The last 3 years have seen unprecedented disruption for the mutual banking industry in Australia to navigate, from the impacts of Covid in 2020 and 2021 to climate-weather events in 2022.  Challenges for customer-owned banking institutions continued into 2023 with softening economic conditions, high inflation levels contributing to further interest rate increases and the cost-of-living pressure continuing to have an impact on their customers.  

Economic uncertainty both globally and nationally continues to put financial pressure on local communities. Supporting these communities is a core purpose for the mutual banking sector as unlike investor-owned banks, the profit of customer-owned banks are not paid to shareholders but reinvested to meet their customers’ banking needs. 

Notwithstanding this, the mutual banking sector operates within the broader banking ecosystem which provides multiple challenges for a purposeful future.

Australian Mutuals financial results: key findings for 2023

Based on the 2023 financial results of 45 institutions in the mutual banking industry, KPMG has found:

▲ 27.0%

Operating profit before tax
increased by 27.0% to $769.3.m

(2022: $605.7m)

▲ 6.1%

Lending grew by 6.1% to $129.4b

(2022: $121.9b)

▲ 4.4%

Deposits grew by 4.4% to $131.1b

(2022: $125.6b)

▼ 17.0%

Non-interest income
decreased by 17.0% to $317.1m

(2022: $381.8m)

▲ 18bps

Net interest margin
increased 18bps to 2.00%

(2022: 1.82%)

▼ 749bps

Cost-to-income ratio decreased
by 749bps to 73.7%

(2022: 81.2%)

▲ 204bps

Average capital adequacy ratio
increased by 204bps to 18.25%

(2022: 16.21%)

▲ $23.6m

Increase of credit provisions
of $23.6m

(2022: write back of
credit provisions of $10.8m)

► 2

2 mergers completed

(2022: 2)

The KPMG Mutuals Insights Dashboard

The KPMG Mutuals Insights Dashboard which accompanies this report contains interactive charts and graphs that are underpinned by the publicly available financial data collected from mutual banks surveyed. This dashboard enables you to filter the data based on your own preferences and view the financial metrics for a particular year or segment of the mutual sector. You can also view metrics for an individual mutual in comparison to a peer group.

Key responses from KPMG’s 2023 Mutuals banking survey

Leaders within Australia’s mutual banks, building societies and credits unions were asked to share their views on risks, challenges, and opportunities within the community banking sector. 

73% of respondents feel confident about the 3 year growth prospects for Mutuals.


65% of respondents have not yet performed a gap analysis/are not planning on performing a gap analysis when it comes to sustainability

38% of respondents anticipate being involved in or considering merger activity during 2024.

63% of respondents believed community involvement is a key differentiator.

Top 3 opportunities for:


  • better product pricing
  • customer centricity and offering new/tailored products
  • better customer service.

Performance improvement

  • technology and transformation
  • collaborating with peers
  • efficiency.


  • personalised member service/experience
  • community involvement
  • knowing your target sector.

Top 3 challenges for the next 3 years


  • data integrity
  • innovation
  • cost reduction, productivity improvement and reskilling the workforce.


  • information technology including cyber risk
  • compliance & regulations
  • attracting and retaining talent.


  • maintaining profitable and sustainable growth
  • digital transformations
  • managing margin and interest rates.

Areas of focus for the Australian mutual sector

KPMG has identified 5 focus areas facing community banking in Australia which are explored in our report (PDF 2.7MB).

Opportunities for growth

The mutual banking industry faces sustainability challenges that threaten future viability. What action can be taken?

Managing the cyber threat

What critical considerations should mutual banks consider as they face evolving cyber threats and risks?

Closing the gap on sustainability reporting

Learn about upcoming reporting requirements for the mutual banking industry, including the implications of ISSB’s final standards.

Risks and opportunities with AI

Find out how mutual banks can manage the risk of AI for businesses and the impact on customer and community.

CPS230 operational risk management

Understand how CPS 230 implementation is an opportunity for mutuals to gain a competitive edge by addressing operational risks.

KPMG Mutuals Annual Review Webinar 2023

Mutuals Industry Review 2023

Insights into the performance and trends of Australia's Mutuals sector for 2023.

Contact KPMG’s mutual banking specialists

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Mutual banking industry insights


What is the mutual banking sector in Australia made up of?

The mutual banking industry in Australia is made up of Australia’s mutual banks, building societies and credit unions, and are collectively known as the Mutual sector. They are regulated by the Australian Prudential Regulation Authority (APRA).

What is included in the KPMG Mutuals Industry Review report for 2023?

KPMG’s review of the mutual banking sector examines financial performance and trends of Australia’s Mutual banks, building societies and credit unions.

Our report includes the financial results of 45 mutual banks for the 2023 Australian financial year, which represents over 98 percent of the mutual banking sector by total assets. The financial information, analysis and observations have been compiled from publicly available financial reports, APRA statistics and includes information from the prior year. In certain circumstances, data has been obtained directly from survey participants.

Included are the results of our qualitative survey. Mutual banks were asked to share their views on risks, challenges, and opportunities faced by customer-owned banks and how the community banking sector is responding to key issues.

What is KPMG’s interactive Mutuals dashboard?

KPMG’s Mutuals Insights Dashboard examines the performance and trends of Australia’s mutual banks, building societies and credit unions.

The dashboard contains interactive charts and graphs that are underpinned by publicly available financial data collected from the mutual banks surveyed. Users can filter financial data based on preferences and analyse or benchmark the data of the mutual industry participants for specific years or segments.

Who are Australia’s top 10 mutual banks?

The top 10 mutual banks by total assets in Australia for 2023 are:

  • Heritage and People’s Choice Bank
  • Newcastle Greater Mutual Group Ltd
  • Great Southern Bank
  • Teachers Mutual Bank
  • Bank Australia
  • Beyond Bank
  • P&N Bank
  • IMB Bank
  • Qudos Bank
  • Bank First.