Could new fees cause mutual banking merger momentum to fade?

However, as part of the federal government’s plans to introduce a mandatory and suspensory merger control system from 1 January 2026, new mergers subject to review by the ACCC will be subject to fees, scaled to reflect the type and complexity of the review.

According to the merger fee consultation (which closed last week), the changes are needed to “ensure businesses that propose mergers for assessment, rather than taxpayers, bear the cost they impose on the community to assess that risk”.

Speaking earlier this month, the assistant minister for productivity, competition, charities and treasury, Andrew Leigh, said that the proposed fees would also “ensure the ACCC is properly resourced to undertake its expert administrative decision-making role and can efficiently administer the new system”.

What will the new fees be?

Questions are now being raised as to the viability of the new fee schedule, given the size of some of the charges.

Cost recovery fees will be charged for notification waivers, phase 1, phase 2, and public benefits assessments that the ACCC conducts as part of the new merger control system. (An exemption from the fees will be available for acquisitions undertaken by small businesses so that fees are not a disproportionate burden for those businesses.)

For 2025–26, the proposed notification waiver fee will be $8,300.

Proposed fees for phase 1 assessments will be $56,800, covering reviews of all notified mergers.

For phase 2 assessments, the proposed fee will be just under $1 million, coming in at $952,000.

These are typically high-risk or complex mergers that pose the highest risk of competitive harms to the Australian economy and require “extensive legal and economic analysis, utilising compulsory notices, data analysis, oral examinations, and potentially external expert advice” to conclude the likely effects of the merger.

A recent example of a phase 2 merger was the ANZ-Suncorp Bank merger (which was initially blocked by the ACCC before later being overturned by the competition tribunal).

The ACCC said that phase 2 reviews account for almost two-fifths (39 per cent) of the total costs involved in ACCC merger decisions, despite involving a small number of reviews.

The regulator said that only a small number of mergers will proceed to a more in-depth consideration of the competition issues in a phase 2 assessment. The ACCC has forecast that 8.5 applications will reach this stage in the financial year 2026.

Notifying parties may also seek ACCC approval of an acquisition on public benefit grounds, which could incur proposed fees of $401,000.

Commenting on the proposed phase 2 fees, commercial law firm Corrs Chambers Westgarth said that fees are significantly higher than comparable fees levied in other countries, including the UK, Germany, Canada, and Singapore.

“These very high proposed phase 2 fees will disproportionately impact smaller merger parties and transactions, for which the fees will represent a greater proportion of the transaction value,” it said.

The firm said that the majority of agencies that levy fees at the higher end typically base fees on transaction value and turnover, not complexity, to avoid this risk.

Similarly, the ACCC is likely to be incentivised to push more deals into phase 2, rather than permitting protracted phase 1 reviews that seek to circumvent the fee structure, Corrs said.

Merger momentum could fade

However, the high fees could impact the mutual banking sector, which has been through a period of consolidation in recent years.

In the past three years alone, eight of the largest mutual banks have either merged or announced intentions to merge.

The latest National Mutual Economy (NME) report, published by the Business Council of Co-operatives and Mutuals (BCCM) last week, highlighted heightened merger activity among customer-owned banks, driven by the need to scale operations, invest in digital infrastructure and regulatory compliance, and remain competitive in an evolving financial landscape.

The mergers also allow customer-owned banks to extend geographic reach and enhance their product and service offerings.

The report found the number of customer-owned banks has continued to shrink, reducing from 72 in 2018 to 55 in 2024 (despite total assets continuing to rise, reaching almost $175 billion in the year).

More mergers are on the horizon – Bank Australia and Qudos Bank are set to unite in July, while Teachers Mutual Bank and Australian Mutual Bank, and Regional Australia Bank with Summerland Bank, are considering mergers for 2026.

Steve Laidlaw CEO, People First Bank, told the researchers: “We are at a critical moment for the customer-owned sector. Increasingly, Australians are turning to organisations that act with integrity, serve a clear purpose and contribute to their communities.

“That presents a real opportunity for co-ops and mutuals, but also a clear challenge. Customers also want banking to be simple and hassle-free. We need both simplicity, and our values differentiator, to ensure our future success.”

Damien Walsh, CEO & managing director, Bank Australia, said: “Customer-owned banks continue to face common challenges around economies of scale, replacing legacy technologies and growing cybersecurity threats.

“How smaller institutions balance these competing challenges and drive continued improvements in customer experience will be critical to their future success.”

In a speech on Thursday (19 June) at the BCCM’s CEO Strategy Roundtable, Leigh said that Parliament was considering reforms to mergers and mutual banks.

“In banking, we’re considering the barriers that small and medium‑sized banks face – including mutual banks, which are so often embedded in the communities they serve,” Leigh said.

A final report from the review into small and medium-sized banks – which includes mutual banks – is expected to be finalised next week.

He said: “We’re also tackling the big issues that affect competition more broadly. We’re delivering the most significant merger reform in half a century, making it easier to stop harmful mergers while speeding up pro‑competitive ones.”

[Related: Teachers Mutual and Australian Mutual boards endorse proposed merger]