The theme of APRA Chair John Laker’s speech at the 2008 Abacus Convention today in Darwin was "do the basics well".

The following quote explains his theme:

"When I addressed this Convention two years ago, I identified the attributes of a strong mutual as strong governance, clear strategy and vision, a skilled management cadre, robust risk management and sound capital management based on sustainable profitability.

The global financial crisis has only reinforced the importance of these attributes. Our experience, in particular, is that strongly governed institutions have coped best with the more difficult operating environment. These are the institutions that have been quickest to identify the scale of emerging problems and adjust their strategic and funding plans, without needing to put the shutters up fully until the storm passed. These institutions have recognised that while sustained good times might have been forgiving of strategic mistakes or risk management weaknesses, the current environment is not.

Hence, my exhortation at the outset for mutuals to keep ‘Doing the Basics Well’.

Maintain your strict credit standards. Husband your retail deposits carefully.

Manage non-performing loans closely. Watch for red ink! Playing to your strengths in this way may not sound as exciting as exploring new territories but you will stand a much greater chance, when new territories do beckon in more settled times, of reaching them intact."