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The vote on the proposed merger between two non-major banks has been postponed to 2025, following delays to necessary approvals.
A shareholder vote on the the proposed merger between Tasmanian-based lender MyState Limited (MyState) and Bundaberg-headquartered lender Auswide Bank (Auswide) has been delayed until 3 February 2025, following delays to relevant approvals.
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The merger – which would see MyState Bank continue as the parent company of the merged group – was first announced in August and a shareholder vote on the scheme was expected to be held today (Monday, 2 December).
However, this has now been rescheduled to 3 February 2025 as the two entities “continue to progress the relevant applications with regulators”.
The scheme agreement is subject to a number of conditions precedent, including that the Treasurer has provided relevant consents and approvals (or the Australian Prudential Regulation Authority [APRA] has done so if that power has been delegated).
The two banks have said they continue to work with APRA to progress the relevant applications.
Auswide said it expects to be in a position to announce the outcome of the applications in “early calendar year 2025”.
As such, the vote has been postponed to 3 February.
If Auswide shareholders vote in favour of the merger (which has been unanimously recommended by the Auswide board), the deal will be implemented on 19 February.
Commenting on the delay, Doug Snell, managing director and CEO of Auswide Bank, said: “Regardless of the timing of the shareholder meeting and its outcomes, Auswide will get on with the hugely important job of serving our customers.
“It’s essential that we remain focused on supporting our customers, partners, people and local communities.
“While we await the necessary approvals and even after the entities are legally merged, it is ‘business as usual’ with a continued focus on helping our customers finance their goals, grow their wealth, manage their finances, and protect their assets while providing exceptional customer service.”
What would a merged entity look like?
If approved, the merged group would have around 272,000 customers, a pro forma loan book of $12.5 billion (circa $8 billion from MyState and $4.5 billion from Auswide, both largely originated by the broker channel), net assets of $755 million, and total deposits of $9.6 billion.
Once merged, 34.4 per cent of its home loan distribution would be in Queensland, with a fifth in Victoria and another fifth in Tasmania.
MyState would continue as the parent company of the merged group, with Auswide becoming a wholly owned indirect subsidiary.
MyState CEO and managing director will become CEO & MD of the merged entity, with Sandra Birkensleigh (currently the chair of Auswide) becoming the chair of the merged company while Warren Lee will continue as the chair of asset manager TPT Wealth.
Auswide will also nominate three directors to join the MyState board (which will have four MyState members).
Operational integration is expected to be achieved by the end of the financial year 2027.
Speaking earlier this year, Vaughn Richtor, the chair of MyState Bank, said the merger would bring “greater revenue, portfolio diversification and scale for cost efficiency and customer reach”.
He said in October: “Both businesses share customer-centric cultures and national distribution networks of mobile lenders and brokers while maintaining a physical presence in their home states of Queensland and Tasmania. The proposed merger will deliver greater revenue, portfolio diversification and scale for cost efficiency and customer reach.”
Looking to the future, Richtor said that the proposed merger would further diversify both the lenders’ loan balances geographically and support continued growth in deposits.
“The immediate increase in scale will enable the Merged Group to benefit from the ability to spread operational and future investment costs across a larger customer base and loan portfolio,” the MyState chair told AGM attendees.
“The Merged Group will also reaffirm its position in the ASX 300 index, which will provide greater access to capital markets and broaden investor interest in MyState stock.”
Brett Morgan, the managing director and CEO of MyState Ltd, said: “Combining two complementary businesses with a broad reach across the Eastern seaboard, will enable delivery of substantial value for our people, customers, communities and shareholders.”
He told The Adviser that brokers would continue to be the dominant channel for home loan distribution.
“Customers continue to choose brokers more and more because of the proposition they offer them and the choice they offer. For us, this merger creates a great ability to better compete for broker-originated business and be better partners than we are now,” he said.
“So, brokers will absolutely be the predominant channel for the merged business.”
[Related: Brokers will ‘absolutely be the predominant channel’ if MyState and Auswide merge: MyState CEO]
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