Mutual bank and credit union complete merger

A mutual bank has revealed that it has finalized the legal transfer to finalize a merger with a credit union.

Teachers Mutual Bank Limited (TMBL) announced the completion of the legal transfer to formalize its merger with Pulse Credit Union Limited (PCUL).

The final stage of the data migration will take place this week on November 5-6, 2021.

The finalization of the merger came after an overwhelming majority of PCUL members backed the proposed deal with TMBL.

The Australian Prudential Regulation Authority (APRA) gave its initial approval for the reconciliation of the two lenders in August after receiving the green light from both boards in July.

Going forward, 6,000 PCUL members who voted in favor of the proposed merger (98%) are now part of the Health Professionals Bank or UniBank (both are divisions of TMBL).

Additionally, the deal would see the credit union’s $ 122 million in assets join TMBL’s more than 220,000 member base and more than $ 9.75 billion in assets.

In a letter previously sent to members of Pulse, the president of the credit union, Neil McDonald, said the board considered this to be the “best and most appropriate strategy for Pulse to ensure a prosperous and sustainable future in a very difficult and rapidly changing financial services environment ”. .

According to TMBL, the transition would be a “natural fit” as PCUL has traditionally provided banking services to essential health workers such as nurses, midwives, doctors and hospital staff.

TMBL and PCUL had been exploring the deal since January this year, with Pulse citing business and technology challenges as its main drivers.

Previous mergers with La Trobe University Credit Union and Melbourne University Credit Union have enabled Pulse Credit Union Limited to expand the provision of banking services to members of the higher education sector, creating further alignment with UniBank.

All new members of Health Professionals Bank and UniBank have access to products and services such as a mobile banking app, unlimited ATM withdrawals, the new payment platform and the ability to request credit card.

In addition, new members would also have the opportunity to access socially responsible mortgage and deposit products, according to TMBL, who added that any retail mortgage or deposit product opened at TMBL is a responsible investment certified by Responsible Investment. Australasia Association at no additional cost. Cost.

Commenting on the completion of the merger, TMBL Managing Director Steve James said: “We are delighted to finalize our merger with Pulse Credit Union Limited and to increase the number of health and higher education members we have we serve in Victoria.

“While the Australian economy has remained fairly stable throughout the waves of the COVID-19 pandemic, the low interest rate environment and the push for digital offerings has put increased pressure on some of the smaller credit unions.

“As we move closer to the end of 2021, our board is optimistic about future merger opportunities with like-minded mutuals.

“At Teachers Mutual Bank Limited our goal is to provide good banking for those who do good and we take great pride in serving more than 220,000 members across Australia working in essential niches of education, emergency services and health care.

However, Jim O’Connell, head of industry partnerships at TMBL, told Mortgage Business that TMBL is not currently in discussions with other mutual banks about future mergers.

Speaking about the merger with PCUL, Mr. O’Connell said: “Preliminary merger discussions with Pulse Credit Union Limited have indicated that we share our commitment to providing personalized and high quality member experiences.

“As we worked through the due diligence process, the bond between our two mutuals grew stronger, despite the challenges posed by the Delta variant of the COVID-19 pandemic. Achieving an interstate merger with the borders closed is no easy task, but our teams have been passionate throughout the process and it’s fantastic to have 6,000 new members to serve.

Mutual mergers abound

Mr O’Connell acknowledged that there is an ongoing consolidation in the mutual banking sector, noting that some of the largest mutual banks have recently signaled their intention to merge.

Indeed, the latest merger represents the second for TMBL this year, after consolidating its Firefighters Mutual Bank and Firefighters Credit Co-operative brand in May.

There have also been various other mutual mergers at play, with Newcastle Permanent and the Greater Bank exploring merger options with the Greater Bank, with the two banks undertaking a due diligence process. The merger would create a bank with $ 19.8 billion in total assets and approximately 600,000 customers.

Newcastle permanent chairman Jeff Eather has said he believes more mergers will follow as smaller banks seek a scale to manage technology costs and fight for relevance.

Meanwhile, Heritage Bank and People’s Choice Credit Union are also completing due diligence on a proposed merger, with a membership vote expected in early 2022.

Commenting on this trend, Mr. O’Connell told Mortgage Business: “I think we will continue to see this trend manifest in the mutual sector as some of the smaller credit unions continue to face business and technological challenges. growing in an era of digital disruption, shrinking margins, increasing regulatory changes and the challenges resulting from COVID-19. “

[Related: Bank completes merger with credit union]