN PLANNING AND 

IS TARGETED FOR 

COMPLETION DURING 

THE 2016 FINANCIAL YEAR

In an increasingly competitive 
market, our ability to deliver 
exceptional customer service, 
products, capability and 
innovation is more important 
than ever. 

Technology investment is central to 
achieving this, and we have continued 
to pursue our IT strategic objectives 
focusing on:

•  Competing with our peers in 

technology

•  Delivering a superior customer 

experience

•  Providing secure and efficient 

systems

•  Leveraging data to gain a better 
understanding of our customers. 

In February, we successfully completed 
the upgrade of our core banking system, 
seamlessly integrating it into the 
business. We are continuing to leverage 
the full benefits of the system upgrade 
which has increased automation, 
integrated our Customer Relationship 
Management with improved data 
analysis and increased functionality for 
customers and our staff. 

Our first dedicated smartphone mobile 
banking app was launched in May, 
making mobile banking easier for 
our customers. A second release is 
planned during the first half of the 2016 
financial year, which will provide greater 
functionality for customers and enable 
services including BPAY payments and 
entity management.

A key focus for the 2016 financial year 
is the completion of the upgrade to 
our loan origination system. Once 
implemented, the system will support 
faster loan application processing and 
provide applicants with an immediate 
approval decision. By significantly 
improving our ‘time to yes’, these 
automatic loan processing functions will 
reduce processing costs and risk, while 
improving the customer experience. The 
personal loan application process will be 
the first introduced on the new system, 
planned for the last quarter of 2015/16. 

An upgrade of our Internet Banking 
system is currently in planning and is 
targeted for completion during the 2016 
financial year. Once implemented, the 
new system will provide the tools and 
functionality needed to keep customers 
on our site for longer, fostering deeper 
engagement with them and generating 
cross-selling opportunities. 

While these projects have remained 
a key focus for the Company, we 
have made additional technology 
improvements across the business. 

In November 2014, we moved data 
centres and consolidated our server 
footprint to increase capacity and 
simplify our technology systems.  
We have also improved our business 
intelligence service by building our data 
capability, enabling us to provide better 
insights for customers and develop 
more targeted products and services  
to enhance our service offering. 

AUSWIDE BANK 

/  23 

COMMUNITY

Sponsorship is a key plank of our 
community engagement program, 
during the year we provided several 
hundred thousand dollars in financial 
sponsorship to local community events 
and initiatives.

In October 2014, to meet an increasing 
demand from Not-For-Profit groups 
for sponsorship support, we formalised 
our community sponsorship program 
through the introduction of ‘Our 
Community’ Grants Scheme. The 
Scheme provides a fair and equitable 
application and assessment process for 
eligible groups to access sponsorship 
and funding, together with a transparent 
reporting and evaluation process. We 
are confident this revised sponsorship 
approach will deliver positive outcomes 
for all parties by ensuring expectations 
are clearly articulated and managed 
throughout the sponsorship process.

As part of our ongoing commitment to 
the Bundaberg region, in January 2015 
we contributed a $50,000 donation 
towards the purchase of an Armstrong 
Siddeley Tourer – the car used by 
pioneer aviator, Bert Hinkler during 
his processional motorcade and State 
welcome home parade in Brisbane on  
6 March 1928. The donation allowed the 
purchase of two vehicles and a year-
long rebuild project to commence. Upon 
completion, the vehicle will be housed at 
the Hinkler Hall of Aviation as part of the 
Hinkler Collection, helping to showcase 
Bundaberg’s significant aviation history.

Our connection to the community is 
fundamental to who we are and we will 
continue to be a significant contributor 
to our local communities in the future.

SPONSORSHIP IS 

A KEY PLANK OF 

OUR COMMUNITY 

ENGAGEMENT PROGRAM, 

DURING THE YEAR WE 

PROVIDED SEVERAL 

HUNDRED THOUSAND 

DOLLARS IN FINANCIAL 

SPONSORSHIP TO LOCAL 

COMMUNITY EVENTS 

AND INITIATIVES

We have always been 
actively involved in the local 
communities we operate 
in, and we are proud of the 
support we provide to many 
schools, groups and clubs 
throughout the year. 

We seek to maintain and enhance our 
community relationships through:

•  Sponsorship for local community 

events and initiatives 

•  Social media including Facebook, 
Twitter, LinkedIn and Instagram

•  The Not-For-Profit Loan Referral 
Program – an incentives program 
designed to benefit Not-for-Profit 
organisations who provide referrals 
to Auswide Bank

•  Staff volunteer programs – our 
program for staff to personally  
give back to their local community

• 

In-kind support for community  
events such as signage, marquee 
hire, merchandise and use of our 
company mascot, Ziggy the Super 
Saving Piggy.

24  /  ANNUAL REPORT

AUSWIDE BANK 

/  25 

26  /  ANNUAL REPORT

RISK AND COMPLIANCE CULTURE

It is essential to have a 
fully functional risk and 
compliance management 
program to actively eliminate 
risk, where possible, and 
reduce those risks that 
cannot be eliminated. 

Over the past 12 months, we have 
continued to make substantial 
improvements across the organisation 
to enhance the risk and compliance 
culture of the business. 

Auswide Bank’s Strategic Plan is 
underpinned by an effective and 
robust risk management framework. 
Each business unit continues to be 
responsible for managing the outcome 
of risk-related activities under a ‘Three 
Lines of Defence’ model:

 Line 1 – Business Units.  
Front line business units manage 
risk as part of ‘day-to-day’ 
operations.

 Line 2 – Risk and Compliance 
Management.  
This team provides support, 
oversight and risk and compliance 
expertise by developing and 
maintaining an integrated risk 
management framework which 
supports the Strategic Plan.  
Risk and Compliance measure risk 
exposures to support the decisions 
of the business, provide reporting 
to the Board and Management, and 
make credit risk decisions under 
approved delegations and loan 
portfolio management.

 Line 3 – Audit Management. 
Independently assess the 
effectiveness and efficiency of 
internal controls, risk management 
processes, and governance systems 
created by business units, while 
supporting and providing assurance 
on these functions.

Our hard work and achievements in this 
area over the past two years contributed 
to Auswide Bank receiving approval to 
become a bank in April 2015, as well as 
the revised outlook issued by Standard 
& Poors from ‘negative’ to ‘stable’ 
and reaffirmed issuer credit ratings on 
Auswide Bank at ‘BBB/A-2’. 

Throughout the year, we continued to 
focus on:

•  Ensuring sustainability – continuous 

improvement working towards 
reducing arrears levels. There has 
been a significant reduction in loan 
portfolio arrears, which is now in-line 
with our peers

•  Our people – training to increase the 
capabilities of our loan collections, 
credit, risk and compliance teams

•  Ongoing review and refinement of 
credit policies against credit risk 
oversight findings, portfolio trends 
and macroeconomic conditions to 
help meet business and customer 
expectations while ensuring 
sustainability of the business

•  Regulatory change – monitoring 
of new and proposed regulations 
with particular emphasis on the new 
APRA Prudential Standard CPS 220 
Risk Management, which came into 
effect 1 January 2015.

AUSWIDE BANK 

/  27 

 
 
 
BOARD OF DIRECTORS 

JOHN HUMPHREY LL.B 
Chairman 
Member of the Audit Committee 

MARTIN BARRETT BA(ECON) MBA 
Managing Director 
Director of Mortgage Risk Management 

Board Member since: February 2008

Pty Ltd 

Professor Humphrey was appointed 
Chairman of the Board following the 
2009 Annual General Meeting. He was 
a senior partner in the Brisbane office 
of international law firm, King & Wood 
Mallesons until 1 January 2013, where 
he specialised in commercial law and 
corporate mergers and acquisitions.  
He is now Executive Dean of the Faculty 
of Law at Queensland University of 
Technology and is currently a Non-
Executive Director of Horizon Oil  
Limited and Downer-EDI Limited.

Board Member since: September 2013

Mr Barrett has extensive experience in 
the banking sector, having previously 
held the positions of Managing Director 
(Queensland, Western Australia and 
National Motor Finance Business) and 
General Manager NSW/ACT Corporate 
& Business Bank at St George Bank Ltd.  
Prior to working at St George Bank, 
Mr Barrett held senior roles at regional 
financial institutions in the United 
Kingdom and at National Australia Bank.

28  /  ANNUAL REPORT

BARRY DANGERFIELD 
Non-Executive Director 
Director of Mortgage Risk Management 

GREG KENNY GAICD, GradDipFin 
Non-Executive Director 
Director of Mortgage Risk Management 

Pty Ltd 

Pty Ltd 

SANDRA BIRKENSLEIGH BCom, 
CA, GAICD, ICCP (Fellow) 
Non-Executive Director 
Chairperson of the Audit Committee 

Chairman of the Group Board 

Chairman of the Risk Committee 

Member of the Risk Committee 

Remuneration Committee 

Member of the Audit Committee 

Member of the Group Board 

Member of the Audit Committee 

Member of the Group Board 

Remuneration Committee 

Member of the Risk Committee 

Remuneration Committee 

Board Member since: November 2011

Board Member since: November 2013

Mr Dangerfield has had a successful 
39 year banking career with Westpac 
Banking Corporation having held 
positions across Queensland and 
Northern Territory as Regional 
Manager of Business Banking, Head 
of Commercial and Agribusiness, and 
Regional General Manager of Retail 
Banking. Mr Dangerfield is a Director of 
the Bundaberg Friendly Society Medical 
Institute which operates the Friendly 
Society Private Hospital and Pharmacies 
in Bundaberg.

Mr Kenny had a long and successful 
career with Westpac Banking 
Corporation and St George Bank Ltd, 
and prior to that with Bank of New York 
and Bank of America in Australia. At 
St George Bank he held the positions 
of Managing Director (NSW and ACT), 
General Manager Corporate and 
Business Bank, and General Manager 
Group Treasury and Capital Markets.

Board Member since: February 2015

Ms Birkensleigh was a partner at 
PricewaterhouseCoopers for 16 years 
until 2013. During her career her 
predominant industry focus has been 
Financial Services (Banking and Wealth 
Management). Ms Birkensleigh has also 
advised on risk management in other 
sectors such as retail and consumer 
goods, retail and wholesale electricity 
companies, resources and the education 
sector. Ms Birkensleigh is currently a 
Non-Executive Director of five Wealth 
Management and Insurance subsidiaries 
of the National Australia Bank and a 
Board of Management member and 
Treasurer of Children’s Therapy Centre.

AUSWIDE BANK 

/  29 

LEADERSHIP TEAM

MARTIN BARRETT BA(ECON) MBA 
Managing Director

Martin was appointed in February 
2013 and is responsible for overseeing 
Auswide Bank’s operations and 
business strategy. He has a  
30 year career across diverse banking 
institutions, both nationally and 
internationally. This includes senior 
executive roles in retail, commercial, 
corporate, and specialist areas. Martin 
holds a Bachelor of Arts (Economics) 
from Murdoch University and an MBA 
from the University of Western Australia. 
He is also a member of the Australian 
Instructed Company Directors.

BILL SCHAFER BCom CA 
Chief Financial Officer  
and Company Secretary

Bill was appointed in 2001 and has 
significant experience in the financial 
services industry. Bill’s responsibilities 
include oversight of Auswide Bank’s 
Accounting and Treasury business 
units, financial and management 
reporting for the Company, statutory, 
ASX and regulatory reporting, strategic 
focus for the Company’s capital, 
funding and liquidity planning, budget 
preparation, and financial analysis for 
key stakeholders, the Board  
and management.

MARK RASMUSSEN MBA 
Chief Operating Officer

Mark was appointed in early 2014 as 
the General Manager for Business 
Banking and Operations, and has 
more than 25 years’ experience in 
the financial services sector. He has 
held senior roles in corporate and 
business banking, property, product 
development and strategy, product 
sales and people management, planning 
and operations, and compliance in 
both retail and commercial/corporate 
environments. Mark’s responsibilities 
include management of Auswide Bank’s 
lending services, banking services, 
property and procurement, business 
continuity planning, transformation 
and productivity, implementation 
and analytics reporting, teams, and 
functions.

STEPHEN CAVILLE AdvDipEEng 
Chief Information Officer

DALE HANCOCK BBus SAFin 
Group Treasurer

Steve was appointed in 2000 as 
Senior System Administrator and 
was subsequently appointed to the 
position of Chief Information Officer 
in 2010. He has previously gained a 
broad spectrum of qualifications and 
experience in the Royal Australian Air 
Force. Steve’s responsibilities include 
oversight of Auswide Bank’s Information 
Technology business unit, where he has 
been instrumental in the development of 
the Company’s Information Technology 
Strategic Plan and implementation of 
key technology projects.

Dale was appointed in 1996 as the 
Structured Finance Manager and 
was subsequently appointed to the 
position of Group Treasurer in 2013. 
His previous experience included 
specialising in accounting, taxation, and 
audit within a Chartered Accountant 
firm. Dale’s responsibilities include 
managing Auswide Bank’s wholesale 
and retail funding, treasury and liquidity 
operations, and interest rate risk 
management.

CHARLTON NEVIS BA MBA 
General Manager – Third Party 
and Business Banking

Charlton was appointed in 2013 and has 
extensive experience across the financial 
services sector. He established the Third 
Party Mortgage Broker division and has 
developed and implemented Auswide 
Bank’s mortgage broker strategy. 
Charlton’s responsibilities include the 
development of relationships across 
aggregators and brokers nationally, 
and driving Auswide Bank’s proposition 
to Australian mortgage brokers across 
the country. This year, Charlton has 
also assumed control of building and 
growing Auswide Bank’s Business 
Banking portfolio.

30  /  ANNUAL REPORT

RAY LINDERBERG BBus (Comn) 
General Manager –  
Marketing and Products

GAYLE JOB 
General Manager –  
Human Resources

Ray was appointed in 1986 as Marketing 
Manager and was subsequently 
appointed to General Manager, 
Marketing and Products in 2013.  
Ray has extensive experience in 
marketing and the financial services 
industry, and has been instrumental 
in many company initiatives. Ray’s 
responsibilities include oversight of 
Auswide Bank’s Marketing and Products 
business unit and management of 
the Company’s brand, marketing, 
communications and product strategy.

Gayle was appointed in 1977, gaining 
significant experience in financial 
services including branch operations, 
product development, documentation 
of policies and procedures, training, 
and compliance. Gayle’s appointment 
in 2013 to General Manager, Human 
Resources has enabled her to focus 
on the improvement of people, 
engagement, and development. 
This includes Auswide Bank’s payroll 
management and remuneration, 
recruitment, learning and development, 
performance management, employment 
law regulation and compliance, staff 
welfare, and occupational health  
and safety.

CRAIG LONERGAN MBA, F Fin 
Chief Risk Officer

Craig was appointed in February 2014 
as General Manager Internal Audit, 
bringing more than 25 years’ experience 
within the financial services industry 
having held senior leadership roles in 
Australia, Papua New Guinea and the 
Solomon Islands. Craig was appointed 
to the role of Chief Risk Officer in 
early July 2014, and is responsible for 
creating and maintaining a culture of 
risk awareness and accountability. He 
achieves this by assisting the Board of 
Directors in developing the Company’s 
risk appetite statement, promoting 
an enterprise-wide risk management 
philosophy, and establishing prudent 
guidelines to help the business manage 
and mitigate identified risks.

MICHAEL MCLENNAN BBus CPA 
General Manager –  
Internal Audit

Michael was appointed as Chief Risk 
Officer in 2011 to establish the Risk 
function for the Company and was 
subsequently appointed General 
Manager, Internal Audit in 2014. He has 
more than 25 years’ experience within 
Australia and the United Kingdom 
in financial and risk management 
of financial institutions. Michael’s 
responsibilities incorporate the third 
line of defence in Auswide Bank’s 
‘Three Lines of Defence’ model, and 
include assessment of the effectiveness 
and efficiency of internal control, risk 
management and governance systems.

AUSWIDE BANK 

/  31 

DIRECTORS’ STATUTORY REPORT
30 JUNE 2015

REVIEW AND 
RESULTS OF 
OPERATIONS
The consolidated net profit after income 
tax for the 2014/15 financial year was 
$13.262m compared to the result of 
$14.063m for the 2013/14 year.

There were two one-off expense items in 
the 2014/15 financial year relating to the 
rebranding costs for the Auswide Bank 
name and the writedown of assets in the 
outsourcing of the ATM fleet. The total 
costs relating to these one-off items was 
$516,000.

The underlying cash NPAT in the chief 
entity for financial year 2014/15 was 
$13.104m compared to $12.196m 
(excluding the $750,000 dividend from 
Mortgage Risk Management Pty Ltd) for 
2013/14. This represents an increase of 
7.4% from 2013/14.

The statutory net profit for the chief 
entity for 2014/15 was $12.743m 
compared to $12.946 (including the 
MRM dividend) for 2013/14.

The loan book of Auswide Bank Ltd 
recorded growth of 4.8% across the  
year increasing from $2.224b at  
30 June 2014 to $2.330b at 30 June 
2015. The loan book totalled $2.271b  
at 31 December 2014.

Home loan approvals across the 
2014/15 financial year totalled  
$449m, an increase of 8.5% on the 
$414m in home approvals for the 
2013/14 financial period.

Personal loans 
Funding of personal loans commenced 
in the last quarter of the 2012/13 
financial year. The personal loan book 
continues to grow in line with budgeted 
approvals, and although not material 
to the total loan portfolio, reached 
$8.219m at the conclusion of the 
financial year. Personal loans have not 
been reported as a separate segment 
for the financial year.

Mortgage Risk Management  
Pty Ltd (MRM)
The Board announced on 13 August 
2015 the effective date of 30 September 
2015 to wind up the captive lenders’ 
mortgage insurance subsidiary, MRM.

32  /  ANNUAL REPORT

The credit risk and provisions will be 
transferred to the balance sheet of  
the chief entity.

There is ongoing focus on increasing  
the quality of origination as the loan 
book grows.

The wind up will release up to $10m of 
tier 1 capital which is currently invested 
in MRM.

The claims expense in MRM was in line 
with budget expectations across the 
2014/15 financial year. The total claims 
expense for the year was $2.6m and  
the total insurance liabilities, based  
on actuarial advice, were $4.9m at  
30 June 2015.

These ‘Provisions’ have been calculated 
to cover all claims arising in the next 
three financial years, while maintaining 
significant risk buffers in place to 
account for claims which may be 
brought to account unexpectedly.

PRINCIPAL 
ACTIVITIES AND 
SIGNIFICANT 
CHANGES
Substantial progress has been made 
with the implementation of the 
strategies contained in the three-year 
Strategic Plan adopted by the Board  
in May 2013.

Residential lending
The strategic plan focused on bringing 
growth to residential lending with the 
objective of growing the loan book 
through the branch network and 
mortgage broker introduced loans  
in the 2014/15 financial year.

As reported above, approvals in 
residential lending increased 8.5% 
compared to 2013/14 as a result of:

• 

Improving the skills, capability and 
accountability of the Sales and 
Distribution team (retail network) 
as a priority to lift both financial 
performance and customer 
experience;

•  Building Auswide Bank’s Third Party 
Broker platform by better defining, 
managing and growing home  
lending via the Broker and  
Mortgage Alliance introducers;

•  Growth in demand from South East 
Queensland from the Gold Coast 
north to the Sunshine Coast; and

•  An ongoing emphasis on resourcing 
the Third Party platform and first 
party network for growth into the 
2015/16 financial year.

Business Banking
Auswide Bank introduced Business 
Banking in April 2014 with a staged 
origination phase. The new channel is to 
provide both growth opportunity as well 
as revenue diversification. The model 
targets SME customers primarily in  
the Auswide Bank core catchment area.

Risk
The Board and management of Auswide 
Bank have committed to addressing 
the risk framework of the group, and 
strengthening the risk management 
‘culture’ of the organisation. This has 
resulted in enhanced measurement, 
monitoring and reporting of risk 
related matters in the financial year. 
Of particular note is the establishment 
of a separate Board Risk Committee 
to provide a further strengthening of 
the oversight and improvement of the 
risk framework across the organisation. 
The Board remains focused on the 
improvement of credit quality as the 
loan book grows.

Arrears and collections
The Arrears Project developed in the 
2013/14 financial year has continued to 
deliver improvements in the arrears and 
collections systems of the group.

The enhanced systems and procedures, 
retraining of staff and the addition of 
resources in the risk and collections 
departments, has resulted in an 
improvement in the arrears in the 
2014/15 financial year. In accordance 
with data disclosed in the financial 
statements, total arrears greater than 
30 days past due (excluding the effects 
of hardship accounts) have decreased 
from $43.0m to $22.3m in the year to 
30 June 2015.

Branch network
The rebranding of Auswide Bank 
included the roll-out of the branch 
refurbishment plan, creating a more 
modern look and customer-friendly 
experience across our branch locations. 
Six branches moved to the new model 
during 2014/15 and additional branches 
have been identified for 2015/16 
including Maryborough, Gympie  
and Bundaberg. 

CAPITAL 
The capital adequacy ratio for the 
Auswide Bank group (excluding MRM)  
at 30 June 2015 was 15.15% (2014: 
14.29%). The tier 1 capital ratio at 30 
June 2015 was 12.59% (2014: 11.68%).

The total capital level remains strong 
and in excess of the Board target of 
13.00%.

DIVIDENDS 
A fully franked interim dividend of  
14.0 cents per ordinary share was 
declared and paid on 27 March 2015  
(28 March 2014 – 13.0 cents). A fully 
franked final dividend of 16.0 cents per 
ordinary share has been declared by  
the Board and will be paid on 2 October 
2015 (3 October 2014 – 15.0 cents).

The Board has resolved to suspend the 
Dividend Reinvestment Plan for the final 
dividend payable on 2 October 2015.

DIRECTORS 
The names and particulars of the 
Directors of the Company in office 
during or since the end of the financial 
year are:

Professor John S Humphrey LL.B

Professor Humphrey was appointed to 
the Board on 19 February 2008, and 
was appointed Chairman following the 
2009 Annual General Meeting. He was 
a senior partner in the Brisbane office 
of international law firm, King & Wood 
Mallesons (until 1 January 2013), where 
he specialised in commercial law and 
corporate mergers and acquisitions.  
He is now Executive Dean of the Faculty 
of Law at Queensland University of 
Technology. He is currently a Non-
Executive Director of Horizon Oil 
Limited and Downer-EDI Limited. 
Professor Humphrey is a member of the 
Audit Committee and is an independent 
Director.

Some branches have been closed, 
amalgamated or relocated to locations 
which will provide more opportunity. 
There is an ongoing review of the 
existing branch footprint to ensure it 
delivers a strong performance for both 
shareholders and customers.

Technology 
In February, Auswide Bank upgraded 
the core operating system to Ultracs 4, 
to improve customer service by reducing 
unnecessary administrative tasks 
and improving account opening and 
transaction times. Customer information 
is more readily available which enhances 
the ability to match the right products to 
meet customers’ needs.

Digital capability is a key component 
of the Auswide Bank strategy. Future 
plans include online and digital services 
including online account opening, online 
home loans and personal loans and 
improved online transactional capability.

NAME CHANGE 
AND CHANGE  
OF STATUS
Auswide Bank Ltd was previously known 
as Wide Bay Australia Ltd. Effective  
1 April 2015, the building society 
formerly known as Wide Bay Australia 
Ltd converted to a bank and changed its 
name to Auswide Bank Ltd. Appropriate 
approval was granted by the Australian 
Prudential Regulation Authority in 
relation to both the change of status 
(from a building society to a bank) and 
the utilisation of the term ‘bank’ in the 
name of Auswide Bank Ltd.

ACQUISITIONS 
The Board will continue to monitor 
opportunities to acquire loan books  
or suitable institutions as they arise. 

MATTERS 
SUBSEQUENT TO 
THE END OF THE 
FINANCIAL YEAR
There has been no other matter or 
circumstance since the end of the 
financial year that will significantly affect 
the results of operations in future years 
or the state of affairs of the company.

Mr Peter J Sawyer FCA, FAICD, FIFS 
– Retired 17 March 2015

Mr Sawyer has been a Director since 
1987. He retired as a Director of the 
company on 17 March 2015. Until 
August 2008, he was a partner of the 
firm Ulton, Chartered Accountants with 
offices in Bundaberg, Maryborough, 
Hervey Bay and Gladstone. Until his 
retirement Mr Sawyer was Chairman of 
the Audit Committee, a member of the 
Group Board Remuneration Committee, 
a member of the Risk Committee and 
was an independent Director. He also 
retired as a Director of Mortgage Risk 
Management Pty Ltd, a position he was 
appointed to in 2011.

Mr Barry Dangerfield 

Mr Dangerfield was appointed to  
the Board on 22 November 2011.  
Mr Dangerfield has had a successful 
39 year banking career with Westpac 
Banking Corporation having held 
positions across Queensland and the 
Northern Territory of Regional Manager 
Business Banking, Head of Commercial 
and Agribusiness and Regional  
General Manager Retail Banking.  
Mr Dangerfield was appointed to the 
Board of Mortgage Risk Management 
Pty Ltd on 19 November 2013.  
Mr Dangerfield is the Chairman of the 
Group Board Remuneration Committee, 
a member of the Audit Committee, a 
member of the Risk Committee and is 
an independent Director.

Mr Gregory N Kenny GAICD, 
GradDipFin

Mr Kenny was appointed to the Board 
on 19 November 2013. Mr Kenny has 
had a long and successful career with 
Westpac Banking Corporation and  
St George Bank Ltd, and prior to that 
with Bank of New York and Bank of 
America in Australia. At St George 
he held the positions of Managing 
Director (NSW and ACT), General 
Manager Corporate and Business Bank 
and General Manager Group Treasury 
and Capital Markets. Mr Kenny was 
appointed to the Board of Mortgage 
Risk Management Pty Ltd on  
19 November 2013. He is the Chairman 
of the Risk Committee, a member of 
the Audit Committee, a member of the 
Group Board Remuneration Committee 
and is an independent Director.

AUSWIDE BANK 

/  33 

DIRECTORS 
CONTINUED
Mr Martin J Barrett BA(ECON), 
MBA 

Mr Barrett commenced as Chief 
Executive Officer of Wide Bay Australia 
Ltd (now Auswide Bank Ltd) on  
4 February 2013, and was subsequently 
appointed Managing Director on 
19 September 2013. Mr Barrett has 
extensive experience in the banking 
sector, having previously held the 
positions of Managing Director 
(Queensland and Western Australia) and 
General Manager NSW/ACT Corporate 
& Business Bank at St George Bank. 
Prior to working at St George Bank, 
Mr Barrett held senior roles at regional 
financial institutions in the UK and at 
National Australia Bank. Mr Barrett was 
appointed as a Director of Mortgage 
Risk Management Pty Ltd on  
19 November 2013. He is an  
Executive Director.

Ms Sandra C Birkensleigh BCom, 
CA, GAICD, ICCP (Fellow)  
Appointed 2 February 2015

Ms Birkensleigh was appointed 
to the Board on 2 February 2015. 
Ms Birkensleigh was a partner at 
PricewaterhouseCoopers for 16 years 
until 2013. During her career her 
predominant industry focus has been 
Financial Services (Banking and Wealth 
Management). Ms Birkensleigh has also 
advised on risk management in other 
sectors such as retail and consumer 
goods, retail and wholesale electricity 
companies, resources and the education 
sector. Ms Birkensleigh is currently a 
Non-Executive Director of five Wealth 
Management and Insurance subsidiaries 
of the National Australia Bank and a 
Board of Management member and 
Treasurer of Children’s Therapy Centre. 
Ms Birkensleigh is an independent 
Director. She was appointed as the 
Chairperson of the Audit Committee 
upon her appointment to the Board on 
2 February 2015, and also as a member 
of the Group Board Remuneration 
Committee and the Risk Committee.

COMPANY 
SECRETARY 
Mr William R Schafer BCom, CA

Mr Schafer was appointed Company 
Secretary in August 2001. He has 
extensive experience in public 
accounting and management. He is an 
Associate of the Institute of Chartered 
Accountants.

