Important Announcement – Special Financial Support Measures & Interest Rate Changes
On behalf of the G&C Mutual Bank Board and all G&C staff, I would like to extend our warmest thoughts and support to all members as you and your families grapple with the direct and indirect consequences of the COVID-19 virus. I can also assure members that we are receiving the best medical advice and taking all necessary precautions to protect the health and well-being of our staff.
We recognise that “banking” is an essential service and are doing everything possible to ensure continuity of our normal services and to introduce special measures to assist those members facing particular financial hardship. With the assistance of our industry body, the Customer-Owned Banking Association (COBA), we have been consulting extensively with Federal and State Governments, the Reserve Bank and key regulatory authorities (including APRA and ASIC) in order to construct a comprehensive package of support measures to assist members during these challenging times. The support of the regulatory authorities has been critical in enabling us to introduce concessional loan repayment terms that would ordinarily not be permitted under applicable legislative and regulatory requirements.
All G&C Banking Services Remain Open
G&C has made a number of special product changes and enhancements to assist members (see details below) and has also initiated extensive contingency plans to ensure all our banking services and payment channels remain accessible to members. In particular, I can confirm that all of G&C’s online banking, loan application, payment transfer and phone banking channels are fully operative. Steps have also been taken to ensure those services will remain operative even if all of G&C staff are required to work remotely.
As at today, all G&C branches remain open with normal operating hours. As members would appreciate, the continued provision of in-branch services in each of our locations is being assessed on a daily basis and may change in the coming weeks. Any such changes to operating times will be advised on our website. We are also experiencing elevated call volumes to our contact centre and this is likely to intensify in the weeks ahead. Please rest assured that our staff are managing these additional call volumes as best they can. We would ask for your support and patience in the event you find it is taking longer than usual to have your calls answered.
Financial Support Measures
G&C has developed a comprehensive package of product changes and financial assistance measures as follows:
1. Existing Small Business Borrowers
In order to assist our existing small business borrowers to maintain the critical employment of others in the community, G&C has implemented the following measures:
(a) members with existing small business (L60) variable rate loans of up to $3 million will be given the option of having their normal repayments deferred (with any interest capitalised) for an initial 3 month period and with the potential for a further 3 month deferral upon a subsequent financial review by G&C; and
(b) the interest rate on all existing L60 variable rate loans of up to $3 million will be reduced by 0.75% with effect on 1 April 2020.
2. New Small Business Loans
G&C is exploring the potential of offering additional lending facilities to small businesses in accordance with the terms of the special “SME Guarantee Scheme” announced by the Federal Government on 21 March 2020. The eligibility terms and participation criteria for these new business facilities have not yet been finalised by the Government but we anticipate receiving further detail within the next 2 weeks.
3. Deferred Repayments on Home Loans
Although the vast majority of G&C’s home loan borrowers are substantially in advance on their loan repayments, for recent borrowers who have no advance payments, or for those who are otherwise facing financial hardship due to loss of their ordinary source of income, G&C will allow scheduled loan repayments to be deferred (with any interest capitalised and with the underlying loan term extended as required) for an initial 3 month period and with the potential for a further 3 month deferral upon a financial review by G&C. Borrowers who wish to access these special repayment deferral arrangements are asked to contact us to discuss their particular circumstances.
4. Concessional “Cash Flow” Personal Loan
To assist our non-home-owner members who may be facing temporary unemployment and struggling to cover rent and other living expenses, G&C’s Fair Rate Personal Loan will be made available on concessional terms during the next 6 months, with an interest rate set at 1.00% below the normal eligible “Fair Rate Loan Tier” for the borrower, and with no repayments required for the first 3 months from the date of funding.
Members who would like to take advantage of the special products and assistance measures set out in 1-4 above should contact us.
Changes to Loan and Savings Interest Rates
In addition to the interest rate changes noted above, G&C has made several other rate changes, as summarised below:
- Term Deposits
Notwithstanding last week’s reduction by the RBA of the official cash rate to a record low of 0.25%, G&C has resolved to increase our 12 month Term Deposit Rate by 0.70% to 1.70%. This new rate took effect on 20 March 2020 and is available for amounts of up to $2 million from retail depositors and self-managed superannuation funds. Details of all Term Deposit rates can be found on our Rates and Fees page.
- Fixed Rate Owner Occupied Home Loan
The interest rates for new fixed rate owner-occupied home loans have been reduced by between 0.20% and 0.70% with effect on 24 March 2020, with the new rate on our 1 year fixed rate product now at 2.29%. Details of all rates can be found on our Rates and Fees page.
- At-call Savings Accounts
The interest rates on several at-call accounts will be reduced with effect on 24 March 2020. Although it has been necessary to lower the rates on selected savings products in order to absorb costs associated with the other loan rate reductions and the increase in the 12 month term deposit rate, the new upper tier rate of 1.30% on our popular Pension Plus Savings Account remains higher than similar products available elsewhere in the market. The upper tier rate of 1.50% on G&C’s Inet Saver product also remains competitive compared to the rates offered by other banks on similar accounts. Details of all rates can be found on our Rates and Fees page.
As always our priority at G&C is to assist those members who are most in need. This requires us to carefully balance the varying needs of borrowers and savers, the elderly and the young, and both the employed and the unemployed. The package of measures we are announcing today (including decisions regarding interest rate changes on our suite of loan and deposit products) have been structured to assist those who are likely to be facing the most acute cash-flow pressures. Unless otherwise indicated above, there will be no immediate change to loan interest rates other than the rate reductions we announced previously on 10 March 2020 and which take effect on 1 April 2020.
I should also emphasise that G&C’s decision to substantially increase our 12 month Term Deposit rate (at a time when official rates are falling) was specifically made to assist our retired and semi-retired members at a time when income from other investment types is under downward pressure.
If you require any further information about the above financial assistance measures and interest rate changes, please refer to our website or contact us.
Chief Executive Officer
23 March 2020