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Credit union and bank to merge

Firefighters Credit Co-operative Ltd has announced plans to merge with one of the largest mutual lenders in Australia.

Victoria-based credit union Firefighters Credit Co-operative Ltd (FCCL) has signed a memorandum of understanding to merge with Teachers Mutual Bank Ltd (TMBL). The banking group, comprised of four divisions: Teachers Mutual Bank, UniBank, Health Professionals Bank and Firefighters Mutual Bank, is one of Australia’s largest mutual banks, with over 210,000 members and more than $8 billion in assets.

According to FCCL general manager Bob Malcolm, the merger talks came after the credit union faced “many new challenges” in the past year.

“We believe that, in order to best serve members, the mutual banking sector must quickly adapt their commercial and technological offerings,” he said.

“We reviewed our position and recognised that the best path forward was to seek a merger with a partner that understood our values and priorities and would allow us to achieve benefits of scale to deliver a sustainable future for our members.”

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Recognising the “strong synergies” in focus, the Victorian credit union aims to merge with TMBL under the deal, folding into the group’s existing firefighter brand, Firefighters Mutual Bank.

What the proposed merger entails

Speaking to Mortgage Business, Firefighters Mutual Bank general manager Jim O’Connell outlined that due diligence is currently underway, with an information pack expected to be sent out to the 3,000 FCCL members before a member vote in early 2021.

“Subject to that vote, [the proposed merger] goes back to the regulators for final approval, and then we can bring the two organisations together,” he said.

“We hope it will be completed by June next year, but most likely around April/May 2021,” he added.

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If approved next year, the FCCL brand would cease to exist independently and instead operate under the Firefighters Mutual Bank brand. 

All staff are expected to be retained in the proposed merger, and members of FCCL would likewise become members of TMBL.

Should the merger be approved, Mr Malcolm would then take responsibility for Firefighters Mutual Bank’s operations and business development in Victoria, reporting into Mr O’Connell.

Discussing the proposed merger, Mr O’Connell noted that when the Firefighters Mutual Bank brand formed in 2016 (through a merger with TMBL and Fire Brigades Employees’ Credit Union, where Mr O’Connell held the role of general manager), it was key to the brand to find a partner that could help it expand its product range and add more offerings around serviceability. He added that FCCL would likewise benefit from the merger by having access to the group’s product range and reach, including mobile and phone banking services.

The Victoria-based credit union – which currently has a loan book of approximately $35 million – would also benefit from expanding its reach from its state confines by utilising Firefighters Mutual Bank/TMBL’s broker network partnerships nationally, Mr O’Connell said.

He told Mortgage Business that FCCL and Firefighters Mutual Bank were both “values-based” and worked hard to deliver for their members.

“So, it was very logical to come together,” he said.

“We are very much focusing on the emergency services community, and we’re able to give back to those communities and their families.

“So, for all firies, for all emergency service workers and their families, we really think it can be a great place for them to do the banking into the future.”

FCCL’s Mr Malcolm added: “We identified Teachers Mutual Bank Ltd as our preferred partner because it is the right cultural fit. We are both strongly committed to becoming the main financial services provider for the national firefighter and emergency service worker community, and I look forward to playing an ongoing role in this vision.” 

TMBL CEO Steve James said that the proposed merger shows “strong leadership and foresight by both boards of directors in creating a strong opportunity for both mutuals to grow and provide exceptional service to their loyal firefighter members”.

“The unprecedented market turbulence of the past year has demonstrated why size and scale matters in the mutual sector,” Mr James continued.

“As one of Australia’s largest mutual banks, we are able to provide our members with outstanding value through our ongoing investments in technology, a robust workforce of over 600 staff who are committed to delivering quality support and high engagement with the communities in which our members operate.” 

There will be no changes to the current composition of the Teachers Mutual Bank Ltd board.

[Related: Lender hikes home loan rates] 

Credit union and bank to merge
Credit union and bank 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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