Great Southern Bank and P&N Group (Police and Nurses Limited) are talking about making their relationship official.
On Monday, the two customer-owned banks revealed that they had signed a memorandum of understanding (MOU) to discuss a potential merger. If the Great Southern and P&N Group – which operates P&N Bank and BCU Bank – do tie the knot, it would become one of the largest customer-owned banking entities in Australia with combined assets of around $30 billion.
The relationship would benefit both partners, combining Great Southern's strength in Queensland, New South Wales and Victoria, with P&N Bank's footprint in Western Australia and BCU's established network in Northern NSW and Southeastern Queensland.
“We have been deliberate in our choice of partnering with Great Southern Bank for this potential merger opportunity," said P&N Group chair Gary Humphreys. "Great Southern Bank is a financially strong Australian customer-owned bank with a solid reputation and shared values. The prospect of enhancing our shared commitment to face-to-face customer service and the personal touch our customers love, is an exciting one for our employees and our customers.
"We believe that our customers will benefit from being a part of one of Australia’s leading customer and community-focused banks," he added.
P&N Group managing director and chief executive officer Andrew Hadley (pictured above right) added: “Banking continues to change at pace. Our industry is highly competitive, and given the critical investments required in digital banking, cyber security, technology and regulation, a merger of this scale would benefit our customers and help ensure that we remain competitive and sustainable.
“By combining our financial resources, strengths and people capabilities, the merged entity would be in a better position to continue to invest in delivering the most value and service to our customers of today and the future."
In a joint statement, the two banks said that all three brands would remain "100% customer owned" if a merger were to occur. In addition, all team members would be offered roles within the new merged entity, which would operate with dual head offices in Perth and Brisbane, and serve approximately 620,000 customers.
The proposed board would feature balanced representation from both institutions, with Great Southern Bank Chair Deborah O’Toole set to serve as the inaugural chair, and P&N Group’s current chair, Gary Humphreys, to take on the role of deputy chair. Paul Lewis would be appointed as the first chief executive officer of the merged entity, supported by a deputy CEO based in Perth, who is yet to be named.
A merger is pending regulatory and board approvals. A member vote would take place in late 2026.
The Great Southern Bank and P&N Group tie-up in the latest in a string of M&A action Down Under. Worldwide deal volume reached approximately $5.27 trillion (or US$3.4 trillion) in 2024, up 8% from the previous year, according to MergerMarket data. In Australia, total deal value climbed by nearly 30%, rising from more than $110 billion to nearly $142 billion, (or US$71 billion to US$91.5 billion), over the same period.
"There's a lot of chatter, and a fair amount of [M&A] activity at the moment," Chris Slater, head of strategic growth at Aussie private equity firm Recludo Group, told Australian Broker. "The industry has matured; many brokers are looking to exit and other firms are looking to come in. That's the natural cycle based on the age of the industry."
Examples of deal activity are emerging across the board. Earlier this month, Recludo Group, which works by purchasing mortgage brokerages, revealed that it had snapped up three firms since the start of the year. Also in September, Aussie alternative asset manager Salter Brothers agreed to buy private credit fund manager Causeway Asset Management Limited.
On the lender side, members of Bank Australia and Qudos Bank approved a merger in April. That same month, Regional Australia Bank and Summerland Bank formally agreed to merge their operations by 2026. There's also Auswide Bank and MyState Bank Limited, G&C Mutual Bank and Unity Bank, Teachers Mutual Bank Limited and Australian Mutual Bank Limited, and People's Choice and Heritage Bank.
"It's largely what we expected in the banking and finance sector," Slater said. "A lot of the smaller entities are coming together just to compete. It impacts how well they raise capital and how they put out loans. And the broker market is saturated. It's harder to come in and start from scratch. For new entrants, buying an established business with a customer base is easier.
"In the case of Great Southern and P&N, it's more about finding synergies to compete," he continued. "It gives them a bigger footprint and scale; allows them to compete in terms of net interest margins. And there's also plenty of private equity money out there and confidence in the sector. That means there's more investors coming across the channels."
