AUCKLAND, N.Z.–Five credit unions in New Zealand have announced plans to merge. If successful, the merged CU would be the largest in the country with more than $600 million in assets, approximately 75,000 member, and 300 employees. The operation would stretch across both of New Zealand’s main island.
The five credit unions are NZCU South, NZCU Central, NZCU Steelsands, Aotearoa Credit Union and NZCU Baywide. The boards of all the credit unions have recommended a transfer of engagements under the Friendly Societies and Credit Unions Act into one single credit union.
"The unification of NZCU South, NZCU Central, NZCU Steelsands, Aotearoa Credit Union and NZCU Baywide under one brand will create scale efficiencies that will allow the merged credit union to better serve its customers," the five credit un ions said in a statement. “Upon completion of the transfer of engagements, the merged credit union will be positioned as a strong competitive alternative to mainstream banking in New Zealand."
The proposal still requires votes by members of all the credit unions, a process that has yet to begin.
According to the CUs, the merged credit union would combine services and specialize in home loans, personal loans, savings and investments, transaction accounts, plus insurance for vehicles, loan protection, funeral protection, home and contents.
“The scale of the larger credit union will deliver efficiencies, better pricing for savings and lending rates, and reach across the combined nationwide branch network and online,” said Iain Taylor, chairman It will bring more potential to invest in technology to improve services and wider access to capital for the benefit of member owners," the statement quotes Iain Taylor, chairman of NZCU Baywide and a spokesperson for the CUs. “Scale does matter in an increasingly competitive financial sector and we all believe our united approach will bring a competitive banking alternative that is 100% customer and Kiwi owned.”
With the exception of Aotearoa Credit Union, all of the CUs currently use similar branding. The statement did not say what name or brand the combined CU would operate under. But all five currently use the Oracle Flexcube core system that is offered by New Zealand’s CU trade association, Co-op Money.
According to interest.co.nz, Aotearoa CU had been facing a $2 million capital-raising to meet its obligations after installing the Flexcube package, a requirement that the merger appears to forestall.