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A non-major bank has announced it will acquire a customer-owned lender, the second such acquisition in a year.
Bank Australia has announced it will acquire the banking business of insurance mutual Australian Unity, subject to regulatory approval (given the size of the transaction, a member vote is not necessary).
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The agreement will see the non-major lender acquire Australian Unity’s banking customers and existing loans, credit cards and deposit accounts. These total approximately 25,000 customers, $1.4 billion in loans and credit, and $1.6 billion in deposits as of 30 June 2024.
Australian Unity will transition its banking operations to Bank Australia in late 2025.
Bank Australia is also currently working towards a merger with Qudos Bank and is seeking approval from the Australian Prudential Regulation Authority (APRA).
The customer-owned bank noted the acquisition is subject to regulatory approval, with the expectation that it will take 12 months to complete.
Approval would create one of the largest customer-owned banks in the country, with more than 300,000 customers and more than $20 billion in assets.
Customers, employees and stakeholders from both banks have been told they will be kept informed during the acquisition process.
Damien Walsh, Bank Australia managing director, said the Australian Unity acquisition was a demonstration of a “continued commitment to mutuality, customer ownership and values-based banking”.
“As a strong, resilient customer-owned bank, Bank Australia is proud to support the ongoing needs of Australian Unity banking customers. We know the current market environment is becoming increasingly difficult for smaller credit unions and mutual banks to operate,” Walsh said.
“We look forward to welcoming Australian Unity Bank customers to our growing member base and continuing to provide them with the benefits of a customer-owned bank. We will work closely with Australian Unity to support their customers and employees through this period of change.”
“We are still working towards a larger merger with Qudos Bank and are currently seeking APRA approval before taking it to a member vote in 2025.”
Rohan Mead, Australian Unity group managing director, said the acquisition would have a positive impact on customers and the mutual banking industry.
“As Australia’s oldest wellbeing company, we have a track record of pursuing opportunities that ultimately improve the wellbeing of our members and customers,” Mead said.
“This transfer will provide Australian Unity Bank customers with the benefits of Bank Australia’s larger customer service footprint, greater digital capability and increased scale, providing long-term sustainability.”
The mutual banking space has seen a wave of mergers and acquisitions in the past few years.
Notable mergers include Greater Bank and Newcastle Permanent, G&C Mutual Bank and Unity Bank, Heritage Bank and People’s Choice Credit Union (now People First Bank), and Teachers Mutual Bank Limited and Pulse Credit Union Limited.
[Related: Mutual mania: The great wave of mergers continues]
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