APRA gives Bank Australia-Qudos Bank merger the green light

It would also have 900 employees and 15 branches across NSW, Victoria, Queensland, and ACT.

However, it is expected that both the Qudos Bank brand and the Bank Australia brand names will stay the same (“with an intention for future review”) and there will be no immediate changes following the merger.

Qudos Bank and Bank Australia will now provide members with voting materials, including a member information booklet, setting out details of the proposed merger and the benefits to members.

According to the banks, this includes:

• Greater value to members by taking a ‘best of both banks’ approach to products and services, including lower fees and charges on a range of products and services from day one.
• Greater scale and investment in better digital technology.
• An increased branch network (15 overall) with customer service support for members of both banks from the first day of combined operation.
• Access to a wider range of mortgage brokers.

Member voting will now commence, with the outcome of the proposal to merge confirmed at each bank’s special general meetings (SGM) in mid-April.

‘A merger of equals’

Qudos Bank and Bank Australia, both leading customer-owned banks, have said the merger would be “a merger of equals”, as they both have a shared history of supporting key industry sectors and communities since the 1950s, making them ideal merger partners.

Qudos Bank, originally established for Qantas employees in 1959, and Bank Australia, which began by serving employee credit unions across various sectors (including science and technology, education, energy, media, and aviation), both uphold a strong commitment to customer ownership.

The two lenders believe their merger would unite these legacies, reinforcing their dedication to fair banking, reinvesting profits for customer benefits, and supporting community and environmental initiatives.

Welcoming the decision, Qudos Bank CEO Brendan Wright said: “I’m very pleased to announce that we have received regulatory approval to take the proposed merger to our respective members for their endorsement.

“Getting the green light from APRA means we can progress with our plans to create one of the largest customer-owned banks in the country, supporting 300,000 members with total assets of over $17.5 billion.

“Our aim is to deliver greater value to members today and into the future by taking a ‘best of both banks’ approach to the merger. This approach will provide immediate benefits to members via lower fees and charges on a range of products and services and an expanded branch network.

“For Qudos Bank members, ten more branches will be available including in the CBD of Sydney, Melbourne, Brisbane and Canberra. There will be no branch closures as a result of the merger.

“Members of both banks will shortly receive voting materials and more details on the proposed merger via the member information booklet. We encourage all members to read the materials, understand how the merger will benefit them and have their say by casting a vote.”

Bank Australia’s managing director Damien Walsh said: “From the outset, both Bank Australia and Qudos Bank have worked collaboratively on this strategy, adopting a merger of equals approach and focusing on how the merger can benefit our members, employees and communities.

“Bank Australia and Qudos Bank share strong values, purpose and cultural alignment and this merger will allow us to create a better, stronger and more resilient bank for our members.

“This merger will increase our ability to invest in better products, services and technology, while building on our commitment to create positive impact for people and the planet on behalf of our customers.

“A successful merger will give us the scale and ability to invest in a range of critical areas like digital experience, cybersecurity, and fraud detection and prevention technology to help keep our customers and their money safe.

“Our people will also benefit from enhanced career development and growth opportunities as a part of a larger customer-owned bank and we remain committed to 100% Australian-based employees, including contact centres.”

Next steps

Members are being urged to vote in favour of the merger (which was first announced in February 2024), with Qudos Bank having already opened online voting, which closes at 5pm (AEST) on 12 April 2025.

The boards of Qudos Bank and Bank Australia have both unanimously recommended that members vote ‘Yes’ for the merger.

If approved, the merger would take effect from 1 July 2025.

Walsh, the current CEO and managing director of Bank Australia, will lead the new organisation and head office operations will be split across current locations in Sydney and Melbourne.

Jennifer Dalitz, the current chair at Qudos Bank, would become the new chair of the merged bank, with Qudos Bank having equal representation on the board of directors on completion of the merger.

All non-executive employees will be offered or have the opportunity to apply for roles in the merged bank.

Mutual merger mania

The Bank Australia-Qudos Bank merger is one of a number of mutual bank mergers in the past year, with two having completed in the past year and another three in progress.

These include:

• G&C Mutual Bank and Unity Bank
• Teachers Mutual Bank Limited and Australian Mutual Bank Limited
• Summerland Bank and regional NSW lender Regional Australia Bank

It comes following warnings from APRA that mergers could be a possible solution to access advanced technologies and specialised expertise that would “otherwise be prohibitively expensive or too complex to develop internally”.

The prudential regulator has also recently said that some mutuals lack the skills to navigate a modern banking environment and need to continue to reduce strategic risks amid rising competition, the cost of new tech, changing customer behaviours, and the “war for talent”.

Speaking earlier this week, APRA’s executive board member for banking, Therese McCarthy Hockey, said that APRA had observed that the boards of some mutuals “lack the necessary skills to guide their banks in a modern banking environment, in particular, technology skills”.

To combat this, the banking specialist said mutuals needed to focus on upskilling directors and bringing in “fresh talent”, potentially looking “beyond [the] bank’s traditional geographic or industry-based pool”.

Hockey also said that mutual banks may also lose out due to the lengthy tenure of board members.

“Long tenure begins to raise questions about the ongoing ability of directors to exercise impartial judgement, challenge management effectively and be open to new ideas,” she said.

[Related: Mutual mania: The great wave of mergers continues]