Between the lines: Local boys sock it to the banks

"Hello! Huge, faceless, overseas-owned bank," answers the operator. She then proceeds to treat the client like a number and tie him up in knots until he hangs up in confusion.

This is not a comedy skit but a radio advertisement for the Southland Credit Union in Invercargill. The inference is obvious - here, right on the doorstep, is the very opposite of a huge, faceless, overseas-owned bank.

Likethe approximately 70 other credit unions throughout New Zealand, the Southland Credit Union has its roots in the region and, like the pub in Cheers, is the place that knows its 5500 members (not customers) by name. Indeed, the members own it.

In the regions lately, Cheers-style banking seems to work. "Membership has grown by 12 per cent in each of the last three years," reports Christchurch-born general manager Andrew Leys.

It was Leys who wrote the advertisement to capitalise on the credit union's natural advantages over the heavyweights of the industry.

But he practically had to force the local radio stations, who feared the wrath of the big banks, to run it.

That was about a year ago and Southland Credit Union has not looked back.

Every local branch shut down by an overseas-owned bank is grist to the credit union mill which thrives on its heartland, small-customer origins. Southland Credit Union, for example, was established in 1977 by employees of New Zealand Aluminium Smelters.

Australian domination of banking is one reason why the credit union movement is breaking out from the obscure corner of the financial services industry that it has long occupied.

After a years-long battle, the National Association of Credit Unions expects soon to win a banking licence for its members that would hook them into the clearing services.

Also on the way, say insiders, are ATM and eftpos services, and the launch of a credit card with a major brand.

TSB Bank, formerly Taranaki Savings Bank, has already proved there is mounting grassroots support for Kiwi-owned minnows among the financial whales.

As overseas institutions continue to mop up the local banks - Commonwealth Bank bought the last 25 per cent of ASB Bank in mid-August - the New Plymouth-based institution is nibbling at the big boys' territory as it heads towards its 14th consecutive year of record profits.

"Three-quarters of our growth is now outside Taranaki," says chief executive Kevin Rimmington. 'We have to win business on our merits," he says, " but our New Zealand ownership does help."

The University of Auckland's customer survey shows that TSB Bank clients are fiercely loyal - indeed, nearly twice as loyal as those of the big banks.

This is why Rimmington insists that, despite approaches from some of the acquisition-hungry big boys, "TSB Bank is absolutely not for sale."

On the face of it, credit unions look very much like a ready-made, home-grown model for Jim Anderton's "Kiwi Bank."

That's certainly what the credit union thinks and it has talked to the Deputy Prime Minister about it.

But he appears wedded to a much more expensive, albeit higher-profile deal with New Zealand Post.