DIRECTORS’ 
MEETINGS
During the financial year, 16 meetings 
of the Directors (including 4 special 
meetings), 10 meetings of the Audit 
Committee, 4 meetings of the 
Remuneration Committee and  
12 meetings of the Risk Committee  
were held, in respect of which each 
Director attended the following number:

BOARD

AUDIT

REMUNERATION

RISK

HELD ATTENDED

HELD ATTENDED

HELD ATTENDED

HELD ATTENDED

JS Humphrey

PJ Sawyer

B Dangerfield

GN Kenny

MJ Barrett

SC Birkensleigh

16

10

16

16

16

10

16

9

16

16

16

9

10

10

10

10

10

4

7

9

10

7

10*

4

n/a

n/a

n/a

4

4

4

n/a

1

4

4

1

n/a

1

9

12

12

12

5

n/a

8

12

12

11*

4

* Mr Barrett who is not a member of the Audit or Risk Committees, attended the Audit and Risk Committee meetings  
by invitation.

DIRECTORS’ SHAREHOLDINGS
The Directors currently hold shares of the Company in their own name or a related body corporate as follows:

JS Humphrey

PJ Sawyer (retired 17 March 2015)

B Dangerfield

MJ Barrett

GN Kenny

RELATED PARTY DISCLOSURE 
No persons or entities related to key management personnel provided services to the Company during the year.

Ordinary Shares

31,551

1,077,567

42,076

122,314

15,000

34  /  ANNUAL REPORT

DIRECTORS’ STATUTORY REPORT C0NTINUED30 JUNE 2015REMUNERATION 
REPORT
The Board Remuneration Committee 
consists of independent Directors  
Mr Barry Dangerfield, Mr Greg Kenny 
and Ms Sandra Birkensleigh (appointed 
2 February 2015). Mr Peter Sawyer  
was a member of the committee until  
his retirement on 17 March 2015.  
Mr Barry Dangerfield is Chairman  
of the Committee.

The objective of the Board 
Remuneration Policy is to maintain 
behaviour that supports the sustained 
financial performance and security  
of Auswide Bank Ltd and to reward 
efforts which increase shareholder  
and customer value. This objective is 
upheld by:

•  Appropriately balanced measures of 
performance weighted towards long-
term shareholder interests;

•  Variable performance based pay for 

Executives/Senior Managers involving 
a long-term incentive plan subject to 
an extended period of performance 
assessment;

•  Recognition and reward for strong 

performance;

•  A considered balance between the 

capacity to pay and the need to pay 
to attract and retain capable staff at 
all levels;

•  The exercise of Board discretion 
as an ultimate means to mitigate 
unintended consequences of variable 
pay and to preserve the interests of 
the shareholders; and

•  Short-term and long-term incentive 
performance criteria are structured 
within the overall risk management 
framework of the Company.

Remuneration of  
Non-Executive Directors
The fees payable for Non-Executive 
Directors are determined with reference 
to industry standards, the size of the 
Company, performance and profitability. 
The Directors’ fees are approved by 
the shareholders at the Annual General 
Meeting in the aggregate and the 
individual allocation is approved by the 
Board. The Company’s Non-Executive 
Directors receive only fees (including 
superannuation) for their services. They 
are not entitled to receive any benefit 
on retirement or resignation (other than 
superannuation) and do not participate 
in any share based remuneration.

Remuneration of Executive 
Directors and Senior Executives
Remuneration of the Managing Director 
for 2014/15 was subject to review and 
recommendation of the Remuneration 
Committee and ratification by the 
Board. Remuneration of other senior 
executives for 2014/15 was subject 
to ratification by the Remuneration 
Committee. The remuneration policy for 
executives uses a range of components 
to focus the Managing Director 
and senior executives on achieving 
Auswide Bank’s strategy and business 
objectives. Auswide Bank’s overall 
philosophy is to adopt, where possible, 
a Total Target Reward methodology 
which links remuneration directly to 
the performance and behaviour of an 
individual with Auswide Bank’s results.

The Total Target Reward framework is 
designed to:

•  Reward those who deliver the highest 
relative performance through the 
Company’s incentive programs;

•  Attract, recognise, motivate and 

retain high performers;

•  Provide competitive, fair and 

consistent rewards, benefits and 
conditions;

•  Align the interests of senior 

executives and shareholders through 
ownership of Company shares.

In setting an individual’s Total Target 
Reward, the Committee considers:

• 

Input from the Company’s Managing 
Director on the Total Target Reward 
for senior executives who report 
directly to the Managing Director;

•  Market data from comparable roles 
in the financial services industry;

•  The performance of both the 

individual and Auswide Bank Ltd over 
the last year; and

•  General remuneration market 

environment and trends.

Each individual’s actual remuneration 
will reflect:

•  The degree of individual achievement 

in meeting key performance 
measures under the performance 
management framework;

•  Parameters approved by the Board 
based on the Company’s financial 
and risk performance and other 
qualitative factors;

•  Auswide Bank Ltd’s share price 

performance and relative shareholder 
returns; and

•  The timing and level of deferral in 
relation to any vesting conditions 
applicable.

Components of the Total Target Reward 
include:

•  Fixed annual remuneration provided 

as cash and benefits (including 
employer superannuation and fringe 
benefits) (FAR);

•  Cash based short-term incentive 

(STI) reflecting both individual and 
business performance for the current 
year that supports the longer term 
objectives of Auswide Bank; and

•  Equity based long-term incentives 

(LTI) provided to drive management 
decisions focused on the long-term 
prosperity of Auswide Bank through 
the use of challenging performance 
hurdles.

AUSWIDE BANK 

/  35 

REMUNERATION 
REPORT  CONTINUED
Remuneration of Executive 
Directors and Senior Executives 
continued

Performance based payments were 
made to senior executives under the  
STI scheme for the year as follows:

•  Mr M Barrett (Managing Director): 
$37,500 cash bonus granted  
25 August 2014 as an incentive 
payment for achievement of non-
financial Key Performance Indicator 
(‘KPI’) targets relating to the financial 
year ended 30 June 2014. These 
KPI targets included launching 
the company’s strategic business 
plan and effective executive team 
restructure, together with his overall 
effectiveness as measured against his 
initial executive service agreement.

.

Performance based payments were 
made to senior executives under the  
LTI scheme for the year as follows:

•  Mr M Barrett (Managing Director): 

$37,500 of shares granted  
4 December 2014 as an incentive 
payment for achievement of non-
financial Key Performance Indicator 
(‘KPI’) targets relating to the financial 
year ended 30 June 2014. These 
KPI targets included launching 
the company’s strategic business 
plan and effective executive team 
restructure, together with his overall 
effectiveness as measured against his 
initial executive service agreement.

KPI targets were considered by the 
Remuneration Committee to be 
appropriate measures of performance 
as these had been specifically chosen 
for each executive with the overall aim 
of achieving the strategy and business 
objectives of the Company. The KPI 
targets for the Managing Director 
were assessed by the Remuneration 
Committee. The KPI targets for the other 
senior executives were assessed by the 
Managing Director and then ratified by 
the Remuneration Committee.

No incentive payments based on 
financial KPIs were made during  
the year.

Details of the nature and amount of 
each major element of the remuneration 
of each Director and each of the named 
Officers of the company receiving 
the highest remuneration and the key 
management personnel are:

36  /  ANNUAL REPORT

DIRECTORS’ STATUTORY REPORT C0NTINUED30 JUNE 20159
9
5
,
1
3
1

8
3
9
9
8

,

8
3
9
9
8

,

–

–

–

$

l

a
t
o
T

$

d
e
s
a
b

e
c
n
a
m
r
o
f
r
e
P

$

–

–

–

7
6
6
,
1
4

8
3
9
4
6

,

–

–

–

–

5
2
1
,
5
0
6

0
0
5
,
7
3

1
2
3
,
1
1

,

5
0
2
3
2
0
,
1

0
0
5
,
7
3

1
2
3
,
1
1

5
6
9
6
2
3

,

3
5
0
4
9
1

,

2
9
1
,
3
9
1

,

5
7
8
8
2
2

5
2
0
9
7
1

,

6
6
7
,
2
0
2

,

6
7
8
4
2
3
,
1

–

–

–

–

–

–

–

2
4
1
,
7

1
9
3
4

,

5
9
5
4

,

0
9
9
3

,

8
4
4
3

,

5
5
7
,
4

1
2
3
8
2

,

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

$

7
1
4
,
1
1

3
0
8
,
7

3
0
8
,
7

3
8
7
,
8
1

5
1
6
3

,

4
3
6
5

,

5
5
0
5
5

,

3
8
7
,
8
1

7
1
1
,
6
1

0
7
6
6
1

,

3
8
7
,
8
1

3
2
8
5
1

,

4
6
0
,
7
1

0
4
2
3
0
1

,

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

r
e
h
t
O

d
e
s
a
b
e
r
a
h
S

m
r
e
t
g
n
o

l

n
o
i
t
a
n
m
r
e
T

i

t
n
e
m
e
r
i
t
e
R

-
r
e
p
u
S

-
n
o
N

s
t
n
e
m
y
a
p

s
t
fi
e
n
e
b

s
t
fi
e
n
e
b

s
t
fi
e
n
e
b

n
o
i
t
a
u
n
n
a

y
r
a
t
e
n
o
m

l

t
n
e
m
y
o
p
m
e
t
s
o
P

s
t
fi
e
n
e
b

l

s
t
fi
e
n
e
b
e
e
y
o
p
m
e
m
r
e
t
-
t
r
o
h
S

e
c
n
a
m
r
o
f
r
e
P

d
e
s
a
b

d
e
x
F

i

$

h
s
a
C

s
u
n
o
b

$

s
e
e
f

h
s
a
C

d
n
a
y
r
a
a
s

l

–

–

–

2
8
1
,
0
2
1

5
3
1
,
2
8

5
3
1
,
2
8

0
0
5
,
7
3

,

1
2
0
0
0
5

–

–

2
5
0
8
3

,

4
0
3
9
5

,

0
0
5
,
7
3

9
2
8
,
1
8
8

–

–

–

–

–

–

–

0
4
0
,
1
0
3

5
4
5
3
7
1

,

7
2
9
,
1
7
1

2
0
1
,
6
0
2

4
5
7
,
9
5
1

7
4
9
0
8
1

,

,

5
1
3
3
9
1
,
1

5
1
/
2
0
/
2
d
e
t
n
o
p
p
A
–

i

)
c
e
x
e
-
n
o
n

(

r
o
t
c
e
r
i

D
S

,

i

h
g
e
l
s
n
e
k
r
i
B

5
1
/
3
0
/
7
1
d
e
r
i
t
e
R
–

)
c
e
x
e
-
n
o
n

(

r
o
t
c
e
r
i

D
J
P

,
r
e
y
w
a
S

i

s
r
o
t
c
e
r
i
D
d
e
fi
c
e
p
S
–
n
o
i
t
a
r
e
n
u
m
e
r

l

a
t
o
T

L
E
N
N
O
S
R
E
P
T
N
E
M
E
G
A
N
A
M
Y
E
K
R
E
H
T
O

)
c
e
x
e
-
n
o
n

(

n
a
m

r
i
a
h
C
S
J

,
y
e
r
h
p
m
u
H

)
c
e
x
e
-
n
o
n

(

r
o
t
c
e
r
i

D
B

,

l

d
e
fi
r
e
g
n
a
D

)
c
e
x
e
-
n
o
n

(

r
o
t
c
e
r
i

D
N
G

,
y
n
n
e
K

r
o
t
c
e
r
i

i

D
g
n
g
a
n
a
M
J
M

,
t
t
e
r
r
a
B

I

S
R
O
T
C
E
R
D
D
E
F
C
E
P
S

I

I

5
1
0
2

r
e
c
ffi
O

l

i

i

a
c
n
a
n
F
f
e
h
C
R
W

i

,
r
e
f
a
h
c
S

)

5
1
/
1
0
/
8
2
o
t
4
1
/
7
0
/
1
(

i

s
n
o
i
t
a
r
e
p
O
d
n
a
g
n
k
n
a
B
s
s
e
n
i
s
u
B
r
e
g
a
n
a
M

l

a
r
e
n
e
G

.

5
1
/
1
0
/
9
2
m
o
r
f

r
e
c
ffi
O
g
n
i
t
a
r
e
p
O

i

f
e
h
C
S
M

,

n
e
s
s
u
m
s
a
R

i

4
1
/
7
0
/
1
d
e
t
n
o
p
p
A
–
r
e
c
ffi
O
k
s
i
R

i

f
e
h
C
A
C

,

n
a
g
r
e
n
o
L

r
e
c
ffi
O
n
o
i
t
a
m
r
o
f
n

I

i

f
e
h
C
M
S

,

e

l
l
i

v
a
C

i

g
n
k
n
a
B
s
s
e
n
i
s
u
B
&
y
t
r
a
P
d
r
i

Th

r
e
g
a
n
a
M

l

a
r
e
n
e
G
M
C

,
s
i
v
e
N

n
o
i
t
u
b
i
r
t
s
i
D
&
s
e
a
S
r
e
g
a
n
a
M

l

l

a
r
e
n
e
G
J
A

,

l

e
d
r
A
c
M

i

s
e
v
i
t
u
c
e
x
E
d
e
fi
c
e
p
S
–
n
o
i
t
a
r
e
n
u
m
e
r

l

a
t
o
T

AUSWIDE BANK 

/  37 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$

l

a
t
o
T

2
1
3
,
1
1
1

0
5
7
,
2
8

3
2
9
0
5

,

0
5
7
,
2
8

4
6
4
2
3

,

2
8
9
2
8
5

,

9
6
8
2
0
1

,

,

0
5
0
6
4
0
,
1

,

5
7
6
8
2
3

3
7
1
,
6
9
1

0
9
0
,
7
8

3
2
8
3
8
1

,

,

7
1
5
6
8
1

4
1
7
,
2
1
2

,

2
9
9
4
9
1
,
1

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

$

d
e
s
a
b

e
c
n
a
m
r
o
f
r
e
P

$

–

–

–

–

–

2
8
9
,
7

0
1
5
,
1

2
9
4
9

,

4
8
2
5

,

0
2
2
3

,

7
0
4
,
1

5
8
5
2

,

0
6
6
2

,

7
8
3
3

,

3
4
5
8
1

,

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

$

4
2
4
9

,

6
0
0
,
7

2
1
3
4

,

5
7
7
,
7
1

6
0
0
,
7

9
4
7
,
2

7
7
6
,
7

9
4
9
5
5

,

5
7
7
,
7
1

0
9
4
5
1

,

7
3
8
6

,

3
9
3
4
1

,

0
2
7
,
4
1

0
8
6
6
1

,

5
9
8
5
8

,

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

r
e
h
t
O

d
e
s
a
b
e
r
a
h
S

m
r
e
t
g
n
o

l

n
o
i
t
a
n
m
r
e
T

i

t
n
e
m
e
r
i
t
e
R

-
r
e
p
u
S

-
n
o
N

s
t
n
e
m
y
a
p

s
t
fi
e
n
e
b

s
t
fi
e
n
e
b

s
t
fi
e
n
e
b

n
o
i
t
a
u
n
n
a

y
r
a
t
e
n
o
m

e
c
n
a
m
r
o
f
r
e
P

d
e
s
a
b

d
e
x
F

i

$

h
s
a
C

s
u
n
o
b

$

s
e
e
f

h
s
a
C

d
n
a
y
r
a
a
s

l

–

–

–

4
4
7
,
5
7

1
1
6
6
4

,

8
8
8
,
1
0
1

0
0
0
5
7

,

,

5
2
2
2
8
4

–

–

–

4
4
7
,
5
7

5
1
7
,
9
2

2
8
6
3
9

,

n
o
i
t
a
t
n
e
m
e
p
m

l

I

y
g
e
t
a
r
t
S
–
r
e
g
a
n
a
M

l

a
r
e
n
e
G
&
r
o
t
c
e
r
i

D
M
F

,

d
o
e
L
c
M

3
1
/
1
1
/
9
1

r
o
t
c
e
r
i

D
a
s
a
d
e
r
i
t
e
R
–
t
n
e
m
e
v
o
r
p
m

I

y
t
i
v
i
t
c
u
d
o
r
P
&

5
1
/
3
0
/
7
1
d
e
r
i
t
e
R
–

)
c
e
x
e
-
n
o
n

(

r
o
t
c
e
r
i

D
J
P

,
r
e
y
w
a
S

3
1
/
1
1
/
9
1
d
e
r
i
t
e
R
–

)
c
e
x
e
-
n
o
n

(

r
o
t
c
e
r
i

D
F
J

,
r
e
l
s
s
e
r
P

)
c
e
x
e
-
n
o
n

(

n
a
m

r
i
a
h
C
S
J

,
y
e
r
h
p
m
u
H

)
c
e
x
e
-
n
o
n

(

r
o
t
c
e
r
i

D
B

,

l

d
e
fi
r
e
g
n
a
D

)
c
e
x
e
-
n
o
n

(

r
o
t
c
e
r
i

D
N
G

,
y
n
n
e
K

r
o
t
c
e
r
i

i

D
g
n
g
a
n
a
M
J
M

,
t
t
e
r
r
a
B

I

S
R
O
T
C
E
R
D
D
E
F
C
E
P
S

I

I

4
1
0
2

0
0
0
5
7

,

9
0
6
5
0
9

,

i

s
r
o
t
c
e
r
i
D
d
e
fi
c
e
p
S
–
n
o
i
t
a
r
e
n
u
m
e
r

l

a
t
o
T

L
E
N
N
O
S
R
E
P
T
N
E
M
E
G
A
N
A
M
Y
E
K
R
E
H
T
O

0
0
0
0
1

,

0
0
0
0
1

,

–

0
0
0
0
1

,

0
0
0
0
1

,

,

6
1
6
5
9
2

3
6
4
,
7
6
1

6
4
8
8
7

,

5
4
8
6
5
1

,

7
3
1
,
9
5
1

0
0
0
0
1

,

0
0
0
0
5

,

7
4
6
2
8
1

,

,

4
5
5
0
4
0
,
1

r
e
g
a
n
a
M

l

a
r
e
n
e
G

.

5
1
/
1
0
/
9
2
m
o
r
f

r
e
c
ffi
O
g
n
i
t
a
r
e
p
O

i

f
e
h
C
S
M

,

n
e
s
s
u
m
s
a
R

)

5
1
/
1
0
/
8
2
o
t
4
1
/
7
0
/
1
(

s
n
o
i
t
a
r
e
p
O
d
n
a
g
n
k
n
a
B
s
s
e
n
i
s
u
B

i

r
e
c
ffi
O
n
o
i
t
a
m
r
o
f
n

I

i

f
e
h
C
M
S

,

e

l
l
i

v
a
C

.

4
1
/
7
0
/
1
m
o
r
f

t
i
d
u
A

l

a
n
r
e
t
n

I

r
e
g
a
n
a
M

l

a
r
e
n
e
G
B
M

,

n
a
n
n
e
L
c
M

n
o
i
t
u
b
i
r
t
s
i
D
&
s
e
a
S
r
e
g
a
n
a
M

l

l

a
r
e
n
e
G
J
A

,

l

e
d
r
A
c
M

i

s
e
v
i
t
u
c
e
x
E
d
e
fi
c
e
p
S
–
n
o
i
t
a
r
e
n
u
m
e
r

l

a
t
o
T

)

4
1
/
6
0
/
0
3
o
t
3
1
/
7
0
/
1
(

r
e
c
ffi
O
k
s
i
R

i

f
e
h
C

i

g
n
k
n
a
B
s
s
e
n
i
s
u
B
&
y
t
r
a
P
d
r
i

Th

r
e
g
a
n
a
M

l

a
r
e
n
e
G
M
C

,
s
i
v
e
N

r
e
c
ffi
O

l

i

i

a
c
n
a
n
F
f
e
h
C
R
W

i

,
r
e
f
a
h
c
S

s
t
fi
e
n
e
b

l

t
n
e
m
y
o
p
m
e
t
s
o
P

l

s
t
fi
e
n
e
b
e
e
y
o
p
m
e
m
r
e
t
-
t
r
o
h
S

d
e
u
n
i
t
n
o
c

i

s
e
v
i
t
u
c
e
x
E
r
o
n
e
S
d
n
a
s
r
o
t
c
e
r
i

D
e
v
i
t
u
c
e
x
E
f
o
n
o
i
t
a
r
e
n
u
m
e
R

I

D
E
U
N
T
N
0
C
T
R
O
P
E
R
Y
R
O
T
U
T
A
T
S

’

S
R
O
T
C
E
R
D

I

5
1
0
2
E
N
U
J
0
3

I

D
E
U
N
T
N
O
C
T
R
O
P
E
R
N
O
T
A
R
E
N
U
M
E
R

I

38  /  ANNUAL REPORT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consequences of performance on shareholder wealth 
The tables below set out summary information about the consolidated entity’s earnings and movements in shareholder wealth for 
the five years to 30 June 2015:

30 June 
2015 
$

30 June 
2014 
$

30 June 
2013 
$

30 June 
2012 
$

30 June 
2011 
$

Net profit before tax

Net profit after tax

19,028,332

20,192,139

3,727,851

25,135,492

32,630,595

13,261,991

14,062,303

2,881,658

17,603,198

22,621,371

Share price at start of year

Share price at end of year

Interim dividend

Final dividend

Basic earnings per share

Diluted earnings per share

30 June 
2015

$5.50

$5.05

14.00 cps

16.00 cps

36.07 cps

36.07 cps

30 June 
2014

$5.25

$5.50

13.00 cps

15.00 cps

38.75 cps

38.75 cps

30 June 
2013

$5.81

$5.25

13.00 cps

4.00 cps

6.78 cps

6.78 cps

30 June 
2012

$8.50

$5.81

22.50 cps

25.00 cps

49.14 cps

49.14 cps

30 June 
2011

$10.20

$8.50

30.00 cps

30.00 cps

66.36 cps

66.36 cps

Dividends franked to 100% at 30% corporate income tax rate.

The performance rights carry no 
dividend or voting rights. Subject 
to the vesting conditions 33% of 
the performance rights vest on the 
second anniversary of the measured 
performance year, 33% on the third 
anniversary and 33% on the fourth 
anniversary. The vesting conditions  
are as follows: 

•  The Managing Director must be 
employed at the vesting date.

•  Any personal income tax payable on 
exercise of the performance rights is 
payable by the Managing Director.

•  The number of performance rights 
will be adjusted for any capital 
reconstructions (eg consolidation  
or splits).

EMPLOYMENT 
CONTRACTS
All named Key Management Personnel 
and the Managing Director have/had 
employment contracts. Major provisions 
of those agreements are summarised 
below:

Current Personnel
Managing Director – M J Barrett

•  Contract dated – 4 February 2013

•  Term of agreement – no fixed term

•  Auswide Bank Ltd or M J Barrett 
may terminate this agreement by 
providing six months written notice 
or provide payment in lieu of the 
notice period.

•  Short Term Incentive (STI) – The STI 
benefit will be payable on achieving 
Key Performance Indicators each 
year and will be a cash bonus of up 
to a maximum value of 30% of Fixed 
Pay subject to meeting performance 
targets. For details of the STI see (a).

•  Long Term Incentive (LTI) – Grant 
of performance rights up to a 
maximum value of 30% of Fixed Pay 
and as determined by the Board 
Remuneration Committee. For details 
of the LTI see (b).

(a)  Short Term Incentives

Up to 30% of base salary on achieving 
KPIs on the basis of percentage 
allocation in terms of CEO scorecard 
and measured by populating actual 
results and discretionary. The CEO  
must complete a full year of service  
to be eligible to receive the STI for  
each applicable financial year, the  
bonus entitlement will be calculated 
based on the 30th June results and 
the overall performance including 
discretionary as determined by the 
Board Remuneration Committee and 
paid on the 30th September.

(b)  Long Term Incentives

The grant of performance rights, under 
the terms of Auswide Performance 
Rights Plan Rules, to subscribe for or 
be transferred at no cost one share 
for every performance right exercised. 
The Managing Director must complete 
a full year of service to be eligible to 
receive the LTI for each applicable 
financial year, the bonus entitlement 
will be calculated based on the 30th 
June results and overall performance 
including discretionary as determined 
by the Board Remuneration Committee 
and paid on the 1st July. 

AUSWIDE BANK 

/  39 

LOANS TO KEY 
MANAGEMENT 
PERSONNEL
The following table outlines the 
aggregate of loans to key management 
personnel. Details are provided on 
an individual basis for each of the 
key management personnel whose 
indebtedness exceeded $100,000 at 
any time during this reporting period.

Loans have been made in accordance 
with the normal terms and conditions 
offered by the company and charged 
at 90 basis points below the standard 
variable rate or 20 basis points below 
the standard fixed rate on applicable 
loan types, available to the general 
public at any time. Similar rates are, 
however, available to the general 
public, therefore this interest rate would 
approximate an arm’s length interest 
rate offered by the company.

Loans are also made in accordance 
with the Staff Share Plan approved by 
shareholders in 1992. The loans are 
repayable over 5 years at 0% interest, 
with the loans being secured by a lien 
over the relevant shares. Such loans  
are only available to employees of  
the company and there is no  
applicable arm’s length interest  
to take into account.

EMPLOYMENT 
CONTRACTS 
CONTINUED

Chief Financial Officer & Company 
Secretary – W R Schafer

•  Contract dated – 28 May 2007

Chief Operating Officer –  
M S Rasmussen  
(from 29 January 2015)

General Manager – Business 
Banking & Operations  
(3 February 2014 to  
28 January 2015) 

•  Term of agreement – no fixed term

•  Original Contract dated –  

3 February 2014. Amended  
Contract dated – 29 January 2015

•  Term of agreement – no fixed term

•  Auswide Bank Ltd or M S Rasmussen 
may terminate this agreement by 
providing three months written 
notice or provide payment in lieu  
of the notice period.

General Manager – Sales & 
Distribution – A J McArdle

•  Contract dated 24 May 2013

•  Term of agreement – no fixed term

•  Auswide Bank Ltd or A J McArdle 
may terminate this agreement by 
providing three months written 
notice or provide payment in lieu  
of the notice period.

General Manager – Third Party & 
Business Banking – C M Nevis

•  Contract dated 25 April 2013

•  Term of agreement – no fixed term

•  Auswide Bank Ltd or C M Nevis 

may terminate this agreement by 
providing three months written 
notice or provide payment in lieu  
of the notice period.

•  Auswide Bank Ltd or W R Schafer 
may terminate this agreement by 
providing four months written notice 
or provide payment in lieu of the 
notice period.

•  Payment on early termination due 

to a takeover and not being offered 
ongoing employment in Bundaberg 
in an equivalent position, equal to  
six months salary plus two weeks 
salary per year of service with a 
minimum payment of 20 weeks and  
a maximum payment of 104 weeks.

Chief Risk Officer – C A Lonergan

•  Original Contract dated –  

10 February 2014. Amended 
Contract dated – 1 July 2014

•  Term of agreement – no fixed term

•  Auswide Bank Ltd or C A Lonergan 
may terminate this agreement by 
providing three months written 
notice or provide payment in lieu  
of the notice period.

Chief Information Officer –  
S M Caville

•  Contract dated 1 November 2010

•  Term of agreement – no fixed term

•  Auswide Bank Ltd or S M Caville 
may terminate this agreement by 
providing four months written notice 
or provide payment in lieu of the 
notice period.

•  Payment on early termination due 

to a takeover and not being offered 
ongoing employment in Bundaberg 
in an equivalent position, equal to  
six months salary plus two weeks 
salary per year of service with a 
minimum payment of 20 weeks and  
a maximum payment of 104 weeks.

40  /  ANNUAL REPORT

DIRECTORS’ STATUTORY REPORT C0NTINUED30 JUNE 2015Loans for the year ended 30 June 2015

Directors

Executives

Total: Key management personnel

Loans for the year ended 30 June 2014

Directors

Executives

Total: Key management personnel

Individuals with loans above $100,000  
in reporting period

Directors

MJ Barrett

Executives

WR Schafer

AJ McArdle

CM Nevis

Balance* 
30 June 
2014

Interest 
charged 
$

(832,385)

23,540

(873,403)

(1,705,788)

51,021

74,561

Balance* 
30 June 2013 
$

(1,599,467)

(2,135,033)

(3,734,500)

Interest 
charged 
$

22,289

32,899

55,188

Balance* 
30 June 
2015

(694,675)

(1,643,366)

(2,338,041)

Balance* 
30 June 
2014 
$

(832,385)

(873,403)

(1,705,788)

Number in 
Group 
30 June 
2015

1

5

6

Number in 
Group 
30 June 
2014

2

3

5

Write-off 
$

–

–

–

Write–off 
$

–

–

–

Balance 
30 June 
2014 
$

Interest** 
charged 
$

Write–off 
$

Balance* 
30 June 
2015 
$

Highest in 
period 
$

(562,742)

23,540

(494,427)

(339,820)

–

22,472

16,333

11,770

–

–

–

–

(694,675)

(705,443)

(512,473)

(575,385)

(388,510)

(403,714)

(675,621)

(695,722)

Does not include SM Caville or CA Lonergan as their loans were less than $100,000.

