PERTH, Australia–Australia is seeing several large mergers among mutual banks and credit unions.
Among them, P&N Bank and Bcu, which have agreed to a $6 billion merger that will create one of Australia’s biggest banking mutual, according to the West Australian.
The two institutions had announced in December 2018 plans to investigate a merger and then spent the past four months on due diligence. The merger remains conditional on the approval of members and regulators.
Perth-based P&N’s CEO Andrew Hadley told the West Australian the tie-up “as a significant opportunity to grow our organization (and) expand our presence”.
Under the memorandum of understanding, P&N and the credit union would continue to operate as separate brands. The merged group would create a new top-10 Australian banking mutual with $6 billion of assets and 150,000 members, according to the West Australian.
Bcu, which was founded by banana farmers in 1970, instigated the merger talks. Both it and P&N, which was founded as the Police & Nurses Credit Union, itself the result of mergers, believe they have to get bigger to better attract members and reinvest in technology in the face of competition from the big banks, the publication reported.
Merger in New South Wales
Separately, in New South Wales, Holiday Coast Credit Union is inviting members to attend informational forums about a merger with Armidale-based Regional Australia Bank. The credit union has 25,000 members. Regional Australia Bank is customer-owned, and has 60,000 members and 200 staff. The bank is pledging more than 5% of its profits will go back to grassroots community initiatives.
Similar to the proposed merger in western Australia, the proposal calls for the merged institutions to retain their brands and to operateRegional Australia Bank and Holiday Coast Credit Union brands in their respective locations.
Holiday Coast Credit Union CEO Neville Parsons says the merger is best for current members and their communities. The institutions said there would be no layoffs as a result.
Benefits for Members
"These Forums provide a presentation of the benefits of the merger for members and their communities as well as addressing what has been the most common question around transferring to a mutual bank," Holiday Coast Credit Union said in a statement.
"Regional Australia Bank is a customer-owned bank. It has been built upon mergers with other credit unions that have served the central to north western NSW with the initial core being New England Credit Union with its registered office remaining in Armidale,” the bank said.
Regional Australia Bank added that as a mutual, it is member-owned, and preserves in its Constitution the fundamental mutual value of one member, one vote.