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The merger between G&C Mutual Bank and Unity Bank is expected to be completed in a few months after members voted in favour of the deal.
Ninety-nine per cent of G&C Mutual Bank members and 93 per cent of Unity Bank members have voted in favour of merging the two lenders, paving the way for the two banks to be integrated on 7 March 2025.
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The proposed merger of the two mutual banks was first announced in 2019 but was paused during the onset of the COVID-19 pandemic.
However, following the vote by G&C Mutual Bank members and Unity Bank in November 2024, the two customer-owned lenders will merge to become Unity Bank Limited. (However, the Unity, Reliance and G&C brands will be maintained for a period of 18 months immediately following the merger.)
Preparations are currently underway for the integration of banking systems onto one platform on 7 March 2025.
The merged bank will have assets of $3.6 billion and 27 branches across NSW, Queensland, Victoria, South Australia, and Western Australia.
Danny Pavisic (CEO of Unity Bank) will initially serve as CEO, with Rosanna Argall (currently the CEO of G&C) as deputy CEO. However, 12 months after the effective merger date, Pavisic will retire from the role of CEO, and Argall will assume the position.
The merged bank’s board will consist of 10 non-executive directors, with five directors drawn from the existing G&C board and five from the existing board of Unity.
No branch closures or staff layoffs are expected.
According to the two lenders, the merger is necessary to manage high fixed costs while delivering better value, service, and modern technology to members.
They have said the merger will enhance digital banking capabilities, offering modern, secure services and mobile app experiences.
It will also be able to access cheaper sources of funds to meet its loan demands, enable members to access a wider range of products, reduce or eliminate over 40 fees, and extend fee exemptions to more members, collectively saving over $720,000 annually, all while maintaining day-to-day service continuity, the merger booklet suggests.
Who are the two lenders?
Founded in 1970, Unity was formed as a mutual credit union to cater for Australians and their families employed within the maritime industry
It has grown to 40,000 members and, over the last 10 years, has merged with eight credit unions.
G&C Mutual Bank, meanwhile, was established 65 years ago as the Public Works Department Credit Union servicing public sector employees and has since grown and evolved through 18 mergers to now have seven branches with $1.7 billion in assets.
Mutual mergers in focus
The mutual banking sector has been experiencing a wave of mergers in the past few years, with Teachers Mutual Bank Limited and Australian Mutual Bank Limited (AMB) revealing last month that they are also exploring a merger.
If the merger goes ahead, the two mutuals would create one of Australia’s largest member-owned banks, with $13.4 billion in assets and more than 300,000 members. While still subject to due diligence and regulatory approval, the merger is expected to be completed by 2026, with a member vote slated for that year.
Other significant mergers currently being explored include MyState Limited and Auswide Bank (a member vote is scheduled for February 2025) and the banking business of insurance mutual Australian Unity, which is set to be acquired by Bank Australia (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).
However, not all merger opportunities have been successful recently, with Police & Nurses Limited (P&N) revealing last year that it had “decided not to proceed” with its proposed merger with Beyond Bank Australia.
You can find out more about the wave of mutual mergers in the October 2024 edition of The Adviser magazine here.
[Related: A mutual merger 4 years in the making now confirmed]
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