* Balance at financial year end or the date the individuals ceased being key management personnel.

** Actual interest charged is affected by the use of the company’s offset account.

Balances are for the period individuals were considered key management personnel.

AUSWIDE BANK 

/  41 

EQUITY HOLDINGS AND TRANSACTIONS
The following table is in respect of ordinary shares held directly, indirectly or beneficially by key management personnel.

Balance 
30 June 2014

Received as 
remuneration

Options 
exercised

Net change  
other

Balance* 
30 June 2015

–

–

–

–

–

–

–

–

–

–

–

74,535

15,000

–

–

7,540

8,601

13,348

8,032

31,551

122,314

15,000

1,077,567

42,076

23,290

44,240

15,113

8,032

127,056

1,379,183

•  The non-audit services provided do 

not undermine the general principles 
relating to auditor independence as 
set out in APES 110 Code of Ethics 
for Professional Accountants issued 
by the Accounting Professional and 
Ethical Standards Board, as they 
did not involve reviewing or auditing 
the Auditor’s own work, acting in 
a management or decision making 
capacity for the Company, acting 
as an advocate for the Company or 
jointly sharing risks and rewards.

A copy of the Auditor’s Independence 
Declaration, as required under Section 
307C of the Corporations Act 2001,  
is included in the Directors’  
Statutory Report.

Directors

JS Humphrey

MJ Barrett

GN Kenny

PJ Sawyer

B Dangerfield

Executives

WR Schafer

SM Caville

AJ McArdle

CM Nevis

Total

31,551

41,000

–

1,077,567

42,076

15,750

35,639

1,765

–

–

6,779

–

–

–

–

–

–

–

1,245,348

6,779

* Balance at financial year end or the date the individuals ceased being key management personnel.

NON-AUDIT 
SERVICES
During the year, Deloitte Touche 
Tohmatsu, the Company’s Auditor, 
together with Bentleys, the previous 
Company’s Auditor, have performed 
certain other services in addition to their 
statutory duties.

The Board has considered the non-
audit services provided during the year 
by the Auditors, and in accordance 
with advice provided by the Board 
Audit Committee, is satisfied that the 
provision of those non-audit services 
during the year by the Auditors 
is compatible with, and did not 
compromise, the auditor independence 
requirements of the Corporations Act 
2001 for the following reasons:

•  All non-audit services were subject 

to the Corporate Governance 
procedures adopted by the Company 
and have been reviewed by the 
Board Audit Committee to ensure 
they do not impact the integrity and 
objectivity of the Auditor, and

INDEMNITIES 
AND INSURANCE 
PREMIUMS FOR 
OFFICERS AND 
AUDITORS
During the financial year the Company 
has paid premiums to indemnify 
Directors and Officers against personal 
losses arising from their respective 
positions within the Company. During 
the reporting period and subsequent 
to 30 June 2015, no amounts have 
been paid under the indemnities by  
the Company.

The Directors and Officers of the 
Company and its subsidiaries are 
insured against certain liabilities arising 
in the course of their duties. This 
premium is paid by the Company but 
under the confidentiality provisions 
of this policy, the Directors have not 
disclosed the nature of the liability, 
the insurer, the limit of liability, or the 
premiums paid.

The company has not otherwise, during 
or since the end of the financial year, 
except to the extent permitted by law, 
indemnified or agreed to indemnify  
an officer or auditor of the company  
or of any related body corporate against 
a liability incurred as such an officer  
or auditor.

42  /  ANNUAL REPORT

DIRECTORS’ STATUTORY REPORT C0NTINUED30 JUNE 2015Non-audit services paid to Deloitte Touche Tohmatsu are as follows:

Services provided in connection with:

Other assurance services

Non-audit services paid to Bentleys are as follows:

Services provided in connection with:

Tax returns (including subsidiaries)

Other assurance services

Other services

2015 
$

16,414

16,414

2015 
$

24,741

6,753

1,883

33,377

2014 
$

–

–

2014 
$

16,589

68,090

17,903

102,582

This Report is signed for and on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

JS Humphrey 
Director   

Brisbane 
28 August 2015

SC Birkensleigh 
Director

AUSWIDE BANK 

/  43 

 
 
 
 
 
 
AUDITOR’S INDEPENDENCE DECLARATION

Deloitte Touche Tohmatsu
ABN 74 490 121 060
Riverside Centre
Level 25
123 Eagle Street
Brisbane  QLD  4000

Tel:   +61 7 3308 7000
Fax:  +61 7 3308 7001
www.deloitte.com.au

The Board of Directors
Auswide Bank Ltd
PO Box 1063
BUNDABERG QLD 4670

28 August 2015

Dear Board Members

Auswide Bank Ltd

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Auswide Bank Ltd.

As lead audit partner for the audit of the financial statements of Auswide Bank Ltd for the
financial year ended 30 June 2015, I declare that to the best of my knowledge and belief, there
have been no contraventions of:

(i)

the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Jamie C.J. Gatt
Partner
Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

44  /  ANNUAL REPORT

CONSOLIDATED STATEMENT OF PROFIT OR  
LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015

Interest revenue

Borrowing costs

Net interest revenue

Other non interest revenue

Employee benefits expense

Depreciation expense

Amortisation expense

Occupancy expense

Bad and doubtful debts expense

Other expenses

Profit before income tax

Income tax expense

Profit from continuing operations

Other comprehensive income

Items that may be reclassified to profit or loss

Revaluation of Cash Flow Hedge to fair value

Income tax relating to this item

Revaluation of RMBS investments to fair value

Income tax relating to this item

Items that will not be reclassified to profit or loss

Revaluation of land and buildings to fair value

Income tax relating to this item

Consolidated

Chief entity

Notes

2015 
$

2014 
$

2015 
$

2014 
$

2

2

3

10

3

127,397,139

134,202,850

127,000,350

133,590,585

(76,194,046)

(84,549,451)

(76,470,296)

(84,701,389)

51,203,093

49,653,399

50,530,054

48,889,196

9,806,713

10,238,336

9,547,469

9,695,452

18,926,412

18,539,500

18,926,412

18,539,500

1,332,181

1,195,961

1,272,729

338,371

359,973

338,371

1,134,711

359,973

2,639,189

2,575,074

2,757,216

2,671,149

457,948

360,473

457,948

360,000

18,287,373

16,668,615

17,937,818

17,107,260

19,028,332

20,192,139

18,387,029

18,412,055

4

5,766,341

6,129,836

5,644,373

5,465,747

13,261,991

14,062,303

12,742,656

12,946,308

(1,466,387)

439,916

(12,553)

3,766

–

–

(27,126)

8,138

(1,466,387)

439,916

(12,553)

3,766

–

–

(27,126)

8,138

(809,882)

242,965

–

–

266,292

(79,887)

–

–

Other comprehensive income/(loss) for the year

(1,602,175)

(18,988)

(848,853)

(18,988)

Total comprehensive income for the year

11,659,816

14,043,315

11,893,803

12,927,320

Profit is attributable to:

Owners of the parent entity

Non-controlling interests

Total comprehensive income attributable to:

Owners of the parent entity

Non-controlling interests

Earnings per share

13,261,991

14,062,638

12,742,656

12,946,308

–

(335)

–

–

13,261,991

14,062,303

12,742,656

12,946,308

11,659,816

14,043,650

11,893,803

12,927,320

–

(335)

–

–

11,659,816

14,043,315

11,893,803

12,927,320

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)

28

28

36.07

36.07

38.75

38.75

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the 
accompanying notes.

AUSWIDE BANK 

/  45 

CONSOLIDATED STATEMENT  
OF FINANCIAL POSITION
AS AT 30 JUNE 2015

ASSETS

Cash and cash equivalents

Due from other financial institutions

Accrued receivables

Financial assets

Current tax assets

Loans and advances

Other investments

Property, plant and equipment

Deferred income tax assets

Other assets

Goodwill

Total assets

LIABILITIES

Consolidated

Chief entity

Notes

2015 
$

2014 
$

2015 
$

2014 
$

6

7

8

9

13

51,495,421

63,604,301

47,885,421

52,754,096

9,215,436

10,286,421

9,215,436

10,286,421

5,923,807

11,662,495

5,951,149

11,591,133

244,906,350

248,117,712

241,795,888

242,626,415

256,206

149,714

256,206

149,714

10 2,330,122,246 2,223,974,886 2,331,008,305 2,224,977,803

11

12

13

14

15

394,658

336,504

15,653,663

15,596,450

17,946,390

18,070,737

15,699,626

14,688,347

5,903,417

6,690,630

5,702,766

6,427,718

8,802,512

9,244,871

8,563,542

8,929,300

42,057,110

42,057,110

42,057,110

42,057,110

2,717,023,553

2,634,195,381

2,723,789,112 2,630,084,507

Deposits and short term borrowings

16 1,852,071,695

1,743,812,432 1,865,895,790 1,749,493,593

Payables and other liabilities

Securitised loans

Deferred income tax liabilities

Provisions

Subordinated capital notes

Total liabilities

Net assets

EQUITY

Parent entity interest in equity

Contributed equity

Reserves

Retained profits

Total parent entity interest in equity

Non-controlling interests

Contributed equity

Retained profits

Total non-controlling interests

17

10

18

19

20

21

22

23

24,581,026

21,109,505

23,854,618

20,023,248

603,657,502

634,130,085

603,657,502

634,130,085

1,563,280

2,267,848

1,393,064

1,774,780

7,159,978

8,897,253

2,704,060

2,739,880

28,000,000

28,000,000

28,000,000

28,000,000

2,517,033,481

2,438,217,123 2,525,505,034

2,436,161,586

199,990,072

195,978,258

198,284,078

193,922,921

166,636,661

163,550,831

166,636,661

163,550,831

13,817,409

14,482,677

13,533,572

14,482,677

19,536,002

18,015,375

18,113,845

15,889,413

199,990,072

196,048,883

198,284,078

193,922,921

–

–

–

1,000

(71,625)

(70,625)

–

–

–

–

–

–

Total equity

199,990,072

195,978,258

198,284,078

193,922,921

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

46  /  ANNUAL REPORT

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015

Cash flows from operating activities

Interest received

Dividends received

Borrowing costs

Consolidated

Chief entity

Notes

2015 
$

2014 
$

2015 
$

2014 
$

126,995,487

133,883,448

126,598,697

133,271,184

221

217

221

750,217

(74,642,405)

(88,626,461)

(74,918,655)

(88,778,400)

Other non interest income received

16,441,205

11,317,422

16,081,527

10,376,279

Cash paid to suppliers and employees (inclusive of 
goods and services tax)

(33,019,046)

(39,359,058)

(31,117,928)

(35,079,068)

Income tax paid

(5,426,392)

(4,734,893)

(5,043,833)

(4,734,893)

Net cash flows from operating activities

24

30,349,070

12,480,675

31,600,029

15,805,319

Cash flows from investing activities

Net (increase)/decrease in investment securities

3,198,809

22,354,871

817,974

20,883,720

Net (increase)/decrease in amounts due from other 
financial institutions

1,070,985

(5,106,235)

1,070,985

(5,106,235)

Net (increase)/decrease in loans

(112,735,553)

1,969,311

(112,618,695)

(828,577)

Net (increase)/decrease in other investments

(58,154)

250,000

(57,213)

250,000

Purchase of non current assets

(2,761,940)

(2,667,484)

(2,761,940)

(2,667,484)

Proceeds from sale of property, plant and equipment

290,521

–

290,521

–

Net cash used in investing activities

(110,995,332)

16,800,463

(113,258,368)

12,531,424

Cash flows from financing activities

Net increase/(decrease) in deposits and other 
borrowings

Net increase/(decrease) in amounts due to other 
financial institutions and other liabilities

Proceeds from share issue

Dividends paid

108,447,021

38,457,541

116,590,955

39,005,642

(32,375,001)

(74,219,680)

(32,266,653)

(74,219,680)

3,084,830

264,436

3,084,830

264,436

(10,619,468)

(5,172,303)

(10,619,468)

(5,172,303)

Net cash flows from financing activities

68,537,382

(40,670,006)

76,789,664

(40,121,905)

Net increase/(decrease) in cash and cash equivalents

(12,108,880)

(11,388,868)

(4,868,675)

(11,785,162)

Cash at beginning of financial year

63,604,301

74,993,169

52,754,096

64,539,258

Cash at end of financial year

6

51,495,421

63,604,301

47,885,421

52,754,096

For the purposes of the consolidated statement of cash flows, cash includes cash on hand and deposits on call.  
The cash at the end of the year can be agreed directly to the consolidated statement of financial position.

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

AUSWIDE BANK 

/  47 

$

l

a
t
o
T

y
t
i
u
q
e

$

7
3
9
,
1
2
9
6
8
1

,

)

0
9
2
0
7
(

,

9
0
3
5
8
1

,

,

9
5
2
8
8
9

)

,

2
6
5
0
6
1
,
6

(

–

–

–

,

8
3
6
2
6
0
4
1

,

)

5
3
3

(

)

6
2
1
,
7
2

(

8
3
1
,
8

,

2
5
2
5
6
9
0
0
2

,

–

–

–

)

5
3
3

(

)

5
2
6
0
7
(

,

,

8
5
2
8
7
9
5
9
1

,

,

8
5
2
8
7
9
5
9
1

,

)

5
2
6
0
7
(

,

)

5
2
6
0
7
(

,

–

1
4
6
8
3

,

6
9
1
,
5
4
2

)

3
5
5
2
1
(

,

6
6
7
,
3

,

2
9
2
6
6
2

)
7
8
8
9
7
(

,

,

6
1
9
9
3
4

,

)
7
8
3
6
6
4
,
1
(

2
9
0
9
1
4

,

8
3
7
,
6
6
6
2

,

1
1
7
,
3
2
5
,
7
0
2

)

,

8
6
4
9
1
6
0
1
(

,

)

,

8
3
6
3
3
5
,
7
(

,

3
7
0
0
9
9
9
9
1

,

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

)
7
4
1
,
2
2
2
,
1
(

1
9
9
,
1
6
2
3
1

,

–

–

5
2
6
0
7

,

5
2
6
0
7

,

-
n
o
N

g
n

i
l
l

o
r
t
n
o
c

-
e
r
a
h
S

d
e
s
a
b

s
t
s
e
r
e
t
n

i

s
t
n
e
m
y
a
p

i

g
n
g
d
e
h

e
v
r
e
s
e
r

w
o
fl
h
s
a
C

l

e
b
a

l
i

a
v
A

l

u
f
t
b
u
o
D

t
e
s
s
A

d
t
L
k
n
a
B
e
d
w
s
u
A

i

f
o
s
r
e
n
w
o
o
t
e
b
a
t
u
b
i
r
t
t
A

l

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

)

4
4
5
3
5
3

,

–

–

–

–

–

–

6
9
1
,
5
4
2

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

(

,

6
1
9
9
3
4

,

)
7
8
3
6
6
4
,
1
(

$

l

e
a
s

r
o
f

e
v
r
e
s
e
r

$

s
t
b
e
d

e
v
r
e
s
e
r

6
6
5
5
8
1

,

0
1
8
,
7
8
3
2

,

–

–

)

6
2
1
,
7
2

(

8
3
1
,
8

–

–

–

–

–

–

–

–

–

–

8
7
5
6
6
1

,

0
1
8
,
7
8
3
2

,

8
7
5
6
6
1

,

0
1
8
,
7
8
3
2

,

8
7
5
6
6
1

,

0
1
8
,
7
8
3
2

,

–

–

–

–

–

–

–

–

–

–

)

3
5
5
2
1
(

,

6
6
7
,
3

–

–

–

–

–

–

–

–

–

–

–

–

$

e
v
r
e
s
e
r

y
r
o
t
u
t
a
t
S

$

l

a
r
e
n
e
G

e
v
r
e
s
e
r

$

$

e
v
r
e
s
e
r

s
t
fi
o
r
p

n
o
i
t
a
u
a
v
e
r

l

i

d
e
n
a
t
e
R

$

e
r
a
h
S

l

a
t
i
p
a
c

y
r
a
n
d
r
o

i

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

9
7
2
8
1
4
3

,

,

9
9
2
3
1
1
,
0
1

3
6
2
,
7
7
3
2
6
1

,

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

9
7
2
8
1
4
3

,

–

–

–

,

8
3
6
2
6
0
4
1

,

–

–

–

–

–

–

9
0
3
5
8
1

,

,

9
5
2
8
8
9

,

7
3
9
5
7
1
,
4
2

3
6
2
,
7
7
3
2
6
1

,

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

5
8
1
,
2
9
3

–

–

,

2
9
2
6
6
2

)
7
8
8
9
7
(

,

–

–

–

–

–

–

–

–

–

–

–

–

)
7
4
1
,
2
2
2
,
1
(

1
9
9
,
1
6
2
3
1

,

,

)
1
5
2
0
0
1
(

,

1
5
2
0
0
1

–

–

–

–

–

–

–

–

–

–

–

–

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

9
7
2
8
1
4
3

,

,

5
7
3
5
1
0
8
1

,

,

1
3
8
0
5
5
3
6
1

,

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

9
7
2
8
1
4
3

,

,

5
7
3
5
1
0
8
1

,

,

1
3
8
0
5
5
3
6
1

,

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

)

,

8
4
3
8
0
1
(

,

)
1
7
4
6
2
0
,
1
(

1
9
7
,
7
5
1

0
1
8
,
7
8
3
2

,

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

8
1
6
6
9
8
3

,

–

–

,

0
7
4
5
5
1
,
0
3

)

,

8
6
4
9
1
6
0
1
(

,

–

2
9
0
9
1
4

,

8
3
7
,
6
6
6
2

,

,

1
3
8
0
5
5
3
6
1

,

)

,

8
6
4
9
1
6
0
1
(

,

,

0
3
8
5
8
0
3

,

e
u
a
v

l

r
i
a
f
o
t

s
t
n
e
m
t
s
e
v
n

i

S
B
M
R

l

f
o
n
o
i
t
a
u
a
v
e
r
o
t
e
u
d
e
s
a
e
r
c
e
D

y
n
a
p
m
o
c

t
n
e
r
a
p
f
o
s
r
e
b
m
e
m
o
t
e
b
a
t
u
b
i
r
t
t
a
t
fi
o
r
P

l

s
t
s
e
r
e
t
n

i

g
n

i
l
l

l

o
r
t
n
o
c
-
n
o
n
o
t
e
b
a
t
u
b
i
r
t
t
a
t
fi
o
r
P

:
r
a
e
y
e
h
t

r
o
f
e
m
o
c
n

i

e
v
i
s
n
e
h
e
r
p
m
o
c

l

a
t
o
T

3
1
0
2
y
u
J

l

1

t
a
e
c
n
a
a
B

l

y
t
i
t
n
e
d
e
t
a
d

i
l

o
s
n
o
C

S
B
M
R

l

f
o
n
o
i
t
a
u
a
v
e
r
n
o
t
n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

x
a
t
d
e
r
r
e
f
e
D

s
t
n
e
m
t
s
e
v
n

i

l

a
t
o
t
-
b
u
S

l

n
a
p
e
r
a
h
s
ff
a
t
s

r
o
f

l

a
t
i
p
a
c
e
r
a
h
s

f
o
e
u
s
s
I

l

n
a
p
t
n
e
m
t
s
e
v
n
e
r
d
n
e
d
v
d
r
o
f

i

i

i

l

a
t
i
p
a
c
e
r
a
h
s

f
o
e
u
s
s
I

l

d
o
s
e
c
n
i
s

s
t
e
s
s
a
f
o
n
o
i
t
a
u
a
v
e
r

l

f
o
s
t
fi
o
r
p
d
e
n
a
t
e
r
o
t

i

r
e
f
s
n
a
r
T

n
o
i
t
a
d

i
l

o
s
n
o
c
n
o
e
v
r
e
s
e
r

m
o
r
f
/
o
t

r
e
f
s
n
a
r
T

l

s
e
e
y
o
p
m
e
o
t

s
e
r
a
h
s

f
o
e
u
s
s
I

e
u
a
v

l

r
i
a
f
o
t

s
t
n
e
m
t
s
e
v
n

i

S
B
M
R

l

f
o
n
o
i
t
a
u
a
v
e
r
o
t
e
u
d
e
s
a
e
r
c
e
D

y
n
a
p
m
o
c

t
n
e
r
a
p
f
o
s
r
e
b
m
e
m
o
t
e
b
a
t
u
b
i
r
t
t
a
t
fi
o
r
P

l

:
r
a
e
y
e
h
t

r
o
f
e
m
o
c
n

i

e
v
i
s
n
e
h
e
r
p
m
o
c

l

a
t
o
T

s
t
s
e
r
e
t
n

i

g
n

i
l
l

o
r
t
n
o
c
-
n
o
n
f
o
n
o
i
t
a
d

i
l

o
s
n
o
c
e
D

i

y
r
a
d
i
s
b
u
s
n

i

t
n
e
m
t
s
e
v
n

i

f
o
n
o
i
t
a
c
fi
i
s
s
a
c
e
R

l

4
1
0
2
y
u
J

l

1

t
a
e
c
n
a
a
B

l

4
1
0
2
e
n
u
J
0
3
t
a
e
c
n
a
a
B

l

e
u
a
v

l

r
i
a
f
o
t

s
g
n
d

i

l
i

u
b
d
n
a
d
n
a

l

l

f
o
n
o
i
t
a
u
a
v
e
r
o
t
e
u
d
e
s
a
e
r
c
n

I

d
n
a
d
n
a

l

l

f
o
n
o
i
t
a
u
a
v
e
r
n
o
t
n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

x
a
t
d
e
r
r
e
f
e
D

S
B
M
R

l

f
o
n
o
i
t
a
u
a
v
e
r
n
o
t
n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

x
a
t
d
e
r
r
e
f
e
D

s
t
n
e
m
t
s
e
v
n

i

s
g
n
d

i

l
i

u
b

e
g
d
e
h
w
o
fl
h
s
a
c

l

f
o
n
o
i
t
a
u
a
v
e
r
n
o
t
n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

x
a
t
d
e
r
r
e
f
e
D

l

a
t
o
t
-
b
u
S

e
u
a
v

l

r
i
a
f
o
t
e
g
d
e
h
w
o
fl
h
s
a
c

l

f
o
n
o
i
t
a
u
a
v
e
r
o
t
e
u
d
e
s
a
e
r
c
e
D

l

n
a
p
e
r
a
h
s
ff
a
t
s

r
o
f

l

a
t
i
p
a
c
e
r
a
h
s

f
o
e
u
s
s
I

l

n
a
p
t
n
e
m
t
s
e
v
n
e
r
d
n
e
d
v
d
r
o
f

i

i

i

l

a
t
i
p
a
c
e
r
a
h
s

f
o
e
u
s
s
I

s
e
r
a
h
s

i

i

y
r
a
n
d
r
o
–
d
a
p
r
o
r
o
f
d
e
d
v
o
r
p
s
d
n
e
d
v
D

i

i

i

)

,

2
6
5
0
6
1
,
6

(

–

s
e
r
a
h
s

i

i

y
r
a
n
d
r
o
–
d
a
p
r
o
r
o
f
d
e
d
v
o
r
p
s
d
n
e
d
v
D

i

i

i

)

,

8
4
3
8
0
1
(

,

)
1
7
4
6
2
0
,
1
(

1
9
7
,
7
5
1

0
1
8
,
7
8
3
2

,

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

8
1
6
6
9
8
3

,

,

2
0
0
6
3
5
9
1

,

,

1
6
6
6
3
6
6
6
1

,

5
1
0
2
e
n
u
J
0
3
t
a
e
c
n
a
a
B

l

i

.
s
e
t
o
n
g
n
y
n
a
p
m
o
c
c
a
e
h
t
h
t
i

w
n
o
i
t
c
n
u
n
o
c
n

j

i

d
a
e
r
e
b
d
u
o
h
s

l

y
t
i
u
q
e
n

i

s
e
g
n
a
h
c

f
o
t
n
e
m
e
t
a
t
s
d
e
t
a
d

i
l

o
s
n
o
c
e
v
o
b
a
e

Th

I

Y
T
U
Q
E
N

I

S
E
G
N
A
H
C
F
O
T
N
E
M
E
T
A
T
S
D
E
T
A
D
L
O
S
N
O
C

I

5
1
0
2
E
N
U
J
0
3
D
E
D
N
E
R
A
E
Y
E
H
T
R
O
F

48  /  ANNUAL REPORT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$

l

a
t
o
T

y
t
i
u
q
e

,

5
9
5
2
8
9
5
8
1

,

,

8
0
3
6
4
9
2
1

,

8
3
1
,
8

)

6
2
1
,
7
2

(

,

5
1
9
9
0
9
8
9
1

,

9
0
3
5
8
1

,

,

9
5
2
8
8
9

)

,

2
6
5
0
6
1
,
6

(

,

1
2
9
2
2
9
3
9
1

,

,

1
2
9
2
2
9
3
9
1

,

–

6
6
7
,
3

)

3
5
5
2
1
(

,

)
7
8
8
9
7
(

,

,

2
9
2
6
6
2

,

9
4
6
3
4
7
,
2
1

,

6
1
9
9
3
4

,

)
7
8
3
6
6
4
,
1
(

7
1
7
,
7
1
8
5
0
2

,

2
9
0
9
1
4

,

8
3
7
,
6
6
6
2

,

)

,

8
6
4
9
1
6
0
1
(

,

,

9
7
0
4
8
2
8
9
1

,

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

-
n
o
N

g
n

i
l
l

o
r
t
n
o
c

-
e
r
a
h
S

d
e
s
a
b

s
t
s
e
r
e
t
n

i

s
t
n
e
m
y
a
p

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

i

g
n
g
d
e
h

e
v
r
e
s
e
r

,

6
1
9
9
3
4

,

)
7
8
3
6
6
4
,
1
(

w
o
fl
h
s
a
C

l

e
b
a

l
i

a
v
A

l

u
f
t
b
u
o
D

t
e
s
s
A

$

l

e
a
s

r
o
f

e
v
r
e
s
e
r

$

s
t
b
e
d

e
v
r
e
s
e
r

6
6
5
5
8
1

,

0
1
8
,
7
8
3
2

,

–

8
3
1
,
8

)

6
2
1
,
7
2

(

–

–

–

8
7
5
6
6
1

,

0
1
8
,
7
8
3
2

,

–

–

–

–

–

–

8
7
5
6
6
1

,

0
1
8
,
7
8
3
2

,

8
7
5
6
6
1

,

0
1
8
,
7
8
3
2

,

$

e
v
r
e
s
e
r

y
r
o
t
u
t
a
t
S

$

l

a
r
e
n
e
G

e
v
r
e
s
e
r

$

$

e
v
r
e
s
e
r

s
t
fi
o
r
p

n
o
i
t
a
u
a
v
e
r

l

i

d
e
n
a
t
e
R

$

e
r
a
h
S

l

a
t
i
p
a
c

y
r
a
n
d
r
o

i

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

9
7
2
8
1
4
3

,

–

–

–

–

–

–

–

–

–

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

9
7
2
8
1
4
3

,

–

–

–

–

–

–

–

–

–

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

9
7
2
8
1
4
3

,

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

9
7
2
8
1
4
3

,

,

7
6
6
3
0
1
,
9

3
6
2
,
7
7
3
2
6
1

,

,

8
0
3
6
4
9
2
1

,

–

–

–

–

,

5
7
9
9
4
0
2
2

,

–

–

–

9
0
3
5
8
1

,

,

9
5
2
8
8
9

3
6
2
,
7
7
3
2
6
1

,

,

3
1
4
9
8
8
5
1

,

,

1
3
8
0
5
5
3
6
1

,

,

3
1
4
9
8
8
5
1

,

,

1
3
8
0
5
5
3
6
1

,

–

–

–

–

–

–

6
6
7
,
3

)

3
5
5
2
1
(

,

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

,

2
9
2
6
6
2

)
7
8
8
9
7
(

,

–

–

–

–

–

–

,

)
1
5
2
0
0
1
(

,

1
5
2
0
0
1

–

,

9
4
6
3
4
7
,
2
1

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

,

)
1
7
4
6
2
0
,
1
(

1
9
7
,
7
5
1

0
1
8
,
7
8
3
2

,

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

3
3
4
4
0
5
3

,

–

–

,

3
1
3
3
3
7
,
8
2

)

