More than 90 per cent of members of Regional Australia Bank and Holiday Coast Credit Union members have voted in favour of merging to create a combined entity with $2.2 billion in assets and servicing 85,000 members across northern NSW.
The transfer of business will take place from 1 July 2019, subject to regulatory approval by the Australian Prudential Regulatory Authority.
It is expected that the systems will migrate in the months following.
According to the lenders, the customer-owned banking sector is generally experiencing consolidation as it “struggles to attain the necessary scale to meet changing market conditions”.
The merger will mark one of the largest in the customer-owned banking sector in recent times, the lenders said. Back in 2016, Teachers Mutual Bank merged with NSW-based Fire Brigades Employees’ Credit Union.
The chairman of Regional Australia Bank, Graham Olrich, commented: “While the sector proudly continues to grow, particularly as people turn away from the big four banks, it is smaller institutions that find it difficult to sustain that growth and keep pace with digital transformation and increasing regulatory complexity.
“While both HCCU and Regional Australia Bank have been performing well in their respective adjoining markets, we see this merger delivering tangible and immediate financial and non-financial benefits to members of both organisations.
“Additionally, it will also help preserve a strong and sustainable mutual financial institution in regional Australia,” he said.
Mr Olrich said he was “excited” by the prospect of value that the merger would deliver for members, adding that “competitive products and services, fair fees and charges as well as greater investment in technology and service systems for the long term will be some of the key benefits”.
“This is what the partnership is all about, creating sustainable value for members and offering genuine support to the communities where they live and work,” he concluded.
Mr Olrich will continue as chairman of the combined entity, with Kevin Dupé retaining his position as Regional Australia Bank CEO.
Retiring Holiday Coast CEO Neville Parsons will join directors Allan Gordon (chairman) and David Johnson as members of the Regional Australia Bank board.
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.