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Beyond Bank has outlined a broker growth strategy in regional Victoria and South Australia, which could unfold under its potential merger with South West Credit Union.
On Thursday (4 November), Beyond Bank and South West Credit Union revealed they had entered merger discussions, mulling the creation of a joined entity with around 290,000 members and $8 billion in assets under management.
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South West Credit Union, which was formed in 1964, has traditionally served members in Warrnambool, Victoria and the surrounding regions.
Beyond Bank on the other hand, has a greater national presence, with around 40 branches across South Australia, the ACT, Western Australia, Sydney, Newcastle, and the Hunter Valley and Riverina regions.
But the bank has signalled that under the proposed deal with South West, it would focus on pushing out into Warrnambool and regional Victoria and South Australia.
Darren McLeod, head of third party at Beyond Bank explained the game plan to The Adviser.
“The proposed merger will see Beyond Bank focus on the Warrnambool and surrounding regions (particularly from Adelaide through to Melbourne) to build out a growth strategy in partnership with brokers through these regional areas,” Mr McLeod said.
“We look forward to engaging with brokers through those regional towns over the coming year.”
In terms of new lending, Beyond Bank reported around 40 per cent is sourced through the third-party channel.
“This has been growing every year as has the spread and depth of Beyond Bank’s broker presence through Australia,” Mr McLeod said.
The potential deal has followed other similar developments in the mutual banking space.
Earlier this week, Teachers Mutual completed a merger with Pulse Credit Union, which came after its merger with Firefighters Credit Co-operative in May.
Other mergers have been in play, including Newcastle Permanent seeking to potentially amalgamate with rival mutual group Greater Bank.
Newcastle Permanent chair Jeff Eather told The Adviser’s sister brand Mortgage Business that he believes the mutual merger mania will continue, as smaller banks seek scale to manage technology costs and fight for relevance.
Meanwhile, Heritage Bank and People’s Choice Credit Union are also in the process of completing due diligence for a potential merger, with a member vote due in early 2022.
[Related: Heritage leaders address merger proposal concerns]
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