,

8
6
4
9
1
6
0
1
(

,

–

2
9
0
9
1
4

,

8
3
7
,
6
6
6
2

,

,

1
3
8
0
5
5
3
6
1

,

s
t
n
e
m
t
s
e
v
n

i

S
B
M
R

l

f
o
n
o
i
t
a
u
a
v
e
r
n
o
t
n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

x
a
t
d
e
r
r
e
f
e
D

l

a
t
o
t
-
b
u
S

l

n
a
p
e
r
a
h
s
ff
a
t
s

r
o
f

l

a
t
i
p
a
c
e
r
a
h
s

f
o
e
u
s
s
I

e
u
a
v

l

r
i
a
f
o
t

s
t
n
e
m
t
s
e
v
n

i

S
B
M
R

l

f
o
n
o
i
t
a
u
a
v
e
r
o
t
e
u
d
e
s
a
e
r
c
e
D

y
n
a
p
m
o
c

t
n
e
r
a
p
f
o
s
r
e
b
m
e
m
o
t
e
b
a
t
u
b
i
r
t
t
a
t
fi
o
r
P

l

:
r
a
e
y
e
h
t

r
o
f
e
m
o
c
n

i

e
v
i
s
n
e
h
e
r
p
m
o
c

l

a
t
o
T

3
1
0
2
y
u
J

l

1

t
a
e
c
n
a
a
B

l

y
t
i
t
n
e
f
e
h
C

i

l

n
a
p
t
n
e
m
t
s
e
v
n
e
r
d
n
e
d
v
d
r
o
f

i

i

i

l

a
t
i
p
a
c
e
r
a
h
s

f
o
e
u
s
s
I

e
u
a
v

l

r
i
a
f
o
t

s
t
n
e
m
t
s
e
v
n

i

S
B
M
R

l

f
o
n
o
i
t
a
u
a
v
e
r
o
t
e
u
d
e
s
a
e
r
c
e
D

l

d
o
s
e
c
n
i
s

s
t
e
s
s
a
f
o
n
o
i
t
a
u
a
v
e
r

l

f
o
s
t
fi
o
r
p
d
e
n
a
t
e
r
o
t

i

r
e
f
s
n
a
r
T

y
n
a
p
m
o
c

t
n
e
r
a
p
f
o
s
r
e
b
m
e
m
o
t
e
b
a
t
u
b
i
r
t
t
a
t
fi
o
r
P

l

:
r
a
e
y
e
h
t

r
o
f
e
m
o
c
n

i

e
v
i
s
n
e
h
e
r
p
m
o
c

l

a
t
o
T

4
1
0
2
y
u
J

l

1

t
a
e
c
n
a
a
B

l

4
1
0
2
e
n
u
J
0
3
t
a
e
c
n
a
a
B

l

s
t
n
e
m
t
s
e
v
n

i

S
B
M
R

l

f
o
n
o
i
t
a
u
a
v
e
r
n
o
t
n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

x
a
t
d
e
r
r
e
f
e
D

e
u
a
v

l

r
i
a
f
o
t

s
g
n
d

i

l
i

u
b
d
n
a
d
n
a

l

l

f
o
n
o
i
t
a
u
a
v
e
r
o
t
e
u
d
e
s
a
e
r
c
n

I

s
g
n
d

i

l
i

u
b
d
n
a
d
n
a

l

l

f
o
n
o
i
t
a
u
a
v
e
r
n
o
t
n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

x
a
t
d
e
r
r
e
f
e
D

e
g
d
e
h
w
o
fl
h
s
a
c

l

f
o
n
o
i
t
a
u
a
v
e
r
n
o
t
n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

x
a
t
d
e
r
r
e
f
e
D

l

a
t
o
t
-
b
u
S

e
u
a
v

l

r
i
a
f
o
t
e
g
d
e
h
w
o
fl
h
s
a
c

l

f
o
n
o
i
t
a
u
a
v
e
r
o
t
e
u
d
e
s
a
e
r
c
e
D

l

n
a
p
e
r
a
h
s
ff
a
t
s

r
o
f

l

a
t
i
p
a
c
e
r
a
h
s

f
o
e
u
s
s
I

l

n
a
p
t
n
e
m
t
s
e
v
n
e
r
d
n
e
d
v
d
r
o
f

i

i

i

l

a
t
i
p
a
c
e
r
a
h
s

f
o
e
u
s
s
I

s
e
r
a
h
s

i

i

y
r
a
n
d
r
o
–
d
a
p
r
o
r
o
f
d
e
d
v
o
r
p
s
d
n
e
d
v
D

i

i

i

)

,

2
6
5
0
6
1
,
6

(

–

s
e
r
a
h
s

i

i

y
r
a
n
d
r
o
–
d
a
p
r
o
r
o
f
d
e
d
v
o
r
p
s
d
n
e
d
v
D

i

i

i

,

)
1
7
4
6
2
0
,
1
(

1
9
7
,
7
5
1

0
1
8
,
7
8
3
2

,

,

1
7
0
6
7
6
2

,

,

9
3
9
3
3
8
5

,

,

3
3
4
4
0
5
3

,

,

5
4
8
3
1
1
,
8
1

,

1
6
6
6
3
6
6
6
1

,

5
1
0
2
e
n
u
J
0
3
t
a
e
c
n
a
a
B

l

i

.
s
e
t
o
n
g
n
y
n
a
p
m
o
c
c
a
e
h
t
h
t
i

w
n
o
i
t
c
n
u
n
o
c
n

j

i

d
a
e
r
e
b
d
u
o
h
s

l

y
t
i
u
q
e
n

i

s
e
g
n
a
h
c

f
o
t
n
e
m
e
t
a
t
s
d
e
t
a
d

i
l

o
s
n
o
c
e
v
o
b
a
e

Th

AUSWIDE BANK 

/  49 

I

D
E
U
N
T
N
O
C
Y
T
U
Q
E
N

I

I

S
E
G
N
A
H
C
F
O
T
N
E
M
E
T
A
T
S
D
E
T
A
D
L
O
S
N
O
C

I

5
1
0
2
E
N
U
J
0
3
D
E
D
N
E
R
A
E
Y
E
H
T
R
O
F

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO THE CONSOLIDATED  
FINANCIAL STATEMENTS
30 JUNE 2015

NOTE 1 BASIS OF 
PREPARATION 
The financial report is a general 
purpose financial report, which has 
been prepared in accordance with 
the requirements of the Corporations 
Act 2001 and Australian Accounting 
Standards and complies with other 
requirements of the law. The financial 
report has also been prepared on a 
historical cost basis, except for land and 
buildings, hedging instruments, financial 
assets held at fair value through profit 
or loss, and available-for-sale financial 
assets that have been measured at fair 
value. All amounts are denominated in 
Australian Dollars (AUD).

The financial report complies with 
Australian Accounting Standards, 
which include Australian equivalents 
to International Financial Reporting 
Standards (‘AIFRS’). Compliance with 
AIFRS ensures that the financial report, 
comprising the financial statements 
and notes thereto, complies with 
International Financial Reporting 
Standards (‘IFRS’).

The financial report covers the 
consolidated group of Auswide Bank Ltd 
and controlled entities, (‘consolidated 
entity/economic entity’) and Auswide 
Bank Ltd as an individual parent entity 
(‘the company/chief entity’). Auswide 
Bank Ltd is a for-profit listed public 
company, incorporated and domiciled  
in Australia.

(a)  Principles of consolidation

The consolidated financial statements 
incorporate all of the assets, liabilities 
and results of the chief entity and all of 
the subsidiaries. Subsidiaries are entities 
the chief entity controls. The chief entity 
controls an entity when it is exposed to, 
or has rights to, variable returns from its 
involvement with the entity and has the 
ability to affect those returns through its 
power over the entity. The chief entity 
reassesses whether it has control of 
an investee if facts and circumstances 
indicate changes to the aforementioned 
elements have occurred. A list of the 
subsidiaries is provided in Note 11.

The assets, liabilities and results of 
the subsidiaries are fully consolidated 
into the financial statements of the 
consolidated entity from the date on 
which control is obtained. 

50  /  ANNUAL REPORT

The consolidation of a subsidiary is 
discontinued from the date that control 
ceases. Intercompany transactions, 
balances and unrealised gains or losses 
on transactions between group entities 
are fully eliminated on consolidation. 
Accounting policies of subsidiaries have 
been changed and adjustments made 
where necessary to ensure uniformity of 
the accounting policies adopted by the 
consolidated entity.

Equity interests in a subsidiary not 
attributable, directly or indirectly, to 
the consolidated entity are presented 
as ‘non-controlling interests’. The 
consolidated entity initially recognises 
non-controlling interests that are 
present ownership interests in 
subsidiaries and are entitled to a 
proportionate share of the subsidiary’s 
net assets on liquidation at either fair 
value or at the non-controlling interests’ 
proportionate share of the subsidiary’s 
net assets. Subsequent to initial 
recognition, non-controlling interests 
are attributed their share of profits 
or loss and each component of other 
comprehensive income. Non-controlling 
interests are shown separately within  
the equity section of the statement  
of financial position and statement  
of profit or loss and other 
comprehensive income.

(b)  Income tax

The economic entity adopts the liability 
method of tax-effect accounting 
whereby the income tax expense is 
based on the profit from ordinary 
activities adjusted for any non-
assessable or disallowed items.

Deferred tax is accounted for using 
the balance sheet liability method in 
respect of temporary differences arising 
between the tax bases of assets and 
liabilities and their carrying amounts in 
the financial statements. No deferred 
income tax will be recognised from the 
initial recognition of an asset or liability, 
excluding a business combination, 
where there is no effect on accounting 
or taxable profit or loss.

Deferred tax is calculated at the tax 
rates that are expected to apply to 
the period when the asset is realised 
or liability is settled. Deferred tax is 
credited to profit or loss except where 
it relates to items that may be credited 
directly to equity, in which case the 
deferred tax is adjusted directly  
against equity.

Deferred income tax assets are 
recognised to the extent that it is 
probable that future taxable profits will 
be available against which deductible 
temporary differences can be utilised.

The amount of benefits brought to 
account or which may be realised in the 
future is based on the assumption that 
no adverse change will occur in income 
taxation legislation and the anticipation 
that the economic entity will derive 
sufficient future assessable income 
to enable the benefit to be realised 
and comply with the conditions of 
deductibility imposed by the law.

Current and deferred tax are recognised 
in profit or loss, except when they relate 
to items that are recognised in other 
comprehensive income or directly 
in equity, in which case the current 
and deferred tax are also recognised 
in other comprehensive income or 
directly in equity, respectively. Where 
current tax or deferred tax arises from 
the initial accounting for a business 
combination, the tax effect is included 
in the accounting for the business 
combination.

Tax consolidation legislation

The company and all its wholly-owned 
Australian resident entities are part 
of a tax-consolidated group under 
Australian taxation law as of the 
financial year ended 30 June 2008. 
Auswide Bank Ltd is the head entity 
in the tax consolidation group, and 
as a consequence recognises current 
and deferred tax amounts relating to 
transactions, events and balances of 
the wholly-owned Australian controlled 
entities in this group as if those 
transactions, events and balances  
were its own, in addition to the current 
and deferred tax amounts arising in 
relation to its own transactions, events 
and balances. The tax consolidated 
group has not entered into a tax  
sharing agreement.

(c)  Property, plant and 
equipment

Each class of property, plant and 
equipment is carried at cost or fair value 
less, where applicable, any accumulated 
depreciation and impairment losses.

Freehold land and buildings are shown 
at their fair value (being the amount 
for which an asset could be exchanged 
between knowledgeable willing parties 
in an arm’s length transaction), based on 
periodic, but at least triennial, valuations 
by external independent valuers, less 
subsequent depreciation for buildings.

Any accumulated depreciation at the 
date of revaluation is eliminated against 
the gross carrying amount of the asset 
and the net amount is restated to the 
re-valued amount of the asset.

Depreciation

The depreciable amount of all fixed 
assets including building and capitalised 
lease assets, but excluding freehold 
land, is depreciated on a straight line 
basis over their useful lives to the 
economic entity commencing from 
the time the asset is held ready for 
use. Leasehold improvements are 
depreciated over the shorter of either 
the unexpired period of the lease 
or the estimated useful lives of the 
improvements.

Plant and equipment are measured  
on the cost basis less depreciation  
and impairment losses.

The carrying amount of plant and 
equipment is reviewed annually by 
Directors to ensure it is not in excess 
of the recoverable amount from these 
assets. The recoverable amount is 
assessed on the basis of the expected 
net cash flows that will be received  
from the asset’s employment and 
subsequent disposal. The expected 
net cash flows have been discounted 
to their present values in determining 
recoverable amounts.

Subsequent costs are included in the 
asset’s carrying amount or recognised 
as a separate asset, as appropriate, only 
when it is probable that future economic 
benefits associated with the item will 
flow to the group and the cost of the 
item can be measured reliably. All other 
repairs and maintenance are charged to 
profit or loss during the financial period 
in which they are incurred.

Any revaluation increase arising 
on the revaluation of freehold land 
and buildings is recognised in 
other comprehensive income and 
accumulated within equity, except to 
the extent that it reverses a revaluation 
decrease for the same asset previously 
recognised in profit or loss, in which 
case the increase is credited to profit 
or loss to the extent of the decrease 
previously expensed. A decrease in 
the carrying amount arising on the 
revaluation of such land and buildings is 
recognised in profit or loss to the extent 
that it exceeds the balance, if any, held 
in the properties revaluation reserve 
relating to a previous revaluation of  
that asset.

The depreciation periods used for  
each class of depreciable assets are:

•  Buildings – 40 years

•  Plant and equipment – 4 to 6 years

•  Leasehold improvements – 4 to 
6 years or the term of the lease, 
whichever is the lesser

The assets’ residual values and useful 
lives are reviewed, and adjusted if 
appropriate, at each reporting date.

An asset’s carrying amount is  
written down immediately to its 
recoverable amount if the asset’s 
carrying amount is greater than its 
estimated recoverable amount.

An item of property, plant and 
equipment is derecognised upon 
disposal or when no future economic 
benefits are expected to arise from the 
continued use of the asset. Gains and 
losses on disposals are determined by 
comparing proceeds with the carrying 
amount. These gains and losses are 
included in profit or loss. When revalued 
assets are sold, amounts included in the 
revaluation reserve relating to that asset 
are transferred to retained earnings.

(d)  Leases 

Leases of fixed assets where 
substantially all the risks and benefits 
incidental to the ownership of the asset, 
but not the legal ownership, that are 
transferred to entities in the economic 
entity are classified as finance leases.

Finance leases are capitalised by 
recording an asset and a liability at 
the lower of the amounts equal to the 
fair value of the leased property or the 
present value of the minimum lease 
payments, including any guaranteed 
residual values. Lease payments are 
allocated between the reduction of 
the lease liability and the lease interest 
expense for the period.

Leased assets are depreciated on a 
straight-line basis over their estimated 
useful lives where it is likely that the 
economic entity will obtain ownership of 
the asset or over the term of the lease.

Lease payments for operating leases, 
where substantially all the risks and 
benefits remain with the lessor, are 
charged as expenses in the periods in 
which they are incurred.

Rental income from operating leases is 
recognised on a straight-line basis over 
the term of the relevant lease. Initial 
direct costs incurred in negotiating and 
arranging an operating lease are added 
to the carrying amount of the leased 
asset and recognised on a straight-line 
basis over the lease term.

(e)  Financial instruments

Financial assets and financial liabilities 
are recognised when a group entity 
becomes a party to the contractual 
provisions of the instrument.

Financial assets and financial liabilities 
are initially measured at fair value. 
Transaction costs that are directly 
attributable to the acquisition or issue 
of financial assets and financial liabilities 
(other than financial assets and financial 
liabilities at fair value through profit or 
loss) are added to or deducted from 
the fair value of the financial assets or 
financial liabilities, as appropriate, on 
initial recognition. Transaction costs 
directly attributable to the acquisition 
of financial assets or financial liabilities 
at fair value through profit or loss are 
recognised immediately in profit or  
loss. Subsequent to initial recognition 
these instruments are measured as  
set out below.

The group derecognises a financial 
asset when the contractual rights to 
the cash flows from the asset expire, 
or it transfers the rights to receive 
the contractual cash flows on the 
financial asset in a transaction in which 
substantially all the risks and rewards 
of ownership of the financial asset are 
transferred. Any interest in transferred 
financial assets that is created or 
retained by the group is recognised  
as a separate asset or liability.

The group derecognises a financial 
liability when its contractual obligations 
are discharged or cancelled or expire.

AUSWIDE BANK 

/  51 

NOTE 1 BASIS   
OF PREPARATION 
CONTINUED

(e)  Financial instruments 
continued

Financial assets at fair value 
through profit and loss

A financial asset is classified in this 
category if acquired principally for the 
purpose of selling in the short term or if 
so designated by management. Realised 
and unrealised gains and losses arising 
from changes in the fair value of these 
assets are included in profit or loss in 
the period in which they arise.

Loans and receivables

Loans and receivables are non-
derivative financial assets with fixed 
or determinable payments that are 
not quoted in an active market and 
are stated at amortised cost using the 
effective interest rate method, less any 
impairment losses.

Held-to-maturity investments

These investments have fixed maturities 
and it is the group’s intention to hold 
these investments to maturity. Any 
held-to-maturity investments held by the 
group are stated at amortised cost using 
the effective interest rate method, less 
any impairment losses.

Available-for-sale financial assets

Available-for-sale financial assets 
include any financial assets not included 
in the above categories. Available-for-
sale financial assets are reflected at 
fair value. Unrealised gains and losses 
arising from changes in fair value are 
taken directly to equity.

Financial liabilities

Non-derivative financial liabilities 
are recognised at amortised cost, 
comprising original debt less principal 
payments and amortisation.

52  /  ANNUAL REPORT

Impairment

At each reporting date, the group 
assess whether there is objective 
evidence that a financial instrument 
has been impaired. In the case of 
available-for-sale financial instruments, 
a prolonged decline in the value of the 
instrument is considered to determine 
whether an impairment has arisen. 
Impairment losses are recognised in the 
consolidated statement of profit or loss 
and other comprehensive income.

(f)  Share capital –  
Ordinary shares

Ordinary shares are classified as equity. 
Incremental costs directly attributable 
to the issue of ordinary shares and share 
options are recognised as a deduction 
from equity, net of any tax effects.

(g) Derivative financial 
instruments

The consolidated entity enters into 
derivative financial instruments, 
including interest rate swaps, to manage 
its exposure to interest rate risk.

Derivatives are initially recognised at fair 
value at the date the derivative contract 
is entered into and are subsequently 
remeasured to their fair value at the end 
of each reporting period. The resulting 
gain or loss is recognised in profit or 
loss immediately unless the derivative is 
designated and effective as a hedging 
instrument, in which event the timing of 
the recognition in profit or loss depends 
on the nature of the hedge relationship.

Hedge accounting

The consolidated entity designates 
hedging instruments as cash flow 
hedges.

At the inception of the hedge 
relationship, the entity documents 
the relationship between the hedging 
instrument and the hedged item, along 
with its risk management objectives 
and its strategy for undertaking various 
hedge transactions. Furthermore, at 
the inception of the hedge and on 
an ongoing basis, the consolidated 
entity documents whether the hedging 
instrument is highly effective in 
offsetting changes in cash flows of  
the hedged item attributable to the 
hedged risk.

The effective portion of changes 
in the fair value of derivatives that 
are designated and qualify as 
cash flow hedges is recognised in 
other comprehensive income and 
accumulated under the heading of cash 
flow hedging reserve. The gain or loss 
relating to the ineffective portion is 
recognised immediately in profit or loss, 
and is included in the ‘other gains and 
losses’ line item.

Amounts previously recognised in 
other comprehensive income and 
accumulated in equity are reclassified 
to profit or loss in the periods when 
the hedged item affects profit or loss, 
in the same line as the recognised 
hedged item. However, when the 
hedged forecast transaction that is 
hedged results in the recognition of a 
non-financial asset or a non-financial 
liability, the gains and losses previously 
recognised in other comprehensive 
income and accumulated in equity are 
transferred from equity and included  
in the initial measurement of the cost  
of the non-financial asset or  
nonfinancial liability.

Hedge accounting is discontinued 
when the consolidated entity revokes 
the hedging relationship, when the 
hedging instrument expires or is 
sold, terminated, or exercised, or 
when it no longer qualifies for hedge 
accounting. Any gain or loss recognised 
in other comprehensive income and 
accumulated in equity at that time 
remains in equity and is recognised 
when the forecast transaction is 
ultimately recognised in profit or loss. 
When a forecast transaction is no longer 
expected to occur, the gain or loss 
accumulated in equity is recognised 
immediately in profit or loss.

(h)  Fair value of assets  
and liabilities

The consolidated entity measures some 
of its assets and liabilities at fair value on 
either a recurring or non-recurring basis, 
depending on the requirements of the 
applicable Accounting Standard.

Fair value is the price the economic 
entity would receive to sell an asset or 
would have to pay to transfer a liability 
in an orderly (i.e. unforced) transaction 
between independent, knowledgeable 
and willing market participants at the 
measurement date.

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015As fair value is a market-based measure, 
the closest equivalent observable 
market pricing information is used to 
determine fair value. Adjustments to 
market values may be made having 
regard to characteristics of the specific 
asset or liability. The fair values of assets 
and liabilities that are not traded in an 
active market are determined using one 
or more valuation techniques. These 
valuation techniques maximise, to the 
extent possible, the use of observable 
market data.

To the extent possible, market 
information is extracted from either the 
principal market for the asset or liability 
(i.e. the market with greatest volume and 
level of activity for the asset or liability) 
or, in the absence of such a market, the 
most advantageous market available 
to the entity at the end of the reporting 
period (i.e. the market that maximises 
the receipts from the sale of the asset 
or minimises the payments made to 
transfer the liability, after taking into 
account transaction costs and  
transport costs).

For non-financial assets, the fair value 
measurement also takes into account 
a market participant’s ability to use the 
asset in its highest and best use or to 
sell it to another market participant that 
would use the asset in its highest and 
best use.

The fair value of liabilities and the 
entity’s own equity instruments 
(excluding those related to share-based 
payment arrangements) may be valued, 
where there is no observable market 
price in relation to the transfer of such 
financial instrument, by reference to 
observable market information where 
such instruments are held in assets. 
Where this information is not available, 
other valuation techniques are adopted 
and where significant, are detailed in 
the respective note to the financial 
statements.

(i)  Impairment of assets

At the end of each reporting period, 
the Board assesses whether there 
is any indication that an asset may 
be impaired. The assessment will 
include the consideration of external 
and internal sources of information, 
including dividends received from 
subsidiaries, associates or jointly 
controlled entities. If such an indication 
exists, an impairment test is carried 

out on the asset by comparing the 
recoverable amount of the asset, being 
the higher of the asset’s fair value less 
costs to sell and value in use, to the 
asset’s carrying amount. Any excess 
of the asset’s carrying amount over 
its recoverable amount is recognised 
immediately in profit or loss, unless 
the asset is carried at revalued amount 
in accordance with another standard 
(for example, in accordance with 
the revaluation model in AASB 116: 
Property, Plant and Equipment). Any 
impairment loss of a revalued asset is 
treated as a revaluation decrease in 
accordance with that other standard.

Where it is not possible to estimate  
the recoverable amount of an individual 
asset, the group estimates the 
recoverable amount of the  
cash-generating unit to which  
the asset belongs.

Impairment testing is performed 
annually for goodwill, intangible assets 
with indefinite lives and intangible assets 
not yet available for use.

(j)  Investments in associates

Investments in associate companies are 
recognised in the financial statements 
by applying the equity method of 
accounting where significant influence 
is exercised over an investee. Significant 
influence exists where the investor has 
the power to participate in the financial 
and operating policy decisions of the 
investees but does not have control or 
joint control over those policies.

The financial statements of the associate 
are used by the group to apply the 
equity method. The reporting dates 
of the associate and the group are 
identical and both use consistent 
accounting policies.

The investment in the associate is 
carried in the consolidated and chief 
entity statement of financial position at 
cost plus post-acquisition changes in 
the group’s share of net assets of the 
associate, less any impairment in value. 
The consolidated and chief entity profit 
or loss reflects the group’s share of the 
results of operations of the associate.

Where there has been a change 
recognised directly in the associate’s 
equity, the group recognises its share 
of any changes and disclose this, when 
applicable, in the consolidated and chief 
entity statement of changes in equity.

(k)  Goodwill

Goodwill acquired in a business 
combination is initially measured at 
its cost, being the excess of the cost 
of the business combination over the 
group’s interest in the net fair value of 
the identifiable assets, liabilities and 
contingent liabilities recognised at 
the date of the acquisition. Goodwill 
is subsequently measured at its cost 
less any accumulated impairment 
losses. For the purpose of impairment 
testing, goodwill is allocated to each 
of the group’s cash-generating units, 
or groups of cash-generating units, 
expected to benefit from the synergies 
of the business combination. Cash-
generating units or groups of cash-
generating units to which goodwill 
has been allocated are tested for 
impairment annually, or more  
frequently if events or changes in 
circumstances indicate that goodwill 
might be impaired.

(l)  Trade and other payables

Trade and other payables represent 
the liabilities for goods and services 
received by the entity that remain 
unpaid at the end of the reporting 
period. The balances are recognised 
as a liability with the amounts normally 
paid within 30 days of recognition of  
the liability.

(m) Employee benefits

Provision is made for the economic 
entity’s liability for employee benefits 
arising from services rendered by 
employees to balance date. Employee 
benefits that are expected to be settled 
within one year have been measured 
at the amounts expected to be paid 
when the liability is settled, plus related 
on-costs.

(n)  Provisions

Provisions are recognised when the 
group has a legal or constructive 
obligation, as a result of past events, for 
which it is probable that an outflow of 
economic benefits will result and that 
outflow can be reliably measured.

AUSWIDE BANK 

/  53 

NOTE 1 BASIS OF 
PREPARATION 
CONTINUED

(o)  Cash and cash equivalents

Cash and cash equivalents includes 
cash on hand, deposits held at call with 
banks and other short-term highly liquid 
investments with original maturities of 
three months or less.

Premium Revenue – Mortgage Risk 
Management Pty Ltd

Premiums have been brought to account 
as income from the date of attachment 
of risk. Direct Premiums comprise 
amounts charged to the policy holder, 
excluding stamp duties collected on 
behalf of the statutory authorities. The 
earned portion of premiums received 
and receivable is recognised as revenue.

(p)  Goods and Services Tax 
(GST)

(r)  Loans and advances – 
doubtful debts 

Revenues, expenses and assets are 
recognised net of the amount of GST, 
except where the amount of GST 
incurred is not recoverable from the 
Australian Taxation Office. In these 
circumstances, the GST is recognised 
as part of the cost of acquisition of 
the asset or as part of an item of the 
expense. Receivables and payables in 
the statement of financial position are 
shown inclusive of GST.

Cash flows are presented in the 
statement of cash flows on a gross 
basis, except for the GST component of 
investing and financing activities, which 
are disclosed as operating cash flows.

(q)  Revenue

Revenue is recognised to the extent that 
it is probable that the economic benefits 
will flow to the group and the revenue 
can be reliably measured.

Interest is recognised as it accrues 
(using the effective interest method, 
which is the rate that exactly discounts 
estimated future cash receipts through 
the expected life of the financial 
instrument) to the net carrying amount 
of the financial asset.

Dividend revenue is recognised when 
the shareholder’s right to receive the 
payment is established.

Fees and commissions are recognised 
as revenue or expenses on an accrual 
basis.

During the 2011/2012 financial year, 
insurance for a significant portion of 
loans was transferred from MRM to 
QBE. MRM will continue to insure the 
remaining portfolio not transferred, with 
new loans in excess of 80% LVR being 
insured with QBE going forward.

Loan impairments are recognised 
when objective evidence is available 
that a loss event has occurred and as 
a consequence it is not likely that all 
amounts owed will be received.

Specific provisions for doubtful debts 
are recognised for individual loans 
that are identified as impaired by 
undertaking an assessment of estimated 
future cashflows.

Collective provisions are determined 
by segmenting the portfolio into 
asset classes with similar credit risk 
characteristics. Each exposure within 
each segment is allocated a probability 
of default and a loss given default 
percentage to calculate an expected 
loss. Key elements determining the 
segmentation of an exposure include 
the product type, LVR, whether the 
exposure is covered by Lenders’ 
Mortgage Insurance and the  
arrears position.

