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With due diligence having been completed on another mutual merger, both boards are now recommending that the deal proceed.
The boards of both Regional Australia Bank and Summerland Bank have given the green light for the proposed merger to proceed to the next steps, following the completion of a successful “intensive, independently conducted” due diligence process.
If members vote in favour of the scheme (expected in late 2025) and all regulatory approvals are met, the two longstanding mutuals would increase their customer base to over 130,000 and have combined assets of $4.8 billion.
It is anticipated that a legal merger would come around 1 July 2026.
What would a merged entity look like?
The two customer-owned banks first announced their intent to merge in October 2024 and proposed bringing together Summerland Bank – a 60-year-old bank headquartered in Lismore – and Regional Australia Bank – a 56-year-old bank established in Armidale – into one group.
The merger aims to improve banking services through increased digital capabilities, a broader branch network, and greater operational scale. It also represents a strategic decision to combine two mutual banks with a focus on meeting the needs of their regional communities.
The merged organisations are expected to continue operating under the Regional Australia Bank and Summerland Bank brands in their respective locations until at least mid-2026, while future branding decisions are considered.
Both lenders have committed to keeping all branches open (including Regional Australia Bank’s 39 branches across regional NSW and Summerland Bank’s 10 across NSW and South-East Queensland) as a result of the proposed merger.
The CEO of the combined institution will be David Heine, the current CEO of Regional Australia Bank.
John Williams, the current CEO of Summerland will be the deputy CEO (strategy). Michelle Edmonds will retain the role of deputy CEO (customers).
‘A natural and powerful partnership for our future’
Noting the board approvals, Heine, the CEO of Regional Australia Bank, said: “The successful completion of the due diligence phase and board approvals highlights the strength of our alignment, values and shared ambition for our proposed merger.
“This partnership represents a meaningful milestone in our ambition to be chosen by more regional Australians to be their bank.
“Together, we can accelerate our work to deliver a more vital regional Australia through finding the good that money can do.”
The Summerland Bank CEO, Williams, said: “Now that the important due diligence phase has been completed, we look forward to further engaging with customers over the coming months.
“We are excited about this natural and powerful partnership for our future, that is based on our strong collective culture and mutual commitment to putting customers and communities first.
“Together, we will deliver more value, more innovation, and a stronger future for our members and respective communities as we grow and expand.”
Speaking to The Adviser last year about the proposed merger, Williams said he believed any merged entity would continue to have a “strong commitment to the broker channel” and would likely have “an expanded range and an enhanced product offering for the broker channel” if merged.
Mutual merger mania
The Summerland Bank-Regional Bank of Australia merger is one of several currently underway in the mutual banking space.
Last week, the members of Bank Australia and Qudos Bank voted in favour of their proposed merger, which would create a group with a combined total of over $17.5 billion in assets, serving 300,000 customers in Australia across an expanded 15-branch network across NSW, Victoria, Queensland, and the ACT.
The banks will now seek final regulatory approval from APRA (having already had preliminary approval) as they prepare to bring the two organisations together as a merged entity on 1 July 2025 (with the total transfer of the business of Qudos Mutual Limited to Bank Australia Limited).
Other mergers in the mutual space still underway include Teachers Mutual Bank Limited and Australian Mutual Bank Limited.
Earlier this year, several other mutuals completed their mergers. This included Auswide Bank and MyState Bank Limited (Auswide is now an indirect wholly owned subsidiary of MyState Limited) in February and G&C Mutual Bank and Unity Bank last month (which will consolidate to become Unity Bank Limited from 1 July 2025).
Other notable mergers in the customer-owned banks recently include People’s Choice and Heritage Bank, now known as People’s First.
[Related: Brokers will be key if 2 mutuals merge: Summerland Bank CEO]
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