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Two non-major banks are on track to merge next month, after the federal Treasurer approved their proposed merger scheme.
The proposed merger between Tasmanian-based lender MyState Limited (MyState) and Bundaberg-headquartered lender Auswide Bank (Auswide) has moved a step closer to conclusion after federal Treasurer Jim Chalmers gave the deal the go-ahead.
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The Treasurer's approval is required under the Banking Act 1959 and the Financial Sector (Shareholdings) Act 1998 for either a merger between non-major banks or a takeover by one of the major banks of another bank.
Last week, the federal Treasurer approved the proposal for MyState to acquire 100 per cent of the fully paid ordinary shares in Auswide.
MyState welcomed the Treasurer’s approval, with managing director and CEO Brett Morgan (who is set to lead the merged entity) stating: “This is a significant milestone in our plans to grow the combined businesses into a stronger and larger regional bank.
“The combination of two high-quality and complementary businesses is consistent with the growth strategies of both organisations and brings scale advantages to the group.
“We are confident the proposed merger will deliver substantial benefits to customers and shareholders,” he said.
Given the Treasurer’s approval, the proposal will now go to an Auswide shareholder vote, which will be held at a meeting on 3 February 2025.
If shareholders approve the scheme (which has been unanimously recommended by the Auswide board), a hearing will take place at the Supreme Court of New South Wales on 7 February to ratify the proposal.
The merger is scheduled to complete on 19 February 2025.
Plans for the MyState acquisition of Auswide "well advanced"
According to Morgan, plans for the integration of MyState and Auswide are “well advanced”.
As previously announced, 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.
According to Morgan, brokers would continue to be the dominant channel for home loan distribution.
[Related: Brokers will ‘absolutely be the predominant channel’ if MyState and Auswide merge: MyState CEO]
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