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Brokers set to get new $4.7bn lender

by Nick Bendel10 minute read

Unicredit looks set to make a back-door entry into the third-party channel after approaching Teachers Mutual Bank for a merger.

Perth-based Unicredit has initiated moves to merge with Sydney-based Teachers Mutual Bank. Both lenders specialise in the education sector.

The two parties have signed a memorandum of understanding to work towards a merger, which would need to be approved by Unicredit’s members and APRA. The merged entity would be given a new name.

According to Unicredit’s annual report for 2013/2014, the credit union has assets of $199.3 million, while Teachers Mutual has $4.5 billion.


Teachers Mutual chief executive Steve James told The Adviser that the two parties are hoping for the merger to take effect in July.

Mr James said the move would boost Teachers Mutual’s broker business because it would increase its Western Australian customer base by about 150 per cent.

“It’s our intention to have the brand serviced by the broker networks. We are going to run a dual brand strategy,” he said.

Mr James said Unicredit was pleased that it would be able to access the third-party channel if the merger was approved.

“Of course, they’ve been very interested in the broker channel. They’re a $200 million organisation and have been interested in looking at the broker channel, but we’ll be able to do it through Teachers Mutual Bank and the new brand,” he said.

“We’ve got over 1,000 individual brokers accredited with Teachers Mutual Bank and [our broker business] is certainly growing and a very important part of our business, going forward.”

Unicredit posted a net profit of $550,000 last financial year, according to its annual report.

It made $146.1 million of loans and advances, with $142.6 million of those being mortgages. Of those mortgages, 86.4 per cent had LVRs of less than 80 per cent and 13.6 per cent had LVRs above 80 per cent.

Unicredit chairman Bill Ford said the credit union had sought a merger because it recognised that greater scale would make it more financially secure.

“From our perspective, we saw Teachers Mutual Bank as a perfect fit, with its strong primary and secondary education focus complementing our tertiary and post-secondary focus,” he said.

The Adviser revealed last month that several third-party banks had been holding discussions with lenders that are investigating moving into the broker channel.

[Related: Brokers have made us a better bank, says Teachers Mutual]

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