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A merger involving P&N and Beyond Bank will not proceed after being found to “not be in the best interests” of one of the lender’s members.
Police & Nurses Limited (P&N) has revealed that it has “decided not to proceed” with the proposed merger with Beyond Bank Australia.
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First announced in June 2024, the merger would have brought together the two customer-owned banks to create a much larger lender (with a combined book of around $20 billion).
However, P&N has now revealed that its due diligence process on the potential merger with Beyond Bank has concluded and the board has “determined that progressing the merger would not be in the best interests of its members”.
P&N’s chair Gary Humphreys said the board had hoped that the due diligence process would result in a merger recommendation. However, undisclosed issues were raised in this process.
“While it’s disappointing that we will not be progressing this opportunity, our due diligence process was robust and I am confident that we have made the right decision,” Humphreys said.
P&N said it remained “operationally strong and secure in its current state; however, size and scale remain important given the ongoing investments required in areas such as cyber security, fraud and financial crime”.
“We will therefore continue to pursue our strategic agenda to grow organically and through mergers while always acting in the best interests of our members,” the bank said.
Beyond Bank has also confirmed that the proposed merger will not proceed.
In a statement, the bank said: “As one of Australia’s most trusted customer-owned banks, Beyond Bank customers will always be its highest priority and it is looking forward to continuing to provide financial wellbeing for them and their local communities.
“Beyond Bank remains a strong prosperous bank with an exciting strategy for the future.”
It said that it was bound by confidentiality obligations in the memorandum of understanding, adding there would be no further comment.
However, reports from The Australian Financial Review (AFR) have suggested that issues may have been flagged given the new Beyond Bank CEO (and former RAMS CEO) Jake Bromwich was at the helm of mortgage franchise RAMS during a period when questions were being asked by the financial regulator about company conduct.
In its interim financial results, Westpac said that it had “engagement with various regulators in relation to RAMS”, including an enforcement investigation by the Australian Securities and Investments Commission (ASIC) into RAMS Financial Group and RAMS-authorised credit representatives (including RAMS franchisees in connection with the provision of home loan products from 1 January 2019 to 1 September 2023).
The current focus of ASIC’s investigation is on RAMS’ general conduct obligations, prohibitions on conducting business with unlicensed persons, and giving misleading information.
A class action has also been launched by former franchisees, contending they were let go without basis.
Westpac shuttered the RAMS business last month, amid growing concerns relating to the franchise.
[Related: Westpac axes RAMS]
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