Two customer-owned banks are expected to merge on 1 July to create a combined entity with $2.2 billion in assets, after more than 90 per cent of their members voted in favour of the proposal.
The vast majority of Regional Australia Bank and Holiday Coast Credit Union members voted in favour of merging the two credit unions last week, as part of a move to form a combined entity with $2.2 billion in assets that would service a total of 85,000 members across northern NSW.
The transfer of business will take place from 1 July 2019, subject to regulatory approval by the Australian Prudential Regulatory Authority. The merger will mark one of the largest in the customer-owned banking sector in recent times, the lenders said.
Speaking of the merger, the chairman of Regional Australia Bank, Graham Olrich, said that the decision comes as the sector increasingly turns to consolidation to attain the necessary scale to meet changing market conditions.
The Regional Australia Bank chairman said: “While the sector proudly continues to grow, particularly as people turn away from the big four banks, it is smaller institutions that find it difficult to sustain that growth and keep pace with digital transformation and increasing regulatory complexity.
“While both HCCU and Regional Australia Bank have been performing well in their respective adjoining markets, we see this merger delivering tangible and immediate financial and non-financial benefits to members of both organisations.“Additionally, it will also help preserve a strong and sustainable mutual financial institution in regional Australia,” he said.
Mr Olrich continued: “We are excited by the prospect of value that this merger will deliver for our members. Competitive products and services, fair fees and charges as well as greater investment in technology and service systems for the long term will be some of the key benefits.
“This is what the partnership is all about, creating sustainable value for members and offering genuine support to the communities where they live and work,” he concluded.
Mr Olrich will continue as chairman of the combined entity, with Kevin Dupé retaining his position as Regional Australia Bank CEO.Retiring Holiday Coast CEO Neville Parsons will join directors Allan Gordon (chairman) and David Johnson as members of the Regional Australia Bank board.
It is proposed that the merged organisation will continue to operate both Regional Australia Bank and Holiday Coast brands in their respective locations.
Who do you aggregate through?
Thank you for your vote, you can see the results here.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
The mortgage broking industry was one of the key financial donors...
The corporate regulator is ramping up efforts to curb misconduct ...
Sixty per cent of first home buyers say they are more likely to c...