Two member-owned institutions have officially merged after receiving regulatory approval, creating one of the largest member-owned lenders in the country.
WA-based bank P&N Bank and Queensland-based lender Bananacoast Community Credit Union (bcu) have now officially merged, after the deal received both shareholder sign off and regulatory approval from the Australian Prudential Regulation Authority (APRA).
The merger will see both brands keep their identities, with the P&N (Police & Nurses) brand in WA and the bcu brand operating in NSW and south-eastern Queensland. However, bcu will now run as a division of P&N.
The national multi-brand organisation will have an asset base in excess of $6 billion, making it one of the largest customer-owned lenders in the country.
The new entity formed after both bcu members and P&N members independently returned a favourable vote of 87 per cent for the merger resolution at the end of last week.
A 75 per cent approval rate was required by both sides for the merger to go ahead.
Following final approval from APRA, the newly-merged customer-owned institution officially became a merged entity on 1 November.
What the merger means
The merger will see employees and stores continue “business-as-usual operations”, however P&N Bank CEO Andrew Hadley will take up the helm as CEO of the new entity – replacing former bcu CEO Alan Butler, who stepped down from his role on 31 October.
Mr Butler had been at bcu for eight years, holding a range of positions before becoming CEO in December 2018.
In a written statement, the team at bcu wrote: “[We] were incredibly honoured to have worked for and, more importantly, with Alan, as he led bcu through a challenging banking environment.
“As we say our farewells, we are reminded of his constant support for our progress, his commitment and knowledge to the organisation, all staff and the communities we represent. We want to remember the significant achievements that were made during his time here at bcu.”
It concluded: “We want to thank Alan for all that he has achieved during his time with us and wish him the very best for his future.”
P&N Bank’s former chief risk officer, Michael Ribbens, has been appointed to the role of general manager bcu, and will be based in Coffs Harbour, NSW, while Steve Targett, the former chair of bcu, has now become deputy chair of P&N.
In a letter to members, Mr Hadley thanked all P&N members for their consideration of the proposal, “especially those who had conversations with our staff, sent in questions, attended our information sessions and have used their voice to vote for a stronger future with bcu”.
The new group CEO continued: “We remain committed to our customer-owned model and while P&N and bcu will share group services, we will continue to build the P&N brand in Western Australia, and the bcu brand in south-east Queensland and northern NSW.
“Our purpose will be to continue to deliver the best banking experience to our loyal members while attracting more Australians to the benefits of customer-owned banking.”
Mr Hadley said that the board, leadership team and staff were “excited about the value that this merger will create for members”.
The majority of changes that will take place will impact the back office, the lenders have said, and it is expected that the two lenders will merge their systems and platforms over the course of the next 12 months “to unlock economies of scale, so that we can continue to invest in better member products and services, and improve the member experience”.
P&N general manager Anna Pearce elaborated: “While it will take some time to complete the transition to bring many of bcu’s systems across to ours and align back office functions, once in place, we look forward to introducing new products and services that will make [members’] lives easier. For instance, because of this merger, we will soon be able to create a P&N small business banking offering, benefiting from the experience and capability bcu have in this market.
“Members have been asking for small business banking facilities for a number of years, and we look forward to being able to support them.
“We’ll be able to offer extended contact centre hours by sharing resources with the east coast, as well as removing certain fees on some lending and deposit products.”
Ms Pearce added that members “won’t see much difference in the way you conduct your day to day banking with P&N”.
The merger follows on from several other mutual and customer-owned bank mergers and merger assessments.
On 1 July, Holiday Coast Credit Union and Regional Australia Bank merged into one entity, now bringing the two banking systems together and are progressively moving to a single brand name, Regional Australia Bank.
Further, G&C Mutual Bank and Unity Bank outlined their intentions to merge in 2020, however after several months of assessments, the two banks have now resolved that it would “not be in the best interests of members to proceed with the merger at this point in time” given “operational challenges that would arise from merging”.
G&C Mutual Bank’s chair, Julian Kennelly, stated: “In reaching this decision, both boards acknowledge the goodwill, openness and respect that was evident during the discussions and are confident that each of our banks will continue to provide competitive and highly valued services to their members.
“Our two banks will continue working cooperatively and constructively with each other (including by sharing branches) to ensure that Australian consumers have access to a strong, viable and ethical mutual banking alternative.”
[Related: Mutually beneficial]
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.
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