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Members of Greater Bank and Newcastle Permanent have voted in favour of merging the two lenders together to form the Newcastle Greater Mutual Group Ltd.
On Wednesday morning (2 November), members from both institutions gathered in Newcastle, NSW to vote on the proposal.
Provisional results showed that more than 75 per cent of the eligible Greater Bank members voted in favour of the bank merging with Newcastle Permanent, while 89 per cent of Newcastle Permanent members green-lit the deal.
The merger, which will come into effect from 1 March 2023 should it gain regulatory approvals from the prudential regulator, will create a combined entity with nearly $21 billion in total assets and approximately 600,000 customers.
It will make the new group one of the largest customer-owned banking groups in Australia. (However, should the Heritage Bank/People’s Choice merger be approved by members later this month, that group will also be of a similar size).
Both brands will be retained under the merged entity and there will be no change to customer bank accounts or banking details on merging.
The merged organisation, Newcastle Greater Mutual Group Ltd, will be led by Bernadette Inglis, chief executive of Newcastle Permanent, who will become group CEO while Wayne Russell, chair of Greater Bank, will assume the role of chair.
A board comprising four directors from each of the current Greater Bank and Newcastle Permanent boards will look after the group:
- Mr Russell — (chair) Greater Bank
- Jeffrey Eather — (deputy chair) Newcastle Permanent
- Jayne Drinkwater — Greater Bank
- Samantha Martin-Williams — Newcastle Permanent
- Ross Griffiths — Newcastle Permanent
- Nicola Page — Newcastle Permanent
- Catherine Robson — Greater Bank
- Donna-Maree Vinci — Greater Bank
Mr Russell commented: “Creating a financial powerhouse based here in the Hunter is an incredibly exciting prospect and I speak for both organisations when I say how proud we are that our members share our vision and voted a strong ‘yes’. Thank you to everyone who voted on the proposal.
“Bringing together our two brands under the one merged entity better positions us to compete with the major banks and deliver high value, competitive banking for our customers.
“Final validation of the votes is underway but we’re confident the provisional outcome will be confirmed, and the merger will proceed.”
Mr Eather, chair of Newcastle Permanent (and incoming deputy chair of Newcastle Greater Mutual Group), also thanked members for casting their votes “at this important moment in [the] organisation’s history”.
“The response has far exceeded our constitutional thresholds and we’re very encouraged by the provisional results,” Mr Eather said.
“Both Newcastle Permanent and Greater Bank have long championed customer-owned banking, and merging will enable us to secure its future