Where loan terms have been 
renegotiated (e.g. loans provided 
hardship relief), impairment provisioning 
is determined on the basis of the arrears 
position as if the renegotiation had 
not taken place. Restructured loans 
are returned to performing status 
after meeting restructured terms for a 
minimum 6 month period.

(s)  Adoption of new and 
revised accounting standards

The consolidated entity has 
adopted all of the new, revised or 
amending Accounting Standards and 
Interpretations issued by the Australian 
Accounting Standards Board (‘AASB’) 
that are mandatory for the current 
reporting period.

Any new, revised or amending 
Accounting Standards or Interpretations 
that are not yet mandatory have not 
been early adopted.

The following new, revised or 
amending Accounting Standards and 
Interpretations were effective for the 
current reporting period.

i)   AASB 2012-3: Amendments to 
Australian Accounting Standards – 
Offsetting Financial Assets and  
Financial Liabilities
The amendments to AASB 132 clarify 
the requirements relating to the 
offset of financial assets and financial 
liabilities. Specifically, the amendments 
clarify the meaning of ‘currently has 
a legally enforceable right of set-off’ 
and ‘simultaneous realisation and 
settlement’.

The application of these amendments 
does not have any material impact on 
the disclosures in the consolidated 
financial statements.

ii)   AASB 2013-3 Amendments to 
AASB 136 – Recoverable Amount 
Disclosures for Non-Financial 
Assets
The amendments to AASB 136 
remove the requirement to disclose 
the recoverable amount of a cash-
generating unit (CGU) to which goodwill 
or other intangible assets with indefinite 
useful lives had been allocated when 
there has been no impairment or 
reversal of impairment of the related 
CGU. Furthermore, the amendments 
introduce additional disclosure 
requirements applicable to when the 
recoverable amount of an asset or a 
CGU is measured at fair value less costs 
of disposal. These new disclosures 
include the fair value hierarchy, key 
assumptions and valuation techniques 
used which are in line with the disclosure 
required by AASB 13 Fair Value 
Measurements.

54  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015The application of these amendments 
does not have any material impact on 
the disclosures in the consolidated 
financial statements.

iii)   AASB 2013-4 Amendments to 
Australian Accounting Standards 
– Novation of Derivatives and 
Continuation of Hedge Accounting
The amendments to AASB 139 
provide relief from the requirement to 
discontinue hedge accounting when 
a derivative designated as a hedging 
instrument is novated under certain 
circumstances. The amendments also 
clarify that any change to the fair 
value of the derivative designated as 
a hedging instrument arising from the 
novation should be included in the 
assessment and measurement of hedge 
effectiveness.

The application of these amendments 
does not have any material impact on 
the disclosures in the consolidated 
financial statements.

iv)   AASB 2013-5 Amendments to 
Australian Accounting Standards – 
Investment Entities
The amendments to AASB 10 define 
an investment entity and require 
a reporting entity that meets the 
definition of an investment entity not to 
consolidate its subsidiaries but instead 
to measure its subsidiaries at fair value 
through profit or loss in its consolidated 
and separate financial statements.

As neither the parent entity nor its 
subsidiaries meet the definition of an 
investment entity, the application of 
these amendments do not have any 
material impact on the disclosures in the 
consolidated financial statements.

v)   AASB 2014-1 Amendments to 
Australian Accounting Standards 
(Part A: Annual Improvements 
2010-2012 and 2011-2013 Cycles)
The Annual Improvements 2010-2012 
and 2011-2013 have made amendments 
to various AASBs. The application of 
these amendments does not have any 
material impact on the disclosures in the 
consolidated financial statements.

vi)   AASB 2014-1 Amendments to 
Australian Accounting Standards  
(Part B: Defined Benefit Plans: 
Employee Contributions 
Amendments to AASB 119)
The amendments to AASB 119 clarify 
how an entity should account for 
contributions made by employees or 
third parties to defined benefit plans, 
based on whether those contributions 
are dependent on the number of years 
of service provided by the employee.

The application of these amendments 
does not have any material impact on 
the disclosures in the consolidated 
financial statements.

vii)  Interpretation 21 Levies
Interpretation 21 addresses the issue 
as to when to recognise a liability to 
pay a levy imposed by a government. 
The Interpretation defines a levy, and 
specifies that the obligating event that 
gives rise to the liability is the activity 
that triggers the payment of the levy,  
as identified by legislation.

The application of these amendments 
does not have any material impact on 
the disclosures in the consolidated 
financial statements.

viii)  AASB 1031 Materiality, AASB 
2013-9 Amendments to Australian 
Accounting Standards – Conceptual 
Framework, Materiality and 
Financial Instruments  
(Part B: Materiality), AASB 2014-
1 Amendments to Australian 
Accounting Standards  
(Part C: Materiality)
The revised AASB 1031 is an interim 
standard that cross-references to other 
Standards and the ‘Framework for 
the Preparation and Presentation of 
Financial Statements’ (issued December 
2013) that contain guidance on 
materiality. The AASB is progressively 
removing references to AASB 1031 in all 
Standards and Interpretations. Once all 
of these references have been removed, 
AASB 1031 will be withdrawn. The 
adoption of AASB 1031, AASB 2013-9 
(Part B) and AASB 2014-1 (Part C) does 
not have any material impact on the 
disclosures or the amounts recognised 
in the consolidated financial statements.

The adoption of new Accounting 
Standards and Interpretations did not 
have any significant impact on the 
financial performance or position of the 
consolidated entity.

(t)  New standards and 
interpretations not yet adopted

Accounting Standards and 
Interpretations issued by the AASB that 
are not yet mandatorily applicable to 
the Group, together with an assessment 
of the potential impact of such 
pronouncements on the Group when 
adopted in future periods, are discussed 
below: 

(i)  AASB 9 Financial Instruments,  
and the relevant amending 
standards
(applicable for annual reporting periods 
commencing on or after 1 January 2018)

AASB (9) 2009 introduces new 
requirements for the classification 
and measurement of financial assets. 
AASB 9 was subsequently amended 
in December 2010 to include 
requirements for the classification and 
measurement of financial liabilities and 
for derecognition, and in December 
2013 to include the new requirements 
for general hedge accounting. Another 
revised version of AASB 9 was issued 
in December 2014 mainly to include a) 
impairment requirements for financial 
assets and b) limited amendments to 
the classification and measurement 
requirements by introducing a ‘fair value 
through other comprehensive income’ 
(FVTOCI) measurement category for 
certain simple debt instruments.

The consolidated entity has not yet 
determined the potential impact of  
this standard.

(ii)  AASB 15 Revenue from 
Contracts with Customers
(applicable for annual reporting periods 
commencing on or after 1 January 2017)

AASB 15 establishes a single 
comprehensive model for entities to  
use in accounting for revenue arising 
from contracts with customers.  
AASB 15 will supersede the current 
revenue recognition guidance  
including AASB 118 Revenue,  
AASB 111 Construction Contracts  
and the related interpretations  
when it becomes effective.

The core principle of AASB 15 is that 
an entity should recognise revenue to 
depict the transfer of promised goods or 
services to customers in an amount that 
reflects the consideration to which the 
entity expects to be entitled in exchange 
for those goods or services.

AUSWIDE BANK 

/  55 

Currently, the Group uses the straight-
line method for depreciation and 
amortisation for its property, plant 
and equipment, and intangible assets 
respectively. The Directors of the 
company believe that the straight-line 
method is the most appropriate method 
to reflect the consumption of economic 
benefits inherent in the respective 
assets and accordingly, the Directors 
of the Company do not anticipate that 
the application of these amendments 
to AASB 116 and AASB 138 will have 
a material impact on the Group’s 
consolidated financial statements.

(v)  AASB 2014-9 Amendments to 
Australian Accounting Standards – 
Equity Method in Separate Financial 
Statements
(applicable for annual reporting periods 
commencing on or after 1 January 2016)

The consolidated entity has not yet 
determined the potential impact of this 
standard.

(vi)  AASB 2014-10 Amendments to 
Australian Accounting Standards 
– Sale or Contribution of Assets 
between an Investor and its 
Associate or Joint Venture
(applicable for annual reporting periods 
commencing on or after 1 January 2016)

The consolidated entity has not yet 
determined the potential impact of this 
standard.

(vii) AASB 2015-1 Amendments to 
Australian Accounting Standards – 
Annual Improvements to Australian 
Accounting Standards 2012-2014 
Cycle
(applicable for annual reporting periods 
commencing on or after 1 January 2016)

The consolidated entity has not yet 
determined the potential impact of this 
standard.

(viii) AASB 2015-2 Amendments to 
Australian Accounting Standards – 
Disclosure Initiative: Amendments 
to AASB 101
(applicable for annual reporting periods 
commencing on or after 1 January 2016)

The consolidated entity has not yet 
determined the potential impact of this 
standard.

(ix)  AASB 2015-3 Amendments to 
Australian Accounting Standards 
arising from the Withdrawal of 
AASB 1031 Materiality
(applicable for annual reporting periods 
commencing on or after 1 July 2015)

The consolidated entity has not yet 
determined the potential impact of this 
standard.

(x)  AASB 2015-5 Amendments to 
Australian Accounting Standards 
– Investment entities: Applying the 
Consolidation Exception
(applicable for annual reporting periods 
commencing on or after 1 January 2016)

The consolidated entity has not yet 
determined the potential impact of this 
standard.

(xi)  AASB 2015-4 Amendments to 
Australian Accounting Standards – 
Financial Reporting Requirements 
forAustralian Groups with a  
Foreign Parent
(applicable for annual reporting periods 
commencing on or after 1 July 2015)

This standard is not applicable to  
the group.

(xii) AASB 2014-6 Amendments to 
Australian Accounting Standards – 
Agriculture: Bearer Plants
(applicable for annual reporting periods 
commencing on or after 1 January 2016)

This standard is not applicable to  
the group.

(u)  Comparative figures

When required by Accounting 
Standards, comparative figures  
have been adjusted to conform  
to changes in presentation for the 
current financial year.

(v)  Critical accounting 
estimates and judgements

The preparation of financial statements 
in conformity with AASBs requires 
management to make judgements, 
estimates and assumptions that affect 
the application of accounting policies 
and the reported amounts of assets, 
liabilities, income and expenses. Actual 
results may differ from these estimates.

NOTE 1 BASIS OF 
PREPARATION 
CONTINUED

(t)  New standards and 
interpretations not yet adopted 
continued
(ii)  AASB 15 Revenue from 
Contracts with Customers 
continued

The consolidated entity has not yet 
determined the potential impact of  
this standard.

(iii)  AASB 2014-3 Amendments to 
Australian Accounting Standards 
– Accounting for Acquisitions of 
Interest in Joint Operations
(applicable for annual reporting periods 
commencing on or after 1 January 2016)

The amendments to AASB 11 provide 
guidance on how to account for the 
acquisition of a joint operation that 
constitutes a business as defined 
in AASB 3 Business Combinations. 
Specifically, the amendments state 
that the relevant principles on 
accounting for business combinations 
in AASB 3 and other standards (eg. 
AASB 136 Impairment of Assets 
regarding impairment testing of a cash 
generation unit to which goodwill on 
acquisition of a joint operation has 
been allocated) should be applied. The 
same requirements should be applied 
to the formation of a joint operation 
if, and only if, an existing business is 
contributed to the joint operation by 
one of the parties that participate in the 
joint operation.

The consolidated entity has not yet 
determined the potential impact of this 
standard.

(iv)  AASB 2014-4 Amendments to 
Australian Accounting Standards – 
Clarification of Acceptable Methods 
of Depreciation and Amortisation
(applicable for annual reporting periods 
commencing on or after 1 January 2016)

The amendments to AASB 116 prohibit 
entities from using a revenue-based 
depreciation method for items of 
property, plant and equipment. The 
amendments to AASB 138 introduce 
a rebuttable presumption that 
revenue is not an appropriate basis for 
amortisation of an intangible asset.

56  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015Estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical experience and other 
factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to 
accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Details on critical estimates and judgements in respect of impairment of receivables, impairment of investments, impairment  
of goodwill, outstanding claims liability and assessment of credit risk are disclosed in Note 1r), Note 11, Note 15, Note 19 and 
Note 35, respectively.

NOTE 2 INTEREST REVENUE AND INTEREST EXPENSE
The following tables show the average balance for each of the major categories of interest bearing assets and liabilities, the 
amount of interest revenue or expense and the average interest rate. Month end averages are used as they are representative of 
the entity’s operations during the period.

Average  
balance 
$

Interest 
$

Average  
interest rate 
%

Interest revenue 2015

Deposits with other financial institutions

Investment securities

Loans and advances

Other

Borrowing costs 2015

Deposits from other financial institutions

Customer deposits and NCDs

Subordinated notes

Net interest revenue 2015

Interest revenue 2014

Deposits with other financial institutions

Investment securities

Loans and advances

Other

Borrowing costs 2014

Deposits from other financial institutions

Customer deposits and NCDs

Subordinated notes

Net interest revenue 2014

41,428,599

1,175,240

207,733,025

6,019,468

2,318,949,522

119,655,707

22,442,781

546,724

2,590,553,927

127,397,139

580,744,389

22,233,067

1,827,661,850

52,008,737

28,000,000

1,952,242

2,436,406,239

76,194,046

51,203,093

55,788,914

1,532,820

206,515,969

6,091,913

2,253,418,425

125,963,525

25,634,682

614,592

2,541,357,990

134,202,850

613,768,329

24,289,381

1,750,221,615

57,383,290

28,000,000

2,876,780

2,391,989,944

84,549,451

49,653,399

2.84

2.90

5.16

2.44

4.92

3.83

2.85

6.97

3.13

2.75

2.95

5.59

2.40

5.28

3.96

3.28

10.27

3.53

AUSWIDE BANK 

/  57 

NOTE 3 PROFIT BEFORE INCOME TAX
Profit before income tax includes the following revenues and expenses whose disclosure is relevant in explaining the financial 
performance of the consolidated group.

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Profit relating to mortgage insurance activities (also refer Note 1(q))

Premium revenue

239,090

488,220

–

–

Included in the profit before income tax are the following revenue items:

Other revenue

Dividends

Controlled entities

Other corporations

Fees and commissions

Revaluation of investment securities to fair value

Other income

–

221

–

217

–

221

750,000

217

8,184,854

7,813,686

8,184,854

7,813,686

110,500

1,272,048

408,750

1,527,463

9,806,713

10,238,336

–

1,362,394

9,547,469

–

1,131,549

9,695,452

The profit before income tax is arrived at after charging the following items:

Other expenses

Fees and commissions

8,692,582

8,608,000

8,692,582

8,608,000

Provisions for employee entitlements

318,385

343,752

318,385

343,752

General and administration expenses

9,163,567

8,554,347

8,926,851

8,155,508

Underwriting expenses

112,839

(837,484)

–

–

Superannuation contributions paid

1,449,779

1,362,126

1,449,779

1,362,126

18,287,373

16,668,615

17,937,818

17,107,260

58  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015NOTE 4 INCOME TAX
Major components of tax expense for the year are:

Current income tax

Deferred income tax

2015 
$

2014 
$

2015 
$

4,869,643

4,898,837

4,804,007

896,698

1,230,999

840,366

Income tax reported in profit or loss

5,766,341

6,129,836

5,644,373

2014 
$

4,366,108

1,099,639

5,465,747

Consolidated

Chief entity

The prima facie tax on profit before income tax differs from the income tax provided as follows:

Prima facie tax on profit before income tax at 30% 
(2014: 30%)

5,708,500

6,057,642

5,516,109

5,523,617

Tax effect of permanent differences

Depreciation of buildings

Franked dividends

Other items – net

Intra-group dividend (MRM)

Income tax expense attributable to  
profit from ordinary activities

NOTE 5 DIVIDENDS PAID

Dividends paid during the year

Interim for current year

Fully franked dividend on ordinary shares

56,188

(133)

1,786

–

55,641

–

16,553

–

56,188

(133)

72,209

55,641

–

111,489

–

(225,000)

5,766,341

6,129,836

5,644,373

5,465,747

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

5,151,525

4,711,018

5,151,525

4,711,018

Final for previous year

5,467,943

1,449,544

5,467,943

1,449,544

Fully franked dividend on ordinary shares

10,619,468

6,160,562

10,619,468

6,160,562

In accordance with Accounting Standards, dividends are only provided for as declared or paid. Subsequent to the reporting date, 
the Board declared a dividend of 16.0 cents per ordinary share ($5.927 million), for the six months to 30 June 2015, payable on  
2 October 2015.

The final dividend for the six months to 30 June 2014 ($5.468 million) was paid on 3 October 2014, and was disclosed in the 
2013/14 financial accounts in accordance with Accounting Standards.

The tax rate at which the dividends have been franked is 30% (2014: 30%).

AUSWIDE BANK 

/  59 

NOTE 5 DIVIDENDS PAID 
CONTINUED

The amount of franking credits available for the subsequent financial year are:

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Balance as at the end of the financial year

17,196,190

16,637,890

17,196,190

16,637,890

Credits that will arise from the payment of income 
tax payable per the financial statements

Debits that will arise from the payment of the 
proposed dividend

(256,206)

(149,714)

(256,206)

(149,714)

(2,539,931)

(2,343,404)

(2,539,931)

(2,343,404)

14,400,053

14,144,772

14,400,053

14,144,772

Dividends – cents per share

Dividend proposed

Fully franked dividend on ordinary shares

Interim dividend paid during the year

Fully franked dividend on ordinary shares

Final dividend paid for the previous year

Fully franked dividend on ordinary shares

16.0

14.0

15.0

15.0

13.0

4.0

16.0

14.0

15.0

15.0

13.0

4.0

NOTE 6 CASH AND CASH EQUIVALENTS

Cash at bank and in hand

Deposits on call

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

19,135,421

8,554,801

19,135,421

8,554,096

32,360,000

55,049,500

28,750,000

44,200,000

51,495,421

63,604,301

47,885,421

52,754,096

NOTE 7 DUE FROM OTHER FINANCIAL INSTITUTIONS

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Deposits with Special Service Providers (SSPs)

9,090,851

10,161,836

9,090,851

10,161,836

Subordinated loans

124,585

124,585

124,585

124,585

9,215,436

10,286,421

9,215,436

10,286,421

Maturity analysis

No maturity specified

9,215,436

10,286,421

9,215,436

10,286,421

9,215,436

10,286,421

9,215,436

10,286,421

NOTE 8 ACCRUED RECEIVABLES

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

3,924,865

3,536,251

3,924,865

1,775,864

223,078

1,708,008

6,418,236

5,923,807

11,662,495

1,775,864

250,420

5,951,149

2014 
$

3,536,251

1,708,008

6,346,874

11,591,133

Interest receivable

Securitisation receivables

Other

60  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015NOTE 9 FINANCIAL ASSETS

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Financial assets held to maturity

Certificates of deposit

190,934,302

172,145,269

190,934,302

172,145,269

Financial assets available for sale

RMBS investments

3,516,198

5,106,919

3,516,198

5,106,919

Financial assets at fair value through profit or loss 
designated on initial recognition

Investments in floating rate notes

3,110,462

5,491,297

–

–

Financial assets at amortised cost

Notes – Securitisation program & other

47,345,388

65,374,227

47,345,388

65,374,227

244,906,350

248,117,712

241,795,888

242,626,415

Maturity analysis

Up to 3 months

From 3 to 12 months

From 1 to 5 years

Later than 5 years

194,044,764

173,655,268

190,934,302

173,655,268

–

–

7,063,109

2,000,000

–

–

3,571,812

–

50,861,586

65,399,335

50,861,586

65,399,335

244,906,350

248,117,712

241,795,888

242,626,415

Cash held within securitised trusts at 30 June 2015 of $22,490,711 (2014: $20,192,160) is restricted for use only by the trusts.

NOTE 10 LOANS AND ADVANCES

Term loans

Loans to controlled entities

Continuing credit loans

Provision for impairment

Total loans

Provision for impairment

Specific provision

Opening balance

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

2,142,158,075

1,992,857,967

2,142,158,075

1,992,857,967

–

–

903,119

1,002,797

189,683,341

233,543,371

189,666,281

233,543,491

2,331,841,416

2,226,401,338

2,332,727,475

2,227,404,255

(1,719,170)

(2,426,452)

(1,719,170)

(2,426,452)

2,330,122,246

2,223,974,886

2,331,008,305

2,224,977,803

(2,426,452)

(2,175,797)

(2,426,452)

(2,175,797)

Bad and doubtful debts provided for during the year

707,282

(250,655)

707,282

(250,655)

Total provision for impairment

(1,719,170)

(2,426,452)

(1,719,170)

(2,426,452)

Charge to profit or loss for bad and doubtful debts 
comprises:

Specific provision

707,282

(250,655)

707,282

Bad debts recognised directly

(1,165,230)

(109,818)

(1,165,230)

(250,655)

(109,345)

(457,948)

(360,473)

(457,948)

(360,000)

Maturity analysis

Up to 3 months

From 3 to 12 months

From 1 to 5 years

Later than 5 years

2,672,835

1,895,272

2,154,321

1,475,789

2,672,835

1,895,272

2,154,321

1,475,789

27,190,942

25,570,522

27,190,942

25,570,522

2,298,363,197

2,194,774,254

2,299,249,256

2,195,777,171

2,330,122,246

2,223,974,886

2,331,008,305

2,224,977,803

AUSWIDE BANK 

/  61 

NOTE 10 LOANS AND ADVANCES CONTINUED

The Group has entered into securitisation transactions on residential mortgage loans that do not qualify for derecognition. The 
special purpose entity established for the securitisation is considered to be controlled in accordance with Australian Accounting 
Standards & Australian Accounting Interpretations. The economic entity is entitled to any residual income of the securitisation 
program after all payments due to investors and costs of the program have been met, to this extent the economic entity retains 
credit and liquidity risk.

The impact on the consolidated and chief entity is an increase in liabilities – securitised loans – of $603.658 million (30 June 2014 
– $634.130 million).

Concentration of risk

The loan portfolio of the company does not include any loan which represents 10% or more of capital. 

NOTE 11 OTHER INVESTMENTS

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Unlisted shares – at cost

394,658

336,504

394,658

336,384

Controlled entities – at Directors’ valuation

–

–

15,259,005

15,260,066

394,658

336,504

15,653,663

15,596,450

Investment in controlled entities comprises:

Name

Chief entity

Country of 
incorporation

Contribution to 
consolidated operating 
profit after income tax Investment carrying value

June 2015 
%

June 2014 
%

2015 
$

2014 
$

2015 
$

2014 
$

Auswide Bank Ltd

Australia

–

– 12,742,656

12,196,308

–

–

Australia

100.0

100.0

284,590

1,539,984 14,000,000 14,000,000

Controlled entities

Mortgage Risk  
Management Pty Ltd

Wide Bay Australia  
Mini Lease Pty Ltd

MPBS Insurance Pty Ltd

MPBS Holdings Pty Ltd

Australia

Australia

Australia

51.0

100.0

100.0

100.0

100.0

51.0

100.0

100.0

100.0

100.0

F.I. Software Solutions Pty Ltd Australia

Widcap Securities Pty Ltd

Australia

Auswide Performance  
Rights Pty Ltd

Australia

100.0

–

–

–

(348)

–

–

2

1,041

2

234,745

326,694

1,258,903

1,258,903

–

–

–

–

–

–

–

–

100

120

–

–

519,335

1,866,330 15,259,005 15,260,066

13,261,991 14,062,638 15,259,005 15,260,066

The carrying amounts of unlisted shares were reassessed by the Directors as at 30 June 2015 with the reassessments being based 
on whether there were internal or external indicators that the investment was impaired.

62  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015An application has been lodged with 
the prudential regulator, APRA, for the 
cancellation of the insurance licence 
for MRM. This will effectively transfer 
the risk on the insured loans and the 
associated provisions to the balance 
sheet of the chief entity.

Wide Bay Mini Lease Pty Ltd

The company controlled a 51% share 
in Wide Bay Australia Mini Lease Pty 
Ltd. This company provided leasing and 
rental finance for businesses to acquire 
plant and equipment. The Directors 
have resolved not to issue new leasing 
and rental contracts and to wind the 
business down as existing contracts 
are paid out. This company was 
deregistered on 17 June 2015.

MPBS Holdings Pty Ltd

MPBS Holdings Pty Ltd is a wholly 
owned subsidiary which holds the 
property at 73 Victoria Street, Mackay.

MPBS Insurance Pty Ltd

MPBS Insurance Pty Ltd is a wholly 
owned subsidiary which is no longer 
actively trading.

F.I. Software Solutions Pty Ltd

F.I. Software Solutions Pty Ltd was a 
wholly owned subsidiary. The company 
was deregistered on 17 June 2015.

Widcap Securities Pty Ltd

Widcap Securities Pty Ltd is a wholly 
owned subsidiary which acts as the 
manager and custodian for Auswide 
Bank’s public RMBS and Warehouse 
Securitisation programs.

Auswide Performance Rights Pty Ltd

Auswide Performance Rights Pty Ltd is 
the trustee company for the Auswide 
Performance Rights Plan, set up to 
assist in the retention and motivation 
of executives, senior managers and 
qualifying employees.

(b)  Investment accounted  
for using the equity method

On 29 July 2005, Auswide Bank Ltd 
acquired a 25% interest in Financial 
Technology Securities Pty Ltd.

Financial Technology has operated since 
1993 as financial planners; the company 
operates primarily in South East 
Queensland and New South Wales,  
with a large clientele developed over  
the years.

Financial Technology Securities Pty Ltd 
is not listed on any public exchange and 
therefore there is no published quotation 
price for the fair value of this investment. 
The reporting date of the associate is the 
same as Auswide Bank Ltd.

In the 2012/13 financial year, the 
Directors resolved that a provision 
for impairment for the investment be 
made as the recoverable amount was 
determined to be nil. The impairment 
was based on the view that there is 
significant uncertainty about dividend 
income to be derived. Therefore, it was 
determined that value-in-use was nil. As 
there is no discernable market for the 
investment, it was also determined that 
fair value less costs to sell was nil. As a 
result of this, small profits arising in past 
years have not been brought to account.

The carrying value of the investment, 
accounted for using the equity method, 
was reduced from $7.377m to nil.

In the current financial year, a carrying 
value of $50,873 was recognised 
as a result of the application of 
equity accounting given the recent 
developments which indicate a return  
to profitability. However, profitability  
is not at a level to indicate a reversal  
of the impairment.

The following table illustrates 
summarised information of the 
investment in Financial Technology 
Securities Pty Ltd:

(a)  Controlled entities
Mortgage Risk Management  
Pty Ltd (MRM)

MRM is a wholly owned subsidiary of 
Auswide Bank Ltd and is a registered 
lenders’ mortgage insurance provider. 
The company acts solely for the purpose 
of insuring the company’s residential 
mortgages and has received APRA 
approval.

The operations of MRM are subject to 
and under the supervision of APRA 
in respect of compliance and capital 
requirements.

MRM meets APRA’s acceptable LMI 
test and all residential mortgage loans 
insured with the company qualify for 
a concessional risk-weight for capital 
adequacy purposes.

During the 2011/12 financial year the 
insurance for a portfolio of loans was 
transferred from MRM to QBE at a cost 
of $6.1m which is being written off over 
5 years. MRM will continue to insure the 
remaining portfolio not transferred, with 
new loans in excess of 80% LVR being 
insured with QBE going forward.

The Directors, acting on advice from 
the reviewing actuary, significantly 
increased the provisions in MRM in the 
second half of 2012/13. The increase 
arose from a re-examination and revised 
modelling of the insured loan book.

The Directors resolved that the 
additional provisions and resulting 
losses in MRM were evidence of 
impairment of the investment in the 
entity. Impairment losses of $6.42m 
were recognised in the chief entity, in 
the year ended 30 June 2013, reducing 
the value of the investment from 
$20.42m to $14.00m.

The carrying value of the investment 
on the balance sheet of the chief entity 
has been derived by estimating the net 
present value of the future cash flows, 
and by evaluating the net assets of the 
controlled entity.

The recoverable amounts are considered 
by the Directors to be value-in-use, and 
it is the intention of the Board for the 
subsidiary to continue trading. There is 
unlikely to be a market for sale of the 
subsidiary.

AUSWIDE BANK 

/  63 

NOTE 11 OTHER INVESTMENTS CONTINUED

(b)  Investment accounted for using the equity method continued

Share of associate’s balance sheet:

Current assets

Non-current assets

Current liabilities

Non-current liabilities

Net assets

Share of associate’s revenue and profit:

Revenue

Profit before income tax

Income tax

Profit after income tax

30 June 2015 
$

30 June 2014 
$

198,980

318,857

–

136,298

(113,522)

(58,682)

163,074

–

864,336

(214,621)

(143,460)

825,112

30 June 2015 
$

30 June 2014 
$

1,456,046

2,092,104

54,341

(3,468)

50,873

52,473

(22,309)

30,164

We note that the above figures were based on the unaudited accounts of Financial Technology Securities Pty Ltd.

NOTE 12 PROPERTY, PLANT AND EQUIPMENT

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Freehold land and buildings

At independent valuation – June 2015

9,135,000

9,680,000

9,135,000

9,680,000

Provision for depreciation

(14,369)

(357,100)

(14,369)

(357,100)

Land and buildings 73 Victoria St Mackay

2,250,000

3,504,890

At independent valuation – June 2015 

Provision for depreciation

(3,236)

(122,500)

–

–

–

–

11,367,395

12,705,290

9,120,631

9,322,900

Movement in carrying amount

Carrying amount at beginning of year

12,705,290

12,940,200

9,322,900

9,501,450

Additions

Revaluation increment/(decrement) (net)

Disposals

Depreciation

–

4,890

(809,882)

(290,521)

(237,492)

–

–

(239,800)

–

266,292

(290,521)

(178,040)

–

–

–

(178,550)

Carrying amount at end of year

11,367,395

12,705,290

9,120,631

9,322,900

64  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015Plant and equipment

At cost

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

31,623,379

29,781,921

31,623,379

29,781,921

Provision for depreciation

(25,044,384)

(24,416,474)

(25,044,384)

(24,416,474)

6,578,995

5,365,447

6,578,995

5,365,447

Movement in carrying amount

Carrying amount at beginning of year

Additions

Disposals

Depreciation

5,365,447

2,927,981

4,017,405

2,672,391

5,365,447

2,927,981

4,017,405

2,672,391

(281,372)

(8,215)

(281,372)

(8,215)

(1,433,061)

(1,316,134)

(1,433,061)

(1,316,134)

Carrying amount at end of year

6,578,995

5,365,447

6,578,995

5,365,447

17,946,390

18,070,737

15,699,626

14,688,347

All land and buildings were revalued as at 3 June 2015 by certified practicing valuers Jim Webster and Richard Lysnar of Propell 
National Valuers QLD. The valuations were assessed to fair market values. The company’s policy is to engage external experts to 
comprehensively revalue freehold land and buildings every three years with an assessment performed by the Board of Directors  
in intervening years.

NOTE 13 INCOME TAX ASSETS

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Income tax receivable

256,206

149,714

256,206

149,714

Deferred income tax assets are attributable to:

Employee leave provisions

Other provisions

Property, plant & equipment

794,106

798,900

794,106

798,900

1,924,045

2,704,216

1,924,045

2,698,286

691,192

625,834

691,192

625,834

Unrealised losses on investments

1,919,599

2,009,074

1,886,449

1,886,449

MPBS project costs

Other project acquisition costs

Premium on loans purchased (First Mac)

Subordinated notes prepaid expenses

Share issue costs

Other items

–

95,601

144,569

25,924

–

308,381

57,726

78,459

147,005

14,216

32,449

222,751

–

95,601

144,569

25,924

–

140,880

57,726

78,459

147,005

14,216

32,449

88,394

5,903,417

6,690,630

5,702,766

6,427,718

In respect of each temporary difference the adjustment was charged to income, except for share issue costs which were credited 
to equity.

NOTE 14 OTHER ASSETS

Prepayments

Consolidated

Chief entity

2015 
$

8,802,512

8,802,512

2014 
$

9,244,871

9,244,871

2015 
$

8,563,542

8,563,542

2014 
$

8,929,300

8,929,300

AUSWIDE BANK 

/  65 

NOTE 15 GOODWILL 
Pursuant to a bidder’s statement lodged with the Australian Securities & Investments Commission on 15 November 2007, the 
company issued an off-market takeover offer for 100% of the ordinary shares in Mackay Permanent Building Society Ltd (MPBS).

On 11 January 2008 the company announced the fulfilment of conditions pertaining to the off-market takeover offer set out in the 
bidder’s statement and gave notice that the offer was unconditional effective 10 January 2008.

In accordance with APRA’s approval for the transfer of business the financial and accounting records of the entities were merged 
on 1 June 2008.

The financial accounting for this business combination was prepared in accordance with Australian Accounting Standards and as 
set out in note 1k), and recognises the acquisition date as 10 January 2008.

Goodwill

42,057,110

42,057,110

42,057,110

42,057,110

42,057,110

42,057,110

42,057,110

42,057,110

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Impairment testing 

The cash-generating unit selected for 
impairment testing of goodwill was the 
Auswide Bank Ltd chief entity, as it is 
impractical to identify a separate MPBS 
cash generating unit within the chief and 
consolidated entities.

The goodwill disclosed in the Statement 
of Financial Position at 30 June 2015 
was supported by the impairment 
testing and no impairment adjustment 
was required.

Impairment testing of goodwill was 
carried out by comparing the net 
present value of cash flows from the 
cash-generating unit to the carrying 
value of the cash generating unit. The 
cash flows were based on projections 
of future earnings before taxation, 
depreciation and amortisation, minus 
forecast capital expenditure.

The cash flows have been projected over 
a period of three years. The terminal 
value of the business beyond year three 
has been determined using a constant 
growth perpetuity.

The key assumptions used in carrying 
out the impairment testing were as 
follows:

The recoverable amount exceeds the 
carrying value of the cash-generating 
unit by $33.70m at 30 June 2015.

The trigger points at which the carrying 
value of cash-generating unit would 
exceed its recoverable amount, while 
holding all other variables constant, are 
as follows:

•  Terminal growth rate – 3.8%  

(2014: 1.8%);

•  Discount rate – 12.8%  
(2014: 10.7%); and

•  Average revenue growth rate –  

4.60% (2014: 3.0%).

•  The budgeted trading result for the 
financial year ending 30 June 2016 
represents the cash-generating 
potential of the chief entity based on 
the forecasts approved by the Board 
of Directors;

•  The estimated growth in the cash-

generating unit cash flows over years 
one to three (beyond 30 June 2016) 
was 5.0% (2014: 3.0%); (Such growth 
rate is considered to be reasonable 
by management and the Board of 
Directors given historical loan book 
growth and strategic long-term 
growth targets)

•  The terminal growth rate (beyond 

three years) was 5.0% (2014: 3.0%); 
and

•  The pre-tax discount rate used in 

the impairment testing was 11.50% 
(2014: 9.48%) which represents the 
Cost of Equity to the consolidated 
group at 30 June 2015.

66  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015NOTE 16 DEPOSITS AND SHORT TERM BORROWINGS

Call deposits

Term deposits

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

517,305,301

471,426,192

521,129,396

477,107,353

1,146,219,117

1,133,827,244

1,156,219,117

1,133,827,244

Negotiable certificates of deposit

188,547,277

138,558,996

188,547,277

138,558,996

1,852,071,695

1,743,812,432

1,865,895,790

1,749,493,593

Maturity analysis

On call

Up to 3 months

From 3 to 12 months

From 1 to 5 years

625,147,265

535,472,818

628,971,360

554,877,071

557,756,387

648,484,778

557,756,387

648,484,778

590,223,881

504,463,831

600,223,881

490,740,739

78,944,162

55,391,005

78,944,162

55,391,005

1,852,071,695

1,743,812,432

1,865,895,790

1,749,493,593

The company’s deposit portfolio does not include any deposit which represents 10% or more of total liabilities.

NOTE 17 PAYABLES AND OTHER LIABILITIES

Trade creditors

Accrued interest payable

Other creditors

Maturity analysis

Up to 3 months

From 3 to 12 months

From 1 to 5 years

Later than 5 years

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

3,609,892

2,276,927

3,606,888

2,276,927

15,150,781

13,599,140

15,150,781

13,599,140

5,820,353

5,233,438

5,096,949

4,147,181

24,581,026

21,109,505

23,854,618

20,023,248

17,375,867

14,621,984

16,649,459

13,535,727

2,367,229

2,488,602

2,367,229

2,488,602

4,837,697

3,998,919

4,837,697

3,998,919

233

–

233

–

24,581,026

21,109,505

23,854,618

20,023,248

NOTE 18 INCOME TAX LIABILITIES

Deferred income tax liabilities are attributable to:

Asset revaluation reserve

Prepayments

MPBS acquisition adjustments

Special reserve

Cash flow hedging reserve

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

1,672,116

208,139

55,317

67,624

(439,916)

1,958,045

1,501,900

1,464,977

164,658

73,755

71,390

208,139

55,317

67,624

–

(439,916)

164,658

73,755

71,390

–

1,563,280

2,267,848

1,393,064

1,774,780

In respect of each temporary difference the adjustment was charged to income, except for the revaluations of the RMBS 
investments which were charged to the ‘available for sale’ reserve in equity, and the revaluations of land and buildings which were 
charged to the asset revaluation reserve in equity.

AUSWIDE BANK 

/  67 

NOTE 19 PROVISIONS

Employee entitlements

Balance at beginning of year

Annual leave and long service leave provided for 
during the year

Annual leave and long service leave payments used 
during the year

Balance at end of year

Maturity analysis

Current provision

Non-current provision

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

2,663,000

2,565,000

2,663,000

2,565,000

425,207

370,764

425,207

370,764

(441,186)

(272,764)

(441,186)

(272,764)

2,647,021

2,663,000

2,647,021

2,663,000

2,227,680

419,341

1,570,813

1,092,187

2,227,680

419,341

1,570,813

1,092,187

2,647,021

2,663,000

2,647,021

2,663,000

Unearned direct premiums and outstanding claims

Balance at beginning of year

6,157,373

9,541,091

Transfers to/(from) the provision during the year

–

(3,140,000)

Payments from the provision during the year

(1,701,455)

4,455,918

(243,718)

6,157,373

–

–

–

–

–

–

–

–

Premium revenues are earned over 10 years in accordance with actuarial advice based on historical claim patterns. The unearned 
portion is recognised as unearned premium liability.

The outstanding claims liability is based on independent actuarial advice and estimates of claims incurred but not settled at 
balance date. The estimation is based on statistical analyses of historical experience.

Other provisions

Total provisions

57,039

76,880

57,039

76,880

7,159,978

8,897,253

2,704,060

2,739,880

NOTE 20 SUBORDINATED CAPITAL NOTES

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Inscribed debenture stock

28,000,000

28,000,000

28,000,000

28,000,000

Maturity analysis

Later than 5 years

28,000,000

28,000,000

28,000,000

28,000,000

68  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015NOTE 21 CONTRIBUTED EQUITY

Fully paid ordinary shares

All ordinary shares have equal voting, dividend and 
capital repayment rights.

2015 
Shares 
No.

2015 
Shares 
$

2014 
Shares 
No.

2014 
Shares 
$

Balance at beginning of year

36,452,951

163,550,831

36,238,600

162,377,262

Issued during the year

Staff share plan

Dividend reinvestment plan

Balance at end of year

84,155

419,092

503,548

2,666,738

36,550

177,801

185,309

988,260

37,040,654

166,636,661

36,452,951

163,550,831

Effective 1 July 1998, the Company Law Review Act abolished the concept of par value shares and the concept of authorised 
capital. Accordingly, the company does not have authorised capital or par value in respect of its issued shares.

(a)  Staff Share Plan

13 October 2014 – 84,155 ordinary shares were issued.

Shares issued pursuant to the company’s staff share plan were at a price of 90% of the weighted average price of the company’s 
shares traded on the Australian Securities Exchange for the 10 days prior to the issue of the invitation to subscribe for the shares.

The members of the company approved a staff share plan in 1992 enabling the staff to participate to a maximum of 10% of the 
shares of the company. The share plan is available to all employees under the terms and conditions as decided from time to time 
by the Directors, but in particular, limits the maximum loan to each participating employee to 40% of their gross annual income. 
The plan requires employees to provide a deposit of 10% with the balance able to be repaid over a period of 5 years at no interest.

The total number of shares issued to employees 
since the inception of the staff share plan

The total number of shares issued to employees 
during the financial year

The total market value at date of issue, 13 October 
2014 (3 April 2014)

The total amount paid or payable for the shares at 
that date

(b)  Dividend Reinvestment Plan (DRP)

Consolidated

Chief entity

2015 
Shares

2014 
Shares

2015 
Shares

2014 
Shares

2,684,433

2,600,278

2,684,433

2,600,278

84,155

36,550

84,155

36,550

$

$

$

$

430,874

215,645

430,874

215,645

419,092

185,309

419,092

185,309

The DRP was maintained by the Board of Directors during the 2014/15 financial year and suspended for the final dividend payable 
2 October 2015.

3 October 2014 – 259,502 ordinary shares were issued. 
27 March 2015 – 244,046 ordinary shares were issued.

Shares issued under the plan rank equally in every respect with existing fully paid permanent ordinary shares and participate in 
all cash dividends declared after the date of issue. The shares issued under the DRP on 3 October 2014 and 27 March 2015 were 
issued at a discount of 2.5% on the weighted sale price of the company’s shares sold during the five trading days immediately 
following the Record Date.

AUSWIDE BANK 

/  69 

 
 
NOTE 22 RESERVES 
Movements in reserves

Available for sale reserve

Balance at beginning of year

Increase/(decrease) due to revaluation of RMBS 
investments to mark-to-market

Deferred tax liability adjustment on revaluation of 
RMBS investments

Balance at end of year

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

166,578

185,566

166,578

185,566

(12,553)

(27,126)

(12,553)

(27,126)

3,766

157,791

8,138

166,578

3,766

157,791

8,138

166,578

The balance of this reserve represents the excess of the mark-to-market valuation over the original cost of the RMBS investments.

Asset revaluation reserve

Balance at beginning of year

3,418,279

3,418,279

3,418,279

3,418,279

Transfer from profit and loss appropriation

Increase/(decrease) due to revaluation increment on 
land and buildings

Deferred tax liability adjustment on revaluation 
increment on land and buildings

Decrease due to transfer to retained profits of 
revaluation of assets since sold

392,185

266,292

(79,887)

(100,251)

–

–

–

–

–

266,292

(79,887)

(100,251)

–

–

–

–

Balance at end of year

3,896,618

3,418,279

3,504,433

3,418,279

The balance of this reserve represents the excess of the independent valuation over the original cost of the land and buildings.

Cash flow hedge reserve

Balance at beginning of year

Gain/(loss) arising on changes in fair value of 
hedging instruments entered into for cash flow 
hedges

Interest rate swaps

Income tax related to gains/losses recognised in 
other comprehensive income

Balance at end of year

–

(1,466,387)

439,916

(1,026,471)

–

–

–

–

–

(1,466,387)

439,916

(1,026,471)

–

–

–

–

The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of 
hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the hedging 
instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or 
loss only when the hedged transaction affects the profit or loss, or is included as a basis adjustment to the non-financial hedged 
item, consistent with the relevant accounting policy.

There were no cumulative gains/losses arising on changes in fair value of hedging instruments reclassified from equity into profit 
or loss during the year.

70  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015Share based payments reserve

Increase in reserve on acquisition of shares

Issue of shares held by entity to employees

Balance at end of year

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

(353,544)

245,196

(108,348)

–

–

–

–

–

–

–

–

–

The share based payments reserve relates to shares available for long term incentive (LTI) based payments to employees.

Statutory reserve

Balance at end of year

2,676,071

2,676,071

2,676,071

2,676,071

This is a statutory reserve created on a distribution from the Queensland Building Society Fund.

General reserve

Balance at end of year

5,833,939

5,833,939

5,833,939

5,833,939

A special reserve was established upon the company issuing fixed share capital in 1992. The special reserve represented 
accumulated members’ profits at that date and was transferred to the general reserve over a period of 10 years being finalised in 
2001/2002.

Doubtful debts reserve

Balance at end of year

2,387,810

2,387,810

2,387,810

2,387,810

Under APRA Harmonised Standards the company was required to establish a general reserve for doubtful debts. The amount was 
0.5% of Risk Weighted Assets, and the Board resolved to retain this reserve.

Total reserves

13,817,409

14,482,677

13,533,572

14,482,677

NOTE 23 OUTSIDE EQUITY INTEREST
Reconciliation of outside equity interest in controlled entities:

Opening balance

Share of operating profit/(loss)

Deconsolidation of minority interest

Closing balance

Consolidated

2015 
$

2014 
$

(70,625)

(70,290)

–

70,625

(335)

–

–

(70,625)

AUSWIDE BANK 

/  71 

NOTE 24 CASH FLOW STATEMENT

Reconciliation of profit from ordinary activities after tax to the net cash flows from operations:

Profit after tax from continuing operations

13,261,991

14,062,638

12,742,656

12,946,308

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Depreciation and amortisation

1,670,552

1,555,934

Bad debts expense

(Profit)/loss on disposal of non-current assets

457,948

(265,557)

360,473

1,611,100

457,948

3,133

(265,557)

1,494,684

360,000

3,133

(Increase)/Decrease in Assets

Accrued interest on investments

(388,613)

140,103

(388,613)

140,103

Prepayments & other receivables

6,696,546

3,096,476

6,521,240

2,952,529

Deferred tax asset

Increase/(Decrease) in Liabilities

Creditors & accruals

Deferred tax payable

Income tax payable

Employee entitlement provisions

Other provisions

Reserves

787,213

(1,238,506)

724,952

(1,256,860)

9,937,325

(5,695,028)

10,372,514

(1,179,744)

(704,568)

(106,491)

(15,979)

(1,737,277)

755,980

165,359

(313,659)

343,752

–

–

(381,716)

(106,491)

(15,979)

(35,820)

363,795

165,359

(163,945)

343,752

–

–

Net cash flows from operating activities

30,349,070

12,480,675

31,600,029

15,805,319

Cash flows arising from the following activities are presented on a net basis:

•  Deposits to and withdrawals from customer deposit accounts.

•  Advances and repayments on loans, advances and other receivables.

•  Sales and purchases of investment securities.

• 

• 

Insurance and reinsurance premiums.

(Profit)/Loss on disposal of fixed assets.

NOTE 25 EXPENDITURE COMMITMENTS

Capital expenditure commitments 

Capital expenditure contracted for within one year

1,190,694

920,000

1,190,694

920,000

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

2,269,360

2,534,364

2,269,360

2,534,364

1,573,246

1,697,156

145,552

2,014,140

2,337,185

–

1,573,246

1,697,156

145,552

2,014,140

2,337,185

–

5,685,314

6,885,689

5,685,314

6,885,689

Lease expenditure commitments

Non-cancellable operating leases

Up to 1 year

From 1 to 2 years

From 2 to 5 years

Later than 5 years

72  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015NOTE 26 EMPLOYEE ENTITLEMENTS
The aggregate employment entitlement liability is comprised of:

Provisions

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

2,647,021

2,663,000

2,647,021

2,663,000

Notes

19

NOTE 27 CONTINGENT LIABILITIES AND CREDIT COMMITMENTS

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

Approved but undrawn loans

66,969,048

76,036,526

66,969,048

76,036,526

Approved but undrawn credit limits

92,350,042

92,740,504

92,350,042

92,740,504

Bank guarantees

364,316

258,469

364,316

258,469

159,683,406

169,035,499

159,683,406

169,035,499

NOTE 28 EARNINGS PER SHARE

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)

Consolidated

2015 
Cents

36.07

36.07

2014 
Cents

38.75

38.75

As shares held in the share based payments reserve would be antidilutive, they have been excluded from the calculation of diluted 
earnings per share.

Information relating to the calculation  
of the earnings per share is as follows:

Calculation of numerator

Basic

Diluted

2015 
$

2014 
$

2015 
$

2014 
$

Net profit attributable to shareholders

13,261,993

14,062,638

13,261,993

14,062,638

Less dividends paid on preference shares

–

–

–

–

Numerator

13,261,993

14,062,638

13,261,993

14,062,638

Weighted average number of shares

Ordinary shares

Potential ordinary shares

36,768,376

36,293,202

36,788,376

36,293,202

–

–

–

–

Total weighted average ordinary shares

36,768,376

36,293,202

36,788,376

36,293,202

AUSWIDE BANK 

/  73 

NOTE 29 KEY MANAGEMENT PERSONNEL DISCLOSURES

(a)  Details of key management personnel

The following were key management personnel for the entire reporting period unless otherwise stated.

(i)  Directors

JS Humphrey

Chairman – Non-Executive Director

MJ Barrett

PJ Sawyer

Managing Director

Director – Non-Executive (retired 17 March 2015)

B Dangerfield

Director – Non-Executive

GN Kenny

Director – Non-Executive

SC Birkensleigh

Director – Non-Executive (appointed 2 February 2015)

(ii)   Executives

WR Schafer

Chief Financial Officer, Company Secretary

CA Lonergan

Chief Risk Officer

SM Caville

Chief Information Officer

MS Rasmussen

Chief Operating Officer (appointed 29 January 2015 )  
previously General Manager Business Banking and Operations

CM Nevis

General Manager Third Party & Business Banking

AJ McArdle

General Manager Sales & Distribution

Each of the key management personnel, relatives of key management personnel and related business entities which hold share 
capital and/or deposits with the company do so on the same conditions as those applying to all other members of the company.

(b)  Key management personnel compensation

Remuneration for the year ended 30 June 2015

Short term benefits

Cash and salary fees

Cash bonus

Non-monetary

Post employment benefits

Superannuation

Retirement benefits

Termination benefits

Share based payments

Other long term benefits

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

2,075,144

37,500

–

1,946,162

125,000

–

2,075,144

37,500

–

1,946,162

125,000

–

158,295

141,844

158,295

141,844

–

–

37,500

39,642

–

–

–

28,035

–

–

37,500

39,642

–

–

–

28,035

2,348,081

2,241,041

2,348,081

2,241,041

Remuneration is calculated based on the period each employee was classified as key management personnel.

(c)  Other transactions with key management personnel

There were no other transactions in which key management personnel provided services to the company.

74  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015NOTE 30 REMUNERATION OF AUDITORS

Amounts received or due and receivable by the 
auditors of the chief entity, Deloitte Touche 
Tohmatsu, are as follows:

Audit and review of financial statements of the entity 
and any other entity in the economic entity

Other assurance services

Amounts received or due and receivable by the 
previous auditors of the chief entity, Bentleys 
Brisbane Partnership, are as follows:

Audit and review of financial statements of the entity 
and any other entity in the economic entity

Tax returns (including subsidiaries)

Other assurance services

Other services

Accrual adjustment

Amounts received or due and receivable by the 
auditors of Mortgage Risk Management Pty Ltd, 
KPMG, are as follows:

Audit and review of the financial statements of  
the entity

Other regulatory audit services (APRA Return)

KPMG related practices:

Other regulatory services

Total auditors’ remuneration

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

272,470

16,414

288,884

–

–

–

272,470

16,414

288,884

–

–

–

47,797

24,741

6,753

1,883

–

81,174

22,600

11,300

33,900

41,000

41,000

444,958

224,768

16,589

68,090

17,903

(5,726)

321,624

22,600

11,300

33,900

21,000

21,000

376,524

47,797

24,741

6,753

1,883

–

81,174

224,768

16,589

68,090

17,903

(5,726)

321,624

–

–

–

–

–

–

–

–

–

–

370,058

321,624

NOTE 31 EVENTS SUBSEQUENT TO BALANCE DATE
The financial statements were authorised for issue by the Directors on the date the Directors’ declaration was signed.

Mortgage Risk Management Pty Ltd (MRM)

The Board announced on 13 August 2015 the effective date of 30 September 2015 to wind up the captive lenders’ mortgage 
insurance subsidiary, MRM.

The credit risk and provisions will be transferred to the balance sheet of the chief entity.

The wind up will release up to $10m of tier 1 capital which is currently invested in MRM.

Land and buildings – Victoria Street, Mackay

A conditional contract for the sale of the property at Victoria Street, Mackay was entered into on 31st July 2015 in the amount  
of $2.35m.

AUSWIDE BANK 

/  75 

NOTE 32 
BUSINESS AND 
GEOGRAPHICAL 
SEGMENT 
INFORMATION
The company operates predominantly  
in one industry. The principal activities  
of the company are confined to the 
raising of funds and the provision of 
finance for housing, personal loans  
and business banking.

The company commenced funding 
personal loans in May 2013. The 
personal loans portfolio was immaterial 
at balance date and has not been 
reported as a segment.

Funding of business loans commenced 
in April 2014. The business loans 
portfolio was immaterial at balance  
date and has not been reported as  
a segment.

The company operates principally within 
the states of Queensland, New South 
Wales and Victoria.

NOTE 33 
CONCENTRATION 
OF ASSETS AND 
LIABILITIES AND OFF 
BALANCE SHEET 
ITEMS
The Directors are satisfied that there is 
no undue concentration of risk by way of 
geographical area, customer group or 
industry group.

(b)  Valuation techniques

The economic entity selects a valuation 
technique that is appropriate in the 
circumstances and for which sufficient 
data is available to measure fair 
value. The availability of sufficient and 
relevant data primarily depends on the 
specific characteristics of the asset or 
liability being measured. The valuation 
techniques selected by the economic 
entity are consistent with one or more of 
the following valuation approaches:

Market approach: valuation techniques 
that use prices and other relevant 
information generated by market 
transactions for identical or similar 
assets or liabilities.

Income approach: valuation techniques 
that convert estimated future cash flows 
or income and expenses into a single 
discounted present value.

Cost approach: valuation techniques 
that reflect the current replacement  
cost of an asset at its current  
service capacity.

Each valuation technique requires inputs 
that reflect the assumptions that buyers 
and sellers would use when pricing the 
asset or liability, including assumptions 
about risks. When selecting a valuation 
technique, the economic entity gives 
priority to those techniques that 
maximise the use of observable inputs 
and minimise the use of unobservable 
inputs. Inputs that are developed using 
market data (such as publicly available 
information on actual transactions) 
and that reflect the assumptions that 
buyers and sellers would generally 
use when pricing the asset or liability 
are considered observable, whereas 
inputs for which market data is not 
available and therefore are developed 
using the best information available 
about such assumptions are considered 
unobservable.

NOTE 34 
FAIR VALUE 
MEASUREMENTS
The economic entity measures and 
recognises the following assets and 
liabilities at fair value on a recurring 
basis after initial recognition:

•  Financial assets held for sale

•  Available-for-sale financial assets

•  Freehold land and buildings

• 

Investments in floating rate notes

The economic entity does not 
subsequently measure any liabilities at 
fair value on a non-recurring basis.

(a)  Fair value hierarchy

AASB 13: Fair Value Measurement 
requires the disclosure of fair value 
information by level of the fair value 
hierarchy, which categorises fair value 
measurements into one of three possible 
levels based on the lowest level that is 
significant to the measurement, and can 
be categorised as follows:

Level 1

Measurements based on quoted  
prices (unadjusted) in active markets  
for identical assets or liabilities that  
the entity can access at the 
measurement date.

Level 2

Measurements based on inputs other 
than quoted prices included in Level 
1 that are observable for the asset or 
liability, either directly or indirectly.

Level 3

Measurements based on unobservable 
inputs for the asset or liability.

The fair values of assets and liabilities 
that are not traded in an active market 
are determined using one or more 
valuation techniques. These valuation 
techniques maximise, to the extent 
possible, the use of observable market 
data. If all significant inputs required to 
measure fair value are observable, the 
asset or liability is included in Level 2.  
If one or more significant inputs are not 
based on observable market data, the 
asset or liability is included in Level 3.

76  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015The following tables provide the fair values of the economic entity’s assets and liabilities measured and recognised on a recurring 
basis after initial recognition and their categorisation within the fair value hierarchy:

Consolidated entity – at 30 June 2015

Financial assets

Financial assets held to maturity:

Level 1 
$

Level 2 
$

Level 3 
$

Total 
$

Certificates of deposit

190,934,302

–

Financial assets held at amortised cost:

Notes – securitisation program

Loans and advances

Financial assets at fair value through profit or loss:

Investment in floating rate notes

Financial assets available for sale:

RMBS investments

Total

Non-financial assets

Freehold land and buildings

Total

Financial liabilities

Financial liabilities held at amortised cost:

Deposits and short term borrowings

Securitised loans

Total

Chief entity – at 30 June 2015

Financial assets

Financial assets held to maturity:

Certificates of deposit

Financial assets held at amortised cost:

Notes – securitisation program

Loans and advances

Financial assets at fair value through profit or loss:

Shares in unlisted companies

Financial assets available for sale:

RMBS investments

Total

Non-financial assets

Freehold land and buildings

Total

Financial liabilities

Financial liabilities held at amortised cost:

Deposits and short term borrowings

Securitised loans

Total

–

–

–

–

–

–

–

–

–

–

190,934,302

47,345,388

47,345,388

–

2,339,227,326 2,339,227,326

3,110,462

3,516,198

–

–

3,110,462

3,516,198

190,934,302

53,972,048 2,339,227,326

2,584,133,676

–

–

–

–

–

–

–

11,367,395

11,367,395

11,367,395

11,367,395

–

1,845,882,158

1,845,882,158

605,569,536

–

605,569,536

605,569,536

1,845,882,158 2,451,451,694

Level 1 
$

Level 2 
$

Level 3 
$

Total 
$

190,934,302

–

–

–

190,934,302

47,345,388

47,345,388

–

2,339,227,326 2,339,227,326

–

15,653,663

15,653,663

3,516,198

–

3,516,198

190,934,302

50,861,586 2,354,880,989 2,596,676,877

–

–

–

–

–

–

–

9,120,631

9,120,631

9,120,631

9,120,631

–

1,872,122,826

1,872,122,826

605,569,536

–

605,569,536

605,569,536

1,872,122,826 2,477,692,362

AUSWIDE BANK 

/  77 

NOTE 34 FAIR VALUE MEASUREMENTS CONTINUED

(b)  Valuation techniques continued

Consolidated entity – at 30 June 2014

Financial assets

Financial assets held to maturity:

Certificates of deposit

Financial assets held at amortised cost:

Notes – securitisation program

Loans and advances

Financial assets at fair value through profit or loss:

Investment in floating rate notes

Financial assets available for sale:

RMBS investments

Total

Non-financial assets

Freehold land and buildings

Total

Financial liabilities

Financial liabilities held at amortised cost:

Deposits and short term borrowings

Securitised loans

Total

Chief entity – at 30 June 2014

Financial assets

Financial assets held to maturity:

Certificates of deposit

Financial assets held at amortised cost:

Notes – securitisation program

Loans and advances

Financial assets at fair value through profit or loss:

Shares in unlisted companies

Financial assets available for sale:

RMBS investments

Total

Non-financial assets

Freehold land and buildings

Total

Financial liabilities

Financial liabilities held at amortised cost:

Deposits and short term borrowings

Securitised loans

Total

78  /  ANNUAL REPORT

–

–

–

–

–

–

–

–

Level 1 
$

Level 2 
$

Level 3 
$

Total 
$

172,145,269

–

–

–

172,145,269

65,374,227

65,374,227

–

2,233,714,347

2,233,714,347

5,491,297

5,106,919

–

–

5,491,297

5,106,919

172,145,269

75,972,443

2,233,714,347

2,481,832,059

–

–

–

–

–

–

–

12,705,290

12,705,290

12,705,290

12,705,290

–

1,738,210,118

1,738,210,118

636,212,997

–

636,212,997

636,212,997

1,738,210,118

2,374,423,115

Level 1 
$

Level 2 
$

Level 3 
$

Total 
$

172,145,269

–

–

–

172,145,269

65,374,227

2,233,714,347

2,233,714,347

15,596,450

15,596,450

65,374,227

–

–

5,106,919

–

5,106,919

172,145,269

70,481,146

2,249,310,797

2,491,937,212

–

–

–

–

–

–

–

9,322,900

9,322,900

9,322,900

9,322,900

–

1,755,095,906

1,755,095,906

636,212,997

–

636,212,997

636,212,997

1,755,095,906

2,391,308,903

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015(c)  Valuation techniques and inputs used to measure Level 2 fair values

Fair value 
Consolidated

Description

$ Jun 15

$ Jun 14 Valuation technique(s)

Inputs used

Financial assets available for sale

RMBS investments

3,516,198

5,106,919 Mark to market value

Financial assets at fair value through  
profit or loss

Investment in floating rate notes

3,110,462

5,491,297 Mark to market value

Consideration, maturity 
and interest rates

Consideration, maturity 
and interest rates

6,626,660 10,598,216

There were no changes during the period in the valuation techniques used by the economic entity to determine Level 2 fair values.

(d)  Valuation techniques and inputs used to measure Level 3 fair values

Fair value

Description

$ Jun 15

$ Jun 14 Valuation technique(s)

Inputs used

Freehold land and buildings

11,367,395

12,705,290 Market approach using 

recent observable 
market data, income 
approach using 
discounted cash flow 
methodology

Shares in unlisted companies

15,653,663 15,596,450 Market approach using 

recent observable 
market data, income 
approach using 
discounted cash flow 
methodology

27,021,058 28,301,740

Rentals for the property, 
capitalisation rate, value 
of similar properties

Cost value, net present 
value of future cash flows 
(see note 11)

The fair value of freehold land and buildings is determined at least every three years based on valuations by an independent 
valuer. At the end of each intervening period, the Directors review the independent valuation and when appropriate, update the 
fair value measurement to reflect current market conditions.

(e)  Reconciliation of Level 3 fair value measurements

Opening balance

Total gains or losses:

– in profit or loss

– in other comprehensive income

Purchases

Disposals

Closing balance

Shares in unlisted companies

Freehold land and buildings

2015 
$

2014 
$

2015 
$

2014 
$

15,596,450

15,925,577

12,705,290

12,940,200

–

–

58,374

(1,161)

–

–

–

(329,127)

(528,013)

(809,882)

–

–

(239,800)

–

4,890

–

15,653,663

15,596,450

11,367,395

12,705,290

AUSWIDE BANK 

/  79 

The Australian Prudential Regulation 
Authority’s (APRA’s) Prudential Standard 
APS 110 Capital Adequacy aims to 
ensure the Authorised Deposit-taking 
Institutions (ADIs) maintain adequate 
capital, on both an individual and group 
basis, to act as a buffer against the risks 
associated with the group’s activities. 
APRA requires capital to be allocated 
against credit, market and operational 
risk, and the group has adopted the 
‘standard model’ approach to measure 
the capital adequacy ratio.

The Board of Directors takes 
responsibility to ensure the company 
and consolidated entity maintain a level 
and quality of capital commensurate 
with the type, amount and concentration 
of risks to which the company and 
consolidated group are exposed from 
their activities. The Board has regard to 
prospective changes in the risk profile 
and capital holdings.

The company’s management prepares 
a three year capital plan and monitors 
actual risk-based capital ratios on a 
monthly basis to ensure the capital 
ratio complies with Board’s targets. 
The Board’s target is for the capital 
adequacy ratio to be maintained above 
13%. During the 2015 and 2014 financial 
years the capital adequacy ratios of both 
the consolidated and chief entities were 
maintained above the target ratio.

The capital adequacy calculations at  
30 June 2015 and 30 June 2014 
have been prepared in accordance 
with the revised prudential standards 
incorporating the Basel III principles.

APRA Prudential Standards and 
Guidance Notes for ADIs provide 
guidelines for the calculation of capital 
and specific parameters relating to 
Tier 1, Common Equity Tier 1 and Total 
Capital. Tier 1 capital comprises the 
highest quality components of capital 
and includes ordinary share capital, 
general reserves and retained earnings 
less specific deductions. Tier 2 capital 
comprises other capital components 
including general reserve for credit losses 
and cumulative subordinated debt.

Consistent with Basel III, the approach 
to capital assessment provides for a 
quantitative measure of the capital 
adequacy and focuses on:

•  Credit risk arising from on-balance 

sheet and off-balance sheet 
exposures;

•  Market risk arising from trading 

activities;

•  Operational risk associated with 

banking activities;

•  Securitisation risks; and

•  The amount, form and quality of 

capital held to act as a buffer against 
these and other exposures.

NOTE 35 FINANCIAL 
INSTRUMENTS
Auswide Bank Ltd has exposure to the 
following risks from its use of financial 
instruments:

•  Capital risk

•  Market risk

•  Liquidity risk

•  Credit risk

(a)  Capital risk management

The Board and Management of Auswide 
Bank Ltd are responsible for instituting 
a risk management framework and 
processes to diminish such risks 
to prudent levels. The Board has 
established the following committees 
with responsibilities to develop and 
monitor risk management frameworks 
within their relevant areas: the Risk 
Committee; the Asset and Liability 
Management Committee and the  
Audit Committee.

The Risk Committee is responsible for 
constructing and reviewing Auswide 
Bank Ltd’s risk management policies 
and procedures and appraising the 
adequacy of the risk management 
framework. The Asset and Liability 
Management Committee is responsible 
for the analysis and management of 
interest rate risk. Conversely, the  
Audit Committee is responsible for 
providing an impartial review of  
internal and external audit and  
of Auswide Bank Ltd’s:

•  Statutory reporting;

•  Prudential Australian Prudential 
Regulation Authority reporting;

•  Other financial reporting; and

•  Compliance with laws and 

regulations.

80  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015Details of the capital adequacy ratio on a chief entity and consolidated basis are set out below:

Total risk weighted assets

Capital base

Risk-based capital ratio

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

1,033,792,787

1,063,422,672

1,031,499,262

1,060,944,227

156,652,308

151,960,540

154,647,013

149,543,312

15.15% 

14.29% 

14.99% 

14.10% 

(b)  Market risk management

(iv)  to review and analyse:

(c)  Liquidity risk management

The Board of Directors have 
approved an appropriate liquidity 
risk management framework for the 
management of the group’s short, 
medium and long-term funding and 
liquidity management requirements. 
The group manages liquidity risk by 
maintaining adequate reserves, credit 
facilities and reserve borrowing facilities, 
and daily monitoring and forecasting 
cash flows.

Liquidity is monitored by management 
and a projection of near future liquidity 
(30 days) is calculated daily. This 
information is used by management 
to manage expected liquidity 
requirements.

An additional reserve equivalent to 
a minimum of 8% of the company’s 
liability base assessed on a quarterly 
basis is set aside and isolated as 
additional liquidity available in a crisis 
situation via the RBA repurchase  
facility (Repo).

Market risk is the risk that changes in 
market prices, such as interest rates, 
will affect Auswide Bank Ltd’s income 
or the worth of its holdings of financial 
instruments. The Board’s objective is 
to manage market risk exposures while 
optimising the return on risk.

Interest rate risk
Interest rate risk is the potential for loss 
of earnings to Auswide Bank Ltd due to 
adverse movements in interest rates.

The Asset and Liability Management 
Committee (ALCO) is responsible for the 
analysis and management of interest 
rate risk inherent in the balance sheet 
through balance sheet and financial 
derivative alternatives. These risks are 
quantified in the Rate Sensitive Asset 
and Liability Gap Analysis Report (the 
‘Gap Analysis Report’). The ALCO’s 
function and role are:

(i) 

(ii) 

 to review and analyse the interest 
rate exposures (as set out in the 
‘Gap Analysis Report’) in the 
context of current wholesale 
interest rate settings;

 to compare the interest rate 
exposures set out in the Gap 
Analysis Report against the limits 
prescribed under Auswide Bank’s 
Interest Rate Risk Policy limits;

(iii) 

 to ascertain whether the risks 
manifested in the Gap Analysis 
Report are appropriate given the 
committee’s view on interest rates;

•  The maturity profile of cash flow 
as produced through the Gap 
Analysis Report;

•  The concentration in sources and 

application of funds;

•  The ability to borrow in various 

markets;

•  The potential sources of volatility 

in assets and liabilities;

•  The impact of market/

operational disruption on cash 
flow and on customers; and

•  The ability to undertake asset 

sales.

At the reporting date, if interest rates 
had been 2.0% higher or lower and all 
other variables were held constant, the 
group’s net profit would decrease by 
$10,060,065 or increase by $9,782,054 
(2014: decrease by $2,826,434 or 
increase by $2,826,434). This is mainly 
due to the company’s exposures to fixed 
and variable rate loans, and deposit and 
securitisation liabilities.

The sensitivity analysis was derived 
from the Gap Analysis Report which 
calculates risk associated with 
movements in interest rates through 
the input of parameters for all financial 
assets and liabilities. The parameters 
used were consistent with those 
adopted for the prior period.

AUSWIDE BANK 

/  81 

NOTE 35 FINANCIAL INSTRUMENTS CONTINUED

(c)  Liquidity risk management continued

The undrawn limits on the securitisation warehouses were as follows:

Securitisation trust

WB Trust No. 3

WB Trust No. 5

WB Trust No. 6

Total

Maturity analysis

2015 
$

2014 
$

–

50,596,703

81,553,957

–

30,605,288

40,544,808

112,159,245

91,141,511

Up to 1 year

112,159,245

91,141,511

The maturity analysis for the respective groups of financial assets and liabilities have been included in the notes to the financial 
statements.

(d)  Credit risk management

Under the direction of the Board of Directors, management has developed risk management policies and procedures to establish 
and monitor the credit risk of the company. The risk management procedures define the credit principles, lending policies and the 
decision making processes which control the credit risk of the company.

Credit risk is minimised by the availability and application of insurances including lenders’ mortgage insurance, title insurance, 
property insurance, mortgage protection insurance and consumer credit insurance. Credit risk in the loan portfolio is managed by 
protecting all loans in excess of 80% LVR with either one of the recognised mortgage insurers or through the company’s wholly 
owned subsidiary Mortgage Risk Management Pty Ltd, an approved lenders’ mortgage insurer, and by securing the loans by first 
mortgages of residential property.

The company has a diversified Branch Network consisting of 32 branches and agencies across Queensland, and a business centre 
in Toowong, Brisbane, which conducts the company’s Third Party and interstate business. All regional loan staff and panel valuers 
are locally based ensuring an in depth knowledge of the local economy and developments in the real estate market.

The Board of Directors and management receive reports on a monthly basis to monitor and supervise the past due loans in the 
portfolio and ensure credit procedures are adhered to on a timely and accurate basis.

The economic entity’s maximum exposure to credit risk at balance date in relation to each class of recognised financial asset 
is the carrying amount of those assets as indicated in the balance sheet. The maximum credit risk exposure does not take into 
account the value of any security held or the value of any mortgage or other insurance to cover the risk exposure.

82  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015The past due loans and advances for the group (excluding effects of hardship accounts) comprise:

30 days and less than 60 days

60 days and less than 90 days

90 days and less than 182 days

182 days and less than 273 days

273 days and less than 365 days

365 days and over

Consolidated

Chief entity

2015 
$

2014 
$

2015 
$

2014 
$

7,125,543

15,481,298

7,125,543

15,481,298

3,215,709

3,178,019

1,670,694

2,463,633

4,652,942

7,262,763

9,587,526

1,830,451

3,215,709

3,178,019

1,670,694

4,692,619

2,463,633

4,136,824

4,652,942

7,262,763

9,587,526

1,830,451

4,692,619

4,136,824

22,306,540

42,991,481

22,306,540

42,991,481

As at 30 June 2015 there were 13 loans totalling $3,903,233 (30 June 2014: 15 loans totalling $4,199,640) on which interest was 
not being accrued due to impairment.

Concentration of credit risk

The company minimises concentrations of credit risk in relation to loans receivable by undertaking transactions with a large 
number of customers principally within the states of Queensland, New South Wales and Victoria.

The concentration of the loans and advances throughout Australia are as follows:

Queensland

New South Wales

Victoria

South Australia

Western Australia

Tasmania

Northern Territory

Counterparty risk

2015 
%

83.8

8.0

5.9

0.9

1.2

0.1

0.1

2014 
%

86.8

6.2

5.6

0.7

0.6

0.1

-

100.0

100.0

As part of Auswide Bank Ltd’s investment policy individual counterparties need to have the appropriate investment grading 
and are monitored in respect of their credit rating. Further, limits are placed on the amount of funds which may be placed with 
institutions with certain credit ratings.

AUSWIDE BANK 

/  83 

NOTE 35 FINANCIAL INSTRUMENTS 
CONTINUED

(e)  Terms, conditions and accounting policies

The economic entity’s accounting policies, including the terms and conditions of each class of financial asset, financial liability and 
equity instrument, both recognised and unrecognised at the balance date, are as follows:

Recognised financial 
instruments

FINANCIAL ASSETS

Notes to 
accounts

Short term deposits

6,7

Accounting policies

Terms and conditions

Short term deposits are stated at 
amortised cost. Interest is recognised 
when earned.

Short term deposits have an effective 
interest rate of 2.53% (2014 – 2.89%)

Accrued receivables

Bills of exchange and 
promissory notes

Certificates of deposit

Notes

RMBS investments

Mortgage Risk Management 
Pty Ltd investments

8

9

9

9

9

9

Loans and advances

10

Amounts receivable are recorded at their 
recoverable amount.

Bills of exchange and promissory notes 
are stated at amortised cost.

Certificates of deposit are carried at 
amortised cost. Interest revenue is 
recognised when earned.

Notes are carried at amortised cost.

RMBS investments are recorded at  
fair value through the Available for  
Sale Reserve.

Investments held by Mortgage Risk 
Management Pty Ltd are recorded  
at fair value through profit or loss.

Loan interest is calculated on the  
closing daily outstanding balance and 
is charged in arrears to the customer’s 
account on a monthly basis. Loans  
and advances are recorded at  
amortised cost.

Bills of exchange and promissory notes 
have an effective interest rate of 0% (not 
applicable for 2015) (2014 – 2.81%)

Certificates of deposit have an effective 
interest rate of 3.01% (2014 – 2.92%)

These notes are an overcover required as 
part of the securitisation of loans. They 
have an effective interest rate of 3.13% 
(2014 – 4.32%)

New mortgage loans approved with an 
LVR in excess of 80% will be insured 
under an arrangement with QBE, and are 
secured by first mortgage over residential 
property. Personal loans are approved 
on both a secured and unsecured basis 
and are not insured. Loans made for the 
purchase of staff shares are secured by 
the shares themselves. Certain of the 
company’s loans have been securitised 
and continue to be managed by the 
company. Further details are disclosed  
in note 10. The securitisation notes have 
a maturity period of greater than  
30 years. The securitisation notes are 
eligible for repayment once the balance 
of the trust falls below 10% of the 
invested amount. Interest paid to the 
note holders is repriced on a monthly 
basis at a set margin above BBSW.

84  /  ANNUAL REPORT

NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS C0NTINUED30 JUNE 2015Recognised financial 
instruments

Notes to 
accounts

FINANCIAL LIABILITIES

Deposits

16

Payables and other liabilities

17

Dividends payable

5

Accounting policies

Terms and conditions

Deposits are recorded at the principal 
amount. Interest is brought to account  
on an accrual basis.

Details of maturity of the deposits are set 
out in note 16. Interest is calculated on 
the daily balance.

Liabilities are recognised for amounts 
to be paid in the future for goods and 
services received, whether or not billed  
to the economic entity.

Dividends payable are recognised when 
declared by the company.

Trade creditors are normally settled on 
30 day terms.

Details of the final dividend declared by 
the company for the financial year ended 
30 June 2015 are disclosed in note 5.

These notes are issued for an initial 
period of 5 years and thereafter can 
be redeemed on an annual basis until 
the final redemption date of 10 years. 
Interest is repriced quarterly at a set 
margin above BBSW.

Subordinated capital notes

20

The subordinated capital notes are 
inscribed debenture stock.

(f)  Derivatives

Each of the securitisation trusts has an Interest Rate Swap in place to hedge against fixed rate loans held in the trust.  
The mark-to-market values at the end of the year were as follows:

WB Trust No.3

WB Trust No.5

WB Trust No.6

WB Trust 2006-1

WB Trust 2008-1

WB Trust 2009-1

WB Trust 2010-1

WB Trust 2014-1

2015 
$

–

–

–

63,857

784,428

135,235

38,985

256,057

2014 
$

359,400

–

–

65,200

619,400

122,600

28,600

–

AUSWIDE BANK 

/  85 

–

–

–

–

5
6
5

.

1
2
5

.

9
2
3

.

6
8
2

.

d
e
t
h
g
e
W

i

e
g
a
r
e
v
a

e
v
i
t
c
e
ff
e

t
n
u
o
m
a
g
n
y
r
r
a
c

i

l

a
t
o
T

e
t
a
r

t
s
e
r
e
t
n

i

t
e
e
h
s
e
c
n
a
a
b
r
e
p

l

g
n
i
r
a
e
b
t
s
e
r
e
t
n

i

n
o
N

s
r
a
e
y
5
o
t

1
m
o
r
F

s
s
e

l

r
o
r
a
e
Y
1

e
t
a
r

t
s
e
r
e
t
n

i

g
n
i
t
a
o
F

l

:
n

i

g
n
i
r
u
t
a
m
e
t
a
r

t
s
e
r
e
t
n

i

d
e
x
F

i

:
s
w
o

l
l

o
f

s
a
e
r
a

,

e
t
a
d
e
c
n
a
a
b
e
h
t

l

t
a
d
e
s
i
n
g
o
c
e
r
n
u
d
n
a
d
e
s
i
n
g
o
c
e
r
h
t
o
b

,
s
e
i
t
i
l
i

b
a

i
l

l

i

a
c
n
a
n
fi
d
n
a
s
t
e
s
s
a

l

i

a
c
n
a
n
fi
f
o
s
e
t
a
r

t
s
e
r
e
t
n

i

e
v
i
t
c
e
ff
e
e
h
t
d
n
a
s
k
s
i
r
e
t
a
r

t
s
e
r
e
t
n

i

o
t
e
r
u
s
o
p
x
e
s
’
y
t
i
t
n
e
c
m
o
n
o
c
e
e

i

Th

k
s
i
r
e
t
a
r

t
s
e
r
e
t
n
I

)

g

(

I

D
E
U
N
T
N
O
C

S
T
N
E
M
U
R
T
S
N

I

I

I

L
A
C
N
A
N
F
5
3
E
T
O
N

I

I

D
E
U
N
T
N
0
C
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
D
E
T
A
D
L
O
S
N
O
C
E
H
T
O
T
S
E
T
O
N

I

I

5
1
0
2
E
N
U
J
0
3

86  /  ANNUAL REPORT

%

%

$

4
1
0
2

5
1
0
2

4
1
0
2

$

5
1
0
2

$

4
1
0
2

$

5
1
0
2

3
7
.
2

6
5
2

.

1
3
2

.

6
2
2

.

,

1
0
3
4
0
6
3
6

,

,

1
2
4
6
8
2
0
1

,

–

–

,

9
5
3
5
3
6
,
1
1

1
2
3

.

2
0
3

.

2
1
7
,
7
1
1
,
8
4
2

8
3
3
,
1
0
4
6
2
2
2

,

,

,

1
2
4
5
9
4
,
1
5

,

0
1
9
6
0
6
3

,

,

3
9
4
9
2
2
2

,

,

6
3
4
5
1
2
9

,

0
0
0
5
9

,

0
0
0
5
9

,

,

9
5
5
2
9
8
5

,

,

0
5
3
6
0
9
4
4
2

,

6
1
4
,
1
4
8
,
1
3
3
2

,

–

–

,

9
5
3
5
3
6
,
1
1

–

–

,

9
5
5
2
9
8
5

,

5
8
1
,
6
7
3

,

9
3
3
4
3
4

5
8
1
,
6
7
3

,

9
3
3
4
3
4

,

9
9
2
9
2
9
8

,

,

5
1
6
0
5
3
9
6
5
2

,

,

,

1
7
0
9
5
5
8

,

,

9
9
2
9
2
9
8

,

,

1
7
0
9
5
5
8

,

,

2
9
5
4
4
3
2
5
6
2

,

,

3
5
7
,
2
4
6
4
2

,

,

2
6
4
0
1
2
,
7
1

$

–

–

–

$

–

–

–

$

–

–

–

$

–

–

–

4
1
0
2

5
1
0
2

4
1
0
2

5
1
0
2

$

4
1
0
2

$

5
1
0
2

s
t
n
e
m
u
r
t
s
n

i

l

i

a
c
n
a
n
F

i

s
t
e
s
s
a

l

i

a
c
n
a
n
F

i

1
9
3
,
7
9
9
9
5

,

,

8
2
9
5
6
2
9
4

,

–

–

1
2
4
,
1
9
1
,
0
1

,

6
3
4
0
2
1
,
9

i

l

s
t
n
e
a
v
u
q
e
h
s
a
c
d
n
a
h
s
a
C

l

i

a
c
n
a
n
fi
r
e
h
t
o
m
o
r
f
e
u
D

s
n
o
i
t
u
t
i
t
s
n

i

i

l

s
e
b
a
v
e
c
e
r
d
e
u
r
c
c
A

,

3
6
3
3
7
6
0
5

,

9
3
1
,
5
6
9
,
7
2

8
8
1
,
2
5
2
,
7
7
1

,

0
0
5
0
5
4
4
9
1

,

0
6
1
,
2
9
1
,
0
2

1
1
7
,
0
9
4
2
2

,

s
t
e
s
s
a

l

i

a
c
n
a
n
F

i

–

–

–

–

–

–

–

–

–

–

–

–

2
4
2
,
7
3
1
,
2
9
2

9
5
7
,
0
6
2
0
5
3

,

,

7
3
3
6
2
3
5
0
2

,

,

5
3
3
2
7
2
8
1
2

,

,

1
2
2
3
0
0
0
3
7
,
1

,

,

2
2
3
8
0
3
3
6
7
,
1

,

s
e
c
n
a
v
d
a
d
n
a
s
n
a
o
L

s
t
n
e
m
t
s
e
v
n

i

r
e
h
t
O

s
t
e
s
s
a
r
e
h
t
O

,

5
0
6
0
1
8
2
4
3

,

,

8
9
8
5
2
2
8
7
3

,

,

5
2
5
8
7
5
2
8
3

,

,

5
3
8
2
2
7
,
2
1
4

3
9
1
,
4
8
3
0
2
8
,
1

,

,

7
9
3
5
8
1
,
4
4
8
,
1

s
t
e
s
s
a

l

i

a
c
n
a
n
fi

l

a
t
o
T

–

–

,

6
0
5
9
0
1
,
1
2

6
2
0
,
1
8
5
4
2

,

,

6
0
5
9
0
1
,
1
2

6
2
0
,
1
8
5
4
2

,

–

–

–

–

–

–

s
e
i
t
i
l
i

b
a

i
l

r
e
h
t
o
d
n
a
s
e
b
a
y
a
P

l

3
7
.
3

4
7
.
3

,

5
8
0
0
3
1
,
4
3
6

2
0
5
,
7
5
6
3
0
6

,

–

–

6
7
3
,
7
0
2
3
8

,

,

3
6
0
4
7
6
0
9

,

–

–

3
5
2
,
7
9
8
8

,

,

8
7
9
9
5
1
,
7

3
5
2
,
7
9
8
8

,

,

8
7
9
9
5
1
,
7

8
0
0
1

.

7
9
6

.

,

0
0
0
0
0
0
8
2

,

,

6
7
2
9
4
9
5
3
4
2

,

,

,

0
0
0
0
0
0
8
2

,

,

1
0
2
0
7
4
5
1
5
2

,

,

–

–

9
5
7
,
6
0
0
0
3

,

4
0
0
,
1
4
7
,
1
3

–

–

–

–

,

1
8
3
8
9
5
8
3
1

,

,

5
2
2
8
1
6
9
6
1

,

–

–

2
4
6
,
1
8
4
8
5

,

,

3
4
4
5
0
5
6
5

,

,

0
0
0
0
0
0
8
2

,

,

0
0
0
0
0
0
8
2

,

,

3
3
5
4
4
7
,
2
9
4

6
9
9
,
7
7
4
6
5
4

,

s
n
a
o

l

d
e
s
i
t
i
r
u
c
e
S

–

–

–

–

s
e
t
o
n

l

a
t
i
p
a
c
d
e
t
a
n
d
r
o
b
u
S

i

s
n
o
i
s
i
v
o
r
P

,

6
7
8
6
7
4
3
0
3
,
1

,

5
7
6
,
7
2
3
0
4
3
,
1

,

5
2
7
,
0
7
1
,
4
6
9

,

7
9
2
3
8
7
,
3
7
9

s
e
i
t
i
l
i

b
a

i
l

l

i

a
c
n
a
n
fi

l

a
t
o
T

,

2
3
4
2
1
8
3
4
7
,
1

,

5
9
6
,
1
7
0
2
5
8
,
1

,

–

–

5
0
0
,
1
9
3
5
5

,

2
6
1
,
4
4
9
8
7

,

,

4
3
2
5
9
9
6
1
2
,
1

,

,

2
3
2
2
2
8
5
5
2
,
1

,

2
9
1
,
6
2
4
,
1
7
4

,

1
0
3
5
0
3
,
7
1
5

m
r
e
t

t
r
o
h
s
d
n
a
s
t
i
s
o
p
e
D

i

s
g
n
w
o
r
r
o
b

s
e
i
t
i
l
i

b
a

i
l

l

i

a
c
n
a
n
F

i

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(h)  Net fair values

The aggregate net fair values of financial assets and financial liabilities, both recognised and unrecognised, at the balance date 
are as follows:

Financial assets

Cash and cash equivalents

Total carrying amount  
per balance sheet

2015 
$

2014 
$

Aggregate net fair value

2015 
$

2014 
$

51,495,421

63,604,301

51,495,421

63,604,301

Due from other financial institutions

9,215,436

10,286,421

9,215,436

10,286,421

Accrued receivables

Financial assets

Loans and advances

Other investments

Other assets

Total financial assets

Financial liabilities

5,892,559

11,635,359

5,892,559

11,635,359

244,906,350

248,117,712

246,199,874

249,410,962

2,331,841,416

2,226,401,338

2,339,227,326

2,233,714,347

434,339

376,185

434,339

376,185

8,559,071

8,929,299

8,559,071

8,929,299

2,652,344,592

2,569,350,615

2,661,024,026

2,577,956,874

Deposits and short term borrowings

1,852,071,695

1,743,812,432

1,845,882,158

1,738,210,118

Payables and other liabilities

24,581,026

21,109,506

24,581,026

21,109,506

Securitised loans

Provisions

Subordinated capital notes

Total financial liabilities

603,657,502

634,130,085

605,569,536

636,212,997

7,159,978

8,897,253

7,159,978

8,897,253

28,000,000

28,000,000

28,000,000

28,000,000

2,515,470,201

2,435,949,276

2,511,192,698

2,432,429,874

The following methods and assumptions 
are used to determine the net fair values 
of financial assets and liabilities:

Cash and cash equivalents

The carrying amount approximates 
fair value because these assets are 
receivable on demand or have a short 
term to maturity.

Due from other financial institutions

The fair values of amounts due from 
other financial institutions are estimated 
using discounted cash flow analysis, 
based on current lending rates for 
similar types of investments. The 
carrying amount approximates  
fair value.

Accrued receivables

The carrying amount approximates fair 
value as they are short term in nature.

Financial assets

For the financial instruments traded in 
organised financial markets, fair value 
is the current quoted market price 
adjusted for any realisation costs.

Loans and advances

Payables and other liabilities

The fair values of loans receivable are 
estimated using discounted cash flow 
analysis, based on current lending rates 
for similar types of loans.

Other investments

The carrying amount for other 
investments is considered to be the 
reasonable estimate of net fair value.

Other assets

The carrying amount for these prepaid 
fees and expenses is considered to be 
the reasonable estimate of net fair value.

This includes interest payable and 
trade payables for which the carrying 
amount is considered to be a reasonable 
estimate of net fair value. For the 
liabilities which are long term the fair 
value is estimated using discounted cash 
flow analysis, based on current rates for 
similar types of liability.

Securitised loans

The fair values of securitised loans are 
estimated using discounted cash flow 
analysis, based on current lending rates 
for similar types of loans.

Deposits and short term borrowings

Provisions

The fair values of deposits are estimated 
using discounted cash flow analysis, 
based on current lending rates for 
similar types of deposits.

Due to other financial institutions

The fair values of these liabilities are 
estimated using discounted cash flow 
analysis, based on current borrowing 
rates for similar types of borrowing 
arrangements.

The carrying amount approximates  
fair value.

Subordinated capital notes

The carrying amount approximates  
fair value.

AUSWIDE BANK 

/  87 

DIRECTORS’ DECLARATION
30 JUNE 2015

In the opinion of the Directors of Auswide Bank Ltd (‘the company’):

(a) 

 the financial statements and notes and the remuneration disclosures that are contained in the Remuneration Report are in 
accordance with the Corporations Act 2001, including:

(i) 

 giving a true and fair view of the financial position of the company and consolidated entity as at 30 June 2015 and  
of their performance as represented by the results of their operations and their cash flows for the year ended on that 
date; and

(ii) 

 complying with Australian Accounting Standards (including the Australia Accounting Interpretation) and the 
Corporations Regulations 2001; and

(b) 

 the financial report also complies with International Financial Reporting Standards as disclosed in note 1; 

(c) 

 there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and 
payable.

 The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Managing 
Director and Chief Financial Officer for the financial year ended 30 June 2015.

Signed in accordance with a resolution of the Directors.

JS Humphrey 
Director   

Brisbane 
28 August 2015

SC Birkensleigh 
Director

88  /  ANNUAL REPORT

 
 
 
 
 
 
 
 
INDEPENDENT AUDITOR’S REPORT

Deloitte Touche Tohmatsu 
ABN 74 490 121 060  

Riverside Centre 
Level 25 
123 Eagle Street 
Brisbane QLD 4000 
GPO Box 1463 
Brisbane QLD 4001 Australia 

Tel:  +61 7 3308 7000 
Fax:  +61 7 3308 7002 
www.deloitte.com.au 

Independent Auditor’s Report 
to the Members of Auswide Bank Ltd 

Report on the Financial Report  

We  have  audited  the  accompanying  financial  report  of  Auswide  Bank  Ltd  which  comprises  the 
consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or 
loss and other comprehensive income, the consolidated statement of cash flows and the consolidated 
statement  of  changes  in  equity  for  the  year  ended  on  that  date,  notes  comprising  a  summary  of 
significant accounting policies and other explanatory information, and the directors’ declaration of the 
consolidated  entity,  comprising  the  company  and  the  entities  it  controlled  at  the  year’s  end  or  from 
time to time during the financial year.   

Directors’ Responsibility for the Financial Report 

The  directors of the company are responsible for the  preparation  of the financial report  that  gives a 
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 
and for such internal  control  as the  directors determine  is  necessary to  enable  the  preparation  of the 
financial report that gives a true and fair view and is free from material misstatement, whether due to 
fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 
Presentation of Financial Statements, that the financial statements comply with International Financial 
Reporting Standards. 

Auditor’s Responsibility 

Our responsibility is to express an opinion on the financial report based on our audit. We conducted 
our audit in accordance with Australian Auditing Standards. Those standards require that we comply 
with  relevant  ethical  requirements  relating  to  audit  engagements  and  plan  and  perform  the  audit  to 
obtain reasonable assurance whether the financial report is free from material misstatement.   

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures 
in  the  financial  report.  The  procedures  selected  depend  on  the  auditor’s  judgement,  including  the 
assessment of the risks of material misstatement of the financial report, whether due to fraud or error. 
In  making  those  risk  assessments,  the  auditor  considers  internal  control,  relevant  to  the  company’s 
preparation of the financial report that gives a true and fair view, in order to design audit procedures 
that  are  appropriate  in  the  circumstances,  but  not  for  the  purpose  of  expressing  an  opinion  on  the 
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness 
of accounting policies used and the reasonableness of accounting estimates made by the directors, as 
well as evaluating the overall presentation of the financial report. 

AUSWIDE BANK 

/  89 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INDEPENDENT AUDITOR’S REPORT C0NTINUED

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 
our audit opinion. 

Auditor’s Independence Declaration 

In conducting  our audit, we  have complied  with the independence requirements  of the  Corporations 
Act  2001.  We  confirm  that  the  independence  declaration  required  by  the  Corporations  Act  2001, 
which has been given to the directors of Auswide Bank Ltd, would be in the same terms if given to the 
directors as at the time of this auditor’s report.  

Opinion 

In our opinion: 

(a)  the  financial  report  of  Auswide  Bank  Ltd  is  in  accordance  with  the  Corporations  Act  2001, 

including: 

(i)  giving a true and fair view of the company’s and consolidated entity’s financial position as at 

30 June 2015 and of their performance for the year ended on that date; and 

(ii)  complying with Australian Accounting Standards and the Corporations Regulations 2001; and 

(b)  the financial statements also comply with International Financial Reporting Standards as disclosed 

in Note 1. 

Report on the Remuneration Report  

We  have audited the Remuneration Report  included in pages 5 to 12  of the  directors’ report for the 
year  ended  30  June  2015.  The  directors  of  the  company  are  responsible  for  the  preparation  and 
presentation  of  the  Remuneration  Report  in  accordance  with  section  300A  of  the  Corporations  Act 
2001.  Our  responsibility  is  to  express  an  opinion  on  the  Remuneration  Report,  based  on  our  audit 
conducted in accordance with Australian Auditing Standards. 

Opinion 

In  our  opinion  the  Remuneration  Report  of  Auswide  Bank  Ltd  for  the  year  ended  30  June  2015, 
complies with section 300A of the Corporations Act 2001.  

DELOITTE TOUCHE TOHMATSU 

Jamie C.J. Gatt  
Partner 
Chartered Accountants 
Brisbane, Queensland 
28 August 2015 

90  /  ANNUAL REPORT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CORPORATE GOVERNANCE SUMMARY

Auswide Bank Ltd maintains corporate 
governance policies and practices which 
follow the recommendations outlined by 
the Australian Securities Exchange (ASX) 
and which comply with the Corporations 
Act 2001, the ASX Listing Rules and 
APRA Prudential Standard CPS 510 
Governance. 

The Board of Directors of Auswide 
Bank Ltd has adopted a Corporate 
Governance Statement which sets 
out the Company’s compliance with 
the Australian Securities Exchange 
(ASX) Corporate Governance Council’s 
Corporate Governance Principles and 
Recommendations. The Corporate 
Governance Statement is available 
under the Governance section of the 
Company’s website located at  
www.auswidebankltd.com.au

The Governance section also details 
other relevant corporate governance 
information, including the Board and 
Committee Charters, policies and 
codes of conduct. The following is a 
summary of Auswide Bank’s compliance 
with the principles outlined in ASX’s 
Corporate Governance Principles and 
Recommendations (3rd edition):

PRINCIPLE 1: 
LAY SOLID 
FOUNDATIONS FOR 
MANAGEMENT 
AND OVERSIGHT
The Board Charter, together with the 
Corporate Governance Statement, 
set out the roles and responsibilities 
of the Board and separate functions 
of management and delegated 
responsibilities. The Corporate 
Governance Statement also details 
checks undertaken and provision of 
material information to shareholders 
prior to recommendation and 
appointment of Directors.

In accordance with the regulatory 
standards, the Board has established a 
Group Board Remuneration Committee 
which carries out a performance 
evaluation of the Managing Director and 
review of the performance evaluations 
of other senior executives, which is 
provided to the Board following a report 
of discussions between the Chairman 
of the Committee and the Managing 
Director. A performance evaluation of 
the Board, the Board Committees and 
each individual Director’s contribution  

to the Board is performed annually  
as outlined in the Corporate  
Governance Statement.

Auswide Bank recognises that a gender 
balanced diverse and inclusive workforce 
with a wide array of perceptions 
resulting from such diversity, promotes 
innovation and a positive and successful 
business environment. Auswide Bank’s 
Diversity Policy is available in the 
Corporate Governance section of its 
website at www.auswidebankltd.com.
au. The measurable objectives and 
Auswide Bank’s progress in achieving 
them, are outlined in the Corporate 
Governance Statement.

Auswide Bank is in compliance with 
Principle 1 and full details are available 
in the Corporate Governance Statement, 
Board Charter, Remuneration 
Committee Charter, together with 
other policies and codes located in the 
Governance section at  
www.auswidebankltd.com.au.

PRINCIPLE 2: 
STRUCTURE THE 
BOARD TO ADD 
VALUE 
Auswide Bank’s Board Charter 
outlines the structure of the board 
and its composition, together with 
the Board Renewal policy. Details of 
Directors’ skills, knowledge, experience, 
independence and diversity are 
discussed in the Corporate Governance 
Statement and in the Directors’ 
Statutory Report of this Annual Report.

The Board does not have a separate 
formal Nomination Committee, with 
the full Board addressing such issues 
that would otherwise be considered 
by the Nomination Committee. These 
matters include Board succession 
issues and ensuring that the Board 
has the appropriate balance of skills, 
knowledge, experience, independence 
and diversity to enable it to discharge  
its duties and responsibilities effectively.

Auswide Bank is in compliance with 
Principle 2 and full details are available 
in the Corporate Governance Statement 
and Board Charter, together with other 
charters, policies and codes located in 
the Governance section at  
www.auswidebankltd.com.au. The 
Directors’ Statutory Report of this 
Annual Report also provides details 
relevant to this principle.

PRINCIPLE 3: ACT 
ETHICALLY AND 
RESPONSIBLY
Auswide Bank promotes and supports a 
culture of honest and ethical behaviour. 
The standards of behaviour expected 
of all Directors, management and 
employees are detailed in the bank’s 
Codes of Conduct.

Auswide Bank is in compliance with 
Principle 3 and full details are available 
in the following Codes of Conduct – 
‘Corporate Code of Conduct’ and  
‘Code of Conduct for Directors and  
Key Executives’ located in the 
Governance section at  
www.auswidebankltd.com.au.

PRINCIPLE 4: 
SAFEGUARD 
INTEGRITY IN 
CORPORATE 
REPORTING
The Audit Committee has a documented 
Charter, approved by the Board. The 
Audit Committee’s focus is on the issues 
relevant to verifying and safeguarding 
the integrity of Auswide Bank’s financial 
operations and reporting structure. 
The names and qualifications of the 
members of the Audit Committee, 
the number of meetings held and the 
number of meetings attended are set 
out in the Directors’ Statutory Report.

Declarations have been signed by the 
Managing Director and Chief Financial 
Officer before approval by the board of 
Auswide Bank’s financial statements for 
the financial period as detailed in the 
Corporate Governance Statement.

Auswide Bank is in compliance with 
Principle 4 and full details are outlined 
in the Board Audit Committee Charter, 
Corporate Governance Statement and 
‘Appointment of External Auditors and 
Rotation of the External Audit  
Partners’ statement located in  
the Governance section at  
www.auswidebankltd.com.au.  
The Directors’ Statutory Report of this 
Annual Report also provides details 
relevant to this principle.

AUSWIDE BANK 

/  91 

CORPORATE GOVERNANCE SUMMARY C0NTINUED

Auswide Bank is in compliance with 
Principle 8 and full details are  
outlined in the Board Remuneration 
Committee Charter and Corporate 
Governance Statement located  
in the Governance section at  
www.auswidebankltd.com.au.  
The Directors’ Statutory Report of this 
Annual Report also provides details 
relevant to this principle.

PRINCIPLE 5: 
MAKE TIMELY 
AND BALANCED 
DISCLOSURE
Auswide Bank is committed to the 
promotion of investor confidence by 
providing equal, timely, balanced and 
meaningful disclosure to the market. 
The Company’s Continuous Disclosure 
Policy outlines its processes for 
complying with its continuous disclosure 
obligations under the Listing Rules.

Auswide Bank is in compliance with 
Principle 5 and full details are outlined 
in the Continuous Disclosure Policy 
and Corporate Governance Statement 
located in the Governance section at 
www.auswidebankltd.com.au.

PRINCIPLE 6: 
RESPECT THE 
RIGHTS OF 
SECURITY HOLDERS
Auswide Bank believes it is important 
for its shareholders to make informed 
decisions about their investment in 
the company and aims to provide 
shareholders with access to quality 
information and encourage two-way 
communication.

Auswide Bank is in compliance with 
Principle 6 and full details are outlined  
in the Governance section at  
www.auswidebankltd.com.au, including 
the Corporate Governance Statement.

PRINCIPLE 7: 
RECOGNISE AND 
MANAGE RISK
The Risk Committee has a documented 
Charter, approved by the Board. The 
Risk Committee has the responsibility 
to set and oversee the risk profile and 
the risk management framework of the 
Company, and to ensure management 
have appropriate risk systems and 
practices to effectively operate within 
the Board approved risk profile. The 
Risk Committee reviews the Group’s 
Risk Management Framework at 
least annually to satisfy itself that the 
framework continues to be sound.

The names and qualifications of the 
members of the Risk Committee, the 
number of meetings held and the 
number of meetings attended are set 
out in the Directors’ Statutory Report.

Auswide Bank is in compliance with 
Principle 7 and full details are outlined 
in the Board Risk Committee Charter 
and Corporate Governance Statement 
located in the Governance section at 
www.auswidebankltd.com.au, together 
with the Charter for Corporate Social 
Responsibility located in the Social 
Responsibility section at  
www.auswidebankltd.com.au.  
The Directors’ Statutory Report of this 
Annual Report also provides details 
relevant to this principle. 

PRINCIPLE 8: 
REMUNERATE 
FAIRLY AND 
RESPONSIBLY
The Remuneration Committee has a 
documented Charter, approved by the 
Board. The Remuneration Committee’s 
primary function is to assist the Board 
in fulfilling its responsibilities to 
shareholders and regulators in relation 
to remuneration, by ensuring that 
Auswide Bank has clear remuneration 
policies and practices that fairly and 
responsibly reward individuals having 
regard to performance, the Group’s Risk 
Management Framework, the law and 
the highest standards of governance.

The names and qualifications of 
the members of the Remuneration 
Committee, the number of meetings 
held and the number of meetings 
attended are set out in the Directors’ 
Statutory Report. Further information 
in relation to the Company’s 
policies and practices regarding 
the remuneration of Non-Executive 
Directors, Executive Directors and other 
Senior Executives can be found in the 
Remuneration Report section of the 
Directors’ Statutory Report, together 
with employment contract details 
of the Managing Director and Key 
Management Personnel.

92  /  ANNUAL REPORT

SHAREHOLDER INFORMATION

REGISTERED OFFICE
The registered office and principal place 
of business of Auswide Bank Ltd is:

Level 5 
16-20 Barolin Street 
Bundaberg QLD 4670

Ph

Fax

07 4150 4000

07 4152 3566

2015 ANNUAL GENERAL MEETING
The 2015 Annual General Meeting is to be held on Wednesday 18 November  
2015 at 11.00am EST at Auswide Bank Ltd, Level 3, 16-20 Barolin Street,  
Bundaberg, Queensland.

VOTING RIGHTS OF SHAREHOLDERS

A shareholder is entitled to exercise one vote in respect of each fully paid ordinary 
permanent share held in accordance with the provisions of the Constitution. 

Email 

auswide@auswidebank.com.au

KEY DATES

Website www.auswidebank.com.au

Annual General Meeting

SECRETARY
The Secretary is Mr William (Bill)  
Ray Schafer.

AUDITOR
The principal auditors are:

Deloitte Touche Tohmatsu 
Riverside Centre 
Level 25 
123 Eagle Street 
Brisbane QLD 4000

Ph

Fax

07 3308 7000

07 3308 7001

Website www.deloitte.com.au

Full year results and final dividend 
announcement

Ex dividend date

Record date

Dividend payment

Half-year results and interim dividend 
announcement

Ex dividend date

Record date

 Participation in DRP  
(final date for receipt of application)

Dividend payment

18 November 2015

28 August 2015

9 September 2015

11 September 2015

2 October 2015

18 February 2015

4 March 2015

6 March 2015

9 March 2015

27 March 2015

SECURITIES INFORMATION

SHARE REGISTER

The register of holders of Permanent Ordinary shares is kept at the office of:

Computershare Investor Services  
Pty Limited 
117 Victoria Street,  
West End QLD 4101. 

Ph

Fax

1300 552 270

(07) 3237 2152

Online Contact www-au.computershare.com/Investor/Contact

Website

www.computershare.com.au

AUSWIDE BANK 

/  93 

SHAREHOLDER INFORMATION C0NTINUED

ISSUED SHARES

The Company’s securities listed on the Australian Securities Exchange (ASX) as at 16 September 2015 are:

CLASS OF SECURITY

Permanent Ordinary Shares

DISTRIBUTION OF SHAREHOLDINGS
Permanent Ordinary Shares 

16 September 2015

Range

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 – OVER

TOTAL NUMBER OF SHAREHOLDERS

TOP 20 SHAREHOLDERS
Permanent Ordinary Shares

16 September 2015 

Name

1.

2.

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

J P MORGAN NOMINEES AUSTRALIA LIMITED

3. NATIONAL NOMINEES LIMITED

4.

5.

6.

HANCOCK, RE & LP

HANCOCK, RE

CITICORP NOMINEES PTY LIMITED

7. MILTON CORPORATION LIMITED

8.

9.

SAWYER, K

SAWYER, PJ ATF THE PETER SAWYER FAMILY A/C

10. CHANTILLY ONE PTY LTD ATF RG SPRAKE & CO S/F A/C

11. COCKERILL, GD & DM ATF GRAHAM COCKERILL S/F A/C

12. OLSEN, N

13. HANCOCK, RE & LP ATF THE HANCOCK FAMILY A/C

14. HESTEARN PTY LTD

15. WEALTHCOACH PTY LTD ATF SUNRISE A/C

16. MERTAN PTY LTD

17. CRAN, D

18. DRENWOOD PTY LTD

19. KENNEDY, JW & GJ

20. LOHSE HOLDINGS PTY LTD ATF PETER LOHSE SUPER FUND A/C

ASX CODE

NUMBER

ABA

37,040,654

No. of Shareholders

1,300

1,922

608

508

53

4,391

%

3.03

2.44

2.24

2.20

1.83

1.79

1.17

1.17

1.10

1.09

1.04

0.89

0.86

0.83

0.77

0.75

0.71

0.70

0.66

0.64

No. of Shares

1,122,832

904,465

827,884

814,738

677,241

663,375

433,570

432,719

408,486

402,577

383,546

330,520

320,000

308,543

285,236

275,973

264,074

258,985

245,100

238,893

Top 20 Permanent Shareholders

9,598,757

25.91

94  /  ANNUAL REPORT

SUBSTANTIAL SHAREHOLDERS

The Company’s Register of Substantial Shareholders recorded the following substantial shareholders’ interests:

Permanent Ordinary Shares 

16 September 2015

Hancock, RE (associated entities & associates)

ON-MARKET BUYBACK

There is no on-market buy back.

DIVIDEND REINVESTMENT PLAN

No. of Shares

% of Total

2,174,188

5.87

The Board of Directors resolved to suspend the dividend reinvestment plan for the final dividend for the half year ended  
30 June 2015, due to the strength of the capital position.

SHAREHOLDER ONLINE INVESTOR CENTRE

We encourage shareholders to take advantage of the Computershare Investor Centre website available at  
www.computershare.com.au where you can register and: 

•  View your shareholding, dividend and transaction history online 

•  Update your registered address, TFN and dividend instructions 

•  Elect to receive eCommunications about your shareholding 

•  Retrieve copies of dividend payment statements.

Alternatively, please contact Computershare Investor Services Pty Limited directly on 1300 552 270.

ANNUAL REPORT MAILING

The Company’s Annual Report is available on-line at www.auswidebankltd.com.au under the Shareholders’ section.  
The default option for receiving Annual Reports is via this website. You have the choice of receiving an email when the Annual 
Report becomes available on-line or electing to receive a printed Annual Report by mail. To change your Annual Report elections 
on-line visit www.computershare.com.au/easyupdate/aba. If you do not have internet access call 1300 308 185 and follow the 
voice instructions.

AUSWIDE BANK 

/  95 

 
FINANCIAL GLOSSARY

For your reference, this glossary provides definitions for some of the terms used in financial reporting, particularly by financial 
institutions listed on the ASX.

Not all terms may have been used in the Annual Report and Financial Statements.

ADI

AGM

APRA

ASIC

Asset

An Authorised Deposit-taking Institution is a corporation authorised under the Banking Act 1959 and includes 
banks, building societies and credit unions regulated by APRA.

Annual General Meeting

Australian Prudential Regulation Authority

Australian Securities and Investments Commission

A resource which has economic value and can be converted to cash. Assets for an ADI include its loans because 
income is derived from the loan fees and interest payments generated. 

ASX 

Australian Securities Exchange Limited (ABN 98 008 624 691)

Bad Debt

The amount that is written off as a loss and classified as an expense, usually as a result of a poor-performing loan. 

Basel

The Basel Accords are the recommendations on banking laws and regulations issued by the Basel Committee on 
Banking Supervision, which has the purpose of improving the consistency of capital regulations internationally. 

Basis Point

One hundredth of one per cent or 0.01 percent. The term is used in money and securities markets to define 
differences in interest rates or yields.

Capital 
Adequacy Ratio

A ratio of an ADI’s capital to its risk, obtained by dividing total capital by risk-weighted assets. This ratio shows 
an ADI’s capacity to meet the payment terms of liabilities and other risks. 

Cost-to-income 
Ratio

Obtained by dividing operating cost by operating income, this ratio shows a company’s costs in relation to its 
income. A lower ratio can be an indication that a company is better at controlling its costs. 

Credit Rating 

An analysis of a company’s ability to repay debt or other obligations.

Dividend

A portion of a company’s profits that may be paid regularly by the company to its shareholders. 

Dividend 
Payout Ratio

The amount of dividends paid to shareholders relative to the amount of total net income of a company, 
represented as a percentage.

Dividend Yield

Computed by dividing the annual dividend by the share price.

DRP

A Dividend Reinvestment Plan allows shareholders to reinvest some or all of their dividends into additional shares.

Earnings  
per Share

Ex-Dividend 
Date

Liability 

Liquidity

Market 
Capitalisation

The amount of company earnings per each outstanding share of issued ordinary shares. 

The date used to determine a shareholder’s entitlement to a dividend.

A company’s debts or obligations that arise during the course of business operations. Liabilities for ADIs 
include interest-bearing deposits. 

For an ADI, liquidity is a measure of the ability of the ADI to fund growth and repay debts when they fall due, 
including the paying of depositors.

The total value of a company’s shares calculated by multiplying the shares outstanding by the price per share.

96  /  ANNUAL REPORT

NCD

A Negotiable Certificate of Deposit is a short term security typically issued by an ADI to a larger institutional 
investor in order to raise funds

Net Interest 
Income

The difference between the revenue that is generated from an ADI’s assets, and the expenses associated with 
paying out its liabilities. 

Net Interest 
Margin (NIM)

The difference between the interest income generated by an ADI and the amount of interest the ADI pays out 
to their depositors, divided by the amount of their interest-earning assets. 

Net Profit After 
Tax (NPAT)

Net Tangible 
Asset Backing 
per Share 

Non Interest 
Income 

Price-to-
Earnings Ratio 
(P/E Ratio)

Total revenue minus total expenses, with the tax that will need to be paid factored in.

An indication of a company’s net worth, calculated by dividing the underlying value of the company (total 
assets minus total liabilities) by the number of shares on issue. 

Income derived primarily from fees and commissions, rather than income from interest-earning assets. 

A measure of the price paid for a share relative to the annual income or profit earned by the company per share. 

Record Date

The date used to identify shares traded and registered up until Ex-Dividend Date.

Return on 
Average 
Ordinary Equity

A measurement of how well a company uses the funds provided by its shareholders, represented by a ratio of 
the company’s profit to shareholder’s equity. 

RMBS

Residential mortgage-backed securities are a type of bond backed by residential mortgages on residential, 
rather than commercial, real estate.

Securitisation

Refers to setting aside a group of income-generating assets, such as loans, into a pool against which securities 
are issued. Securitisation is performed by an ADI in order to raise new funds. 

SSP

Special Service Provider such as an authorised settlement clearing house.

Subordinated 
Capital Notes

Subordinated notes or subordinated debentures, are a type of capital represented by debt instruments. 
Subordinated notes have a claim against the borrowing institution that legally follows the claims of depositors. 
Subordinated notes or debentures come ahead of stockholders.

Tier 1 Capital

Describes the capital adequacy of an ADI. Tier 1 Capital is core capital and includes equity capital and 
disclosed reserves. 

Tier 2 Capital

Describes the capital adequacy of an ADI. Tier 2 Capital is secondary capital that includes items such as 
undisclosed reserves, general loss reserves, subordinated term debt and more. 

Underlying 
Cash NPAT

The actual reflection of a company’s profit. One-off items may be removed from the statutory profit for the 
company to arrive at this profit figure. 

AUSWIDE BANK 

/  97 

AUSWIDE BANK LTD

ABN 40 087 652 060

Australian Financial Services & 
Australian Credit Licence 239686

Head Office 
Auswide Bank 
16 – 20 Barolin Street 
PO Box 1063 
Bundaberg QLD 4670

T   07 4150 4000 
F   07 4152 3499 
E   auswide@auswidebank.com.au

1300 138 831
auswidebank.com.au (Retail Website)
auswidebankltd.com.au (Corporate Website)