Mutual banks unveil plans to merge

by Madison Utley19 Aug 2020

Two non-major Australian banks have announced they are working towards a merger, as the smaller of the groups seeks scale to continue to provide its customers the best service possible amidst a tumultuous and unstable backdrop.

The partnership would see Firefighters Credit Co-operative Limited in Victoria join a branch of one of the largest mutual banks in Australia, Teachers Mutual Bank Limited.

Like Firefighters Credit Co-operative, Teachers Mutual’s Firefighters Mutual Bank division was established to look after the welfare and financial needs of firefighters and their families.  

Firefighters Credit Co-operative general manager Bob Malcom explained that recent events have encouraged industry collaboration and, with the two groups’ “strong synergies”, pursuing a partnership with Teachers Mutual was the obvious choice.

“The past year has brought many new challenges and we believe that in order to best serve members, the mutual banking sector must quickly adapt their commercial and technological offerings,” Malcom said.

“We reviewed our position and recognised that the best path forward was to seek a merger with a partner that understood our values and priorities and would allow us to achieve benefits of scale to deliver a sustainable future for our members.

“We identified Teachers Mutual Bank Limited as our preferred partner, because it is the right cultural fit. We are both strongly committed to becoming the main financial services provider for the national firefighter and emergency service worker community and I look forward to playing an ongoing role in this vision.”

Before the deal can be finalised, the proposal will require the approval of the Firefighter Credit Co-operative Limited’s members.

According to Teachers Mutual Bank CEO Steve James, the proposed merger shows “strong leadership and foresight by both boards of directors” in creating the opportunity for each to grow and provide better service to their firefighter members.

“The unprecedented market turbulence of the past year has demonstrated why size and scale matters in the mutual sector,” James echoed.

“As one of Australia’s largest mutual banks, we are able to provide our members with outstanding value through our ongoing investments in technology, a robust workforce of over 600 staff who are committed to delivering quality support and high engagement with the communities in which our members operate.”

The proposal is expected to be put to Firefighters Credit Co-operative members for a vote in early 2021 after due diligence and regulatory approval from APRA.