Australia's financial landscape continues to consolidate.
The latest player is Royal Automobile Club of Queensland (RACQ). On Thursday, the Queensland-based mutual revealed that it has sold its retail lending and deposit business to Bendigo Bank for an undisclosed amount.
RACQ Managing Director and Group Chief Executive Officer David Carter said the sale was for the best.
"While RACQ Bank has achieved quality growth since its inception in 2016, for us to deliver the best banking experience for our members, significant ongoing investment is needed to meet the growing demand for digital banking, maintain a competitive position and meet regulatory requirements," Carter explained. "We concluded that it was in the interests of our members to find a better banking solution to meet their needs over the longer term."
The final sale price will be based on the assets and liabilities of RACQ’s retail lending and deposit business at the point of completion, RACQ said.
RACQ could not be reached for further comments.
The sale means roughly 90,000 banking customers will migrate to Bendigo. RACQ customers will have access to Bendigo Bank's products, including checking and savings accounts, credit cards, home loans and personal lending solutions. In addition, banking members are guaranteed to keep their membership with RACQ for 12 months after the completion of the transaction. The acquisition is also expected to increase Bendigo Bank's footprint in Queensland's residential loan market to 18%, up from 15%.
The sale is expected to be finalized in the back half of 2026, pending regulatory approvals. Until the deal is fully completed, RACQ Bank will keep operating under its current brand.
But the deal reflects a broader trend in Australia’s rapidly shifting M&A landscape, which is increasingly driven by consolidation.
"It's more of what we expected," Chris Slater, new head of strategic growth at Australian private equity firm Recludo Group, told Australian Broker. "Consolidation is coming. I still think there's a few more big plays in that space coming. Scale is important. So it's no surprise to me to see transactions like this happening."
Examples can be seen throughout the market. In September, Recludo Group, which works by purchasing mortgage brokerages, revealed that it had snapped up three firms since the start of the year. The same month, Aussie alternative asset manager Salter Brothers agreed to buy private credit fund manager Causeway Asset Management Limited.
On the lender side, Bank Australia wrapped up its second acquisition in 2025 last month, this time with Australian Unity Bank. The lender also completed a merger with Qudos Bank in July. This past April, Regional Australia Bank and Summerland Bank formally agreed to merge their operations by 2026. In September, customer-owned banks Great Southern Bank and P&N Group (Police and Nurses Limited), signed a memorandum of understanding (MOU) to discuss a potential merger. 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.
Slater said the trend is largely driven by one thing: running a bank has become extremely costly.
"I would say a lot of it would be driven by the lack of banks' ability to actually compete and grow profitably and get a return," he explained.
"If you listen to the commentary that's coming out of the big banks, and even if you talk to the second-tier banks, they'll tell you the same thing: it’s very cost intensive to run a bank," Slater continued. "The regulatory costs are a lot. And the costs of the margins that they're making are being squeezed. So there's definitely something to be said — with the net interest margin that they're making — for merging and getting some costing-reducing in scale."
In the case of RACQ, Slater said the sale is understandable. "RACQ is pretty big, so it’s probably a good strategic alliance. And Bendigo Bank is trying to spread its footprint. It's obviously got ambitions to go where Macquarie Bank went. So that kind of makes sense that they're doing that."
