Non-major launches mutual bank partnership

by Adam Smith17 Nov 2014
An Australian non-major has announced a new alliance with mutual lenders that sees it take on the books of four credit unions.

Bendigo and Adelaide has announced the launch of its Alliance of Australian credit unions, which sees it take on the loans and deposits of AWA, BDCU, Circle and Service One. Under the model, the credit unions will continue to be serviced by local branch staff and reserves will remain 100% member-owned.

Service One chief executive Peter Carlin said the partnership would allow the mutuals to retain their identity, while positioning them for growth and eventual access to new products and technology.

"By working with Bendigo to develop the Alliance model we have been able to achieve the best of both worlds for our members and for the communities we serve. We keep our independence, remain 100 per cent member-owned and continue to provide a very caring, personal service," he said. “At the same time the agreement with Bendigo opens up greater capacity to meet our members’ needs, offer greater competitive choice and provide access to a wider range of services and modern service technologies."

The agreement will require approval from 75% of the members voting at the respective credit union AGMs, as well as from APRA and the Federal Treasurer.The four credit unions combined have 39,000 members and are expected to transfer around $550 million in loans and around $620 million in deposits.