The 2019–20 financial year has been dominated by environmental and economic crises that will have impacts for generations to come. Whilst they’ve had a profound impact across ecosystems and economies, our Aboriginal and Torres Strait Islander customers have once again demonstrated their resilience and ingenuity through these times.

The first of these crises was the catastrophic bushfire events that began to unfold across eastern Australia from October 2019, reaching a peak as the New Year broke, destroying lives, livelihoods, homes, businesses, communities, wildlife and bushland on a massive scale. As pictures of the resulting ecological wastelands were beamed across the globe, smoke from these fires lingered, reminding us all of the devastating reality of the disaster. IBA responded swiftly by establishing a Bushfire Crisis Fund and assisting our business finance and home loan customers directly impacted by the bushfires.

Soon after, as momentum recognising how knowledge held by Indigenous Australians could help manage and mitigate these catastrophic fire events grew, the COVID-19 pandemic rapidly escalated. In response, IBA worked hard to navigate the rapidly changing situation to ensure we could support our customers through the crisis, while maintaining continuity of business operations and safeguarding the wellbeing of IBA staff. We continued a coordinated approach to benefit our customers, while rapidly and successfully transitioning staff to remote working arrangements.

IBA offered our economically affected business finance customers deferrals of repayments and waivers of interest for an initial period of four months. We worked with the National Indigenous Australians Agency to develop the $50m Indigenous Business Relief Package. This was then announced by the Hon Ken Wyatt AM MP and deployed by IBA to support eligible Aboriginal and Torres Strait Islander businesses impacted by the COVID-19 pandemic, whether IBA customers or not. We also moved quickly (and before many mainstream lenders) to announce relief measures for IBA home loan customers; offering an interest rate reduction to reduce repayments, and hardship assistance to customers in need, including deferring repayments and other support.

Despite challenging market conditions, IBA achieved the majority of its key performance indicators for 2019-20, with limited exceptions, most of which were directly attributable to COVID-19.

IBA exceeded its targets for value of business finance approved, and importantly, survivability rates for our customers exceeded averages for comparable sized businesses in the wider market. IBA also met its targets under its funding agreement with the Commonwealth for the Business Development and Assistance program.

Whilst IBA’s level of home lending was comparable to its long-term average, it was below the target originally set for the year prior to COVID-19. The loan relief and assistance offered temporarily affected the level of income to IBA on the loan book. This, taken together with COVID-19 restrictions which impacted open house inspections and auctions, affected the level of home loans IBA was able to settle between March and June 2020.

However, IBA prudently managed its capital and financial exposures, ensuring that its balance sheet has remained robust despite the crisis. Pleasingly, portfolio income has also since held up at strong levels and demand for IBA’s home loans has remained at record levels throughout. IBA is actively exploring ways to meet growing demand for home loans into the future, including through (amongst other things), partnerships with the private sector to increase refinance options for more established IBA customers to move to a mainstream lender.

IBA also did not meet its targets for return on investment and level of Indigenous co-investment given COVID-19 affected investment returns across markets (as it did for investors across the globe), had substantial impacts on IBA’s tourism co-investments (as a result of border closures) and led to reduced investor appetite to make new investments.

Overall, for the past 30 years, we have remained committed to our mandate to support Aboriginal and Torres Strait Islander peoples, businesses, organisations and communities to pursue their aspirations for economic independence.

For the past three years we have charted a new strategic direction, launched a range of new products and solutions, and significantly increased lending and investment levels—all while maintaining strong results across our program areas. As a demonstration of this uplift in productivity, since 1 July 2016, IBA has deployed over $1 billion through our investment and lending activity which is around nine times the level of Government funding provided to IBA by way of capital during that period. These results indicate the increase in demand for IBA, even as we operate with about 15% fewer staff than we had in the recent past. They also reflect our investments in new ways of working, to meet customer needs. Along the way, we introduced regular customer feedback through digital surveys, with strong levels of satisfaction across programs.

IBA is largely reliant on returns from its own investment and loan portfolios to fund its work. While we work hard to make our capital go as far as possible, without additional investment from Government, or change to our legislation to enable us to borrow or raise capital, there will be limits to what we are able to do. However, I am confident that in the years to come we will continue to put customers first, and do our utmost to make our capital go as far as it can, and to be as impactful as possible.

This will be my final Annual Report as CEO of IBA. I announced my intention to step down in early 2020 to spend more time with my young family, and will be departing in December 2020. It’s been an incredibly fulfilling experience to work at IBA, both in my current and prior role at IBA. I’m proud of the numerous initiatives we’ve launched; including our investment funds, investments in new industries, a range of business financing products, and signature initiatives to support more women, youth and at risk men into business, and a significant growth in our home lending platform. Underpinning this, we refocused IBA around the pillars in our first five-year strategy, launched in 2018, developed a new, cutting edge impact framework to measure our outcomes, a prudent whole-of-organisation approach to capital management, and the Digital Futures Program to modernise our systems and infrastructure across all areas of work.

Along the way, I have been incredibly fortunate to work with so many incredible communities, business owners, entrepreneurs and families who are doing amazing things, sometimes against all the odds. I’m also proud to have been able to walk alongside and work with our dedicated team of staff, including the Executive, over many years, including many who have gone on to other walks of life over the years, and with whom I have been lucky to develop lasting relationships. They have helped make the role so enjoyable —and the way in which they rapidly transitioned to new working arrangements in response to the COVID-19 pandemic and continued to support our customers through these challenging times has been exemplary.

Lastly I would also like to express my deepest appreciation to IBA Chair Eddie Fry, Deputy Chair Anthony Ashby, and all current and past Board members, who have consistently demonstrated integrity, insight, humility and an unwavering commitment to delivering outcomes for those we serve, as well as showing incredible generosity to help me stay resilient throughout, not just professionally, but also personally. For this, I will always be grateful.

We remain at an inflexion point for Indigenous economic development, and IBA has a vital role to play in the years to come to support our customers to take control of and change their futures. I look forward to seeing the organisation continue to grow its reach and impact, and to find new ways of supporting the many inspiring communities, families and entrepreneurs we work with across Australia.

Rajiv Viswanathan
Chief Executive Officer, IBA