Teachers Mutual targets brokers as merger wraps

PCUL cited commercial and technological challenges as the main drivers for the merger.

The legal transfer has now been completed, with the final step of data migration to occur this week across 5 and 6 November 2021.

The majority of PCUL members recently supported the proposed deal with TMBL, with 98 per cent voting in favour of the proposed merger.

Following the announcement of the completion of the merger, head of industry partnerships Jim O'Connell told The Adviser that the mutual bank expects that the third-party channel would continue to support its goals for growth by “acting as our extended salesforce and helping us to reach members in locations where we may not have the same bricks and mortar representation as other lenders”.

TMBL reported that brokers contributed almost two-thirds (64.1 per cent) of its home loans in the 2020-21 financial year.

It released its FY21 results recently, in which it revealed that its home loan assets had grown by 20.1 per cent over the period to $7.7 billion.

The mutual bank also recently debuted its digital bank Hiver as a new bank under TMBL, with its app launch in June. Mr James had previously told The Adviser that it was due to soon launch its loan products, which would also be offered through the broker channel.

Following the merger, Carolyn Murphy, the chief digital bank officer who heads up Hiver, told The Adviser that Hiver’s project team is currently working on launching the home loan and personal loan products to Hiver in November.

“As soon as these are ready, we will be very excited to share more details about these products and how Hiver is providing digital and seamless banking services for Australia’s essential workers,” Ms Murphy said.

While Ms Murphy said it is difficult to predict what proportion of Hiver’s loans would be originated through the broker channel as it is a new brand that represents a new approach to banking, she cited recent research by Hiver, which showed that over half (51 per cent) of Australia’s essential workers said that a bank that understands the specific challenges of essential workers like them was critical to them.

“Hiver’s goal is to grow its membership by providing banking services and products that truly cater to the needs of Australia’s essential workers,” Ms Murphy said.

In June, TMBL launched a new streamlined home loan portfolio, dropping its previous six offerings down to three products: Classic Home Loan, Your Way, and Your Way Plus. These products are available in the Teachers Mutual Bank, Health Professionals Bank, Firefighters Mutual Bank and UniBank brands.

TMBL also introduced new benefits targeted at essential workers in education, emergency services, and healthcare.

Ms Murphy said that brokers currently play an important role in the growth of the brands, particularly for the UniBank brand, which targets graduates and students, and workers in the tertiary education sector.

Mutual merger trend continues

TMBL’s merger with PCUL is the second merger this year, after TMBL’s consolidation of its Firefighters Mutual Bank brand and Firefighters Credit Co-operative in May.

Another merger in the mutual lending sector includes Newcastle Permanent and Greater Bank exploring options to merge with Greater Bank, with the two banks undertaking a due diligence process. The merger would create a bank with $19.8 billion in total assets and around 600,000 customers.

Newcastle Permanent chair Jeff Eather said he believes more mergers would follow, as smaller banks seek scale to manage the costs of technology and fight for relevance.

Meanwhile, Heritage Bank and People’s Choice Credit Union are also in the process of completing due diligence for a proposed merger, with a member vote due early in 2022.

[Related: Teachers Mutual targets brokers in digital bank launch]