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Mutual bank and credit union to merge

Teachers Mutual Bank has announced that it will merge with a NSW-based credit union, as part of the bank’s ongoing “strategic growth strategy”.

The leading mutual bank and NSW-based Fire Brigades Employees’ Credit Union are expected to merge next month, after the credit union’s members voted strongly in favour (86 per cent) of joining the bank.

According to the mutual lender, the merger will “build scale and strengthen its market position” as the credit union’s 7,400 members and more than $215 million in assets will “complement [the bank’s] multi-brand portfolio”.

“This merger brings strong synergies and efficiencies which will ultimately bring more benefits to all members,” said Steve James, CEO of Teachers Mutual Bank Ltd.

Speaking to Mortgage Business, Mr James added: “We've just introduced the UniBank brand over the last few months into the broker network and hopefully by February next year we'll also introduce the Firefighter's Mutual Bank brand alongside Teacher's Mutual Bank.”


Mr James said that the Fire Brigades Employees’ Credit Union will be “rebadged and taken nationally as Firefighter's Mutual Bank”.

He explained: “The members will be part of Teacher's Mutual Bank Ltd, but they will certainly work under their own brand. So, we will take that bank — like we did with UniBank — nationally across Australia. Unicredit before it became UniBank was in WA, Firefighter's was just in NSW — so we will be taking those brands nationally through the broker network and other adventures.

“We see Firefighters Mutual Bank as a national brand, targeting firefighters and their families across Australia,” he added.

“In a consolidating customer-owned banking sector, we continue to seek opportunities to partner with like-minded institutions in our ongoing quest to build scale and financial strength.”

The composition of Teachers Mutual Bank’s current board will be unaffected by the new merger, which is expected to go ahead on 1 November, subject to final approvals by the regulators.


Future growth

As well as announcing the merger, Mr James said that the mutual bank is focusing its sights on technology to grow the brand.

Speaking to Mortgage Business, Mr James said: “Where we are also spending money is in the technology area for the millennials. We want to take on younger members and we need to have all the products and service around the mobile strategies so we're spending a lot of time and effort and money in that particular space.

“We're working with some fintechs at the moment, with other mutual and credit unions, and there'll be some products coming forward out of that which we'll announce in future."

Teachers Mutual Bank has also announced that it will “expand and diversify sources of liquidity and capital via the wholesale market” with a capital issuance in 2017, subject to market conditions.

Mr James expanded: “The Capital issuance is a Tier 2 offering of subordinated debt offering around $20 million. Whilst we're very strong on capital, it will give us an opportunity to raise some more capital in that market.”

[Related: Bank resumes investor lending, launches 98% LVR loan]



Mutual bank and credit union to merge

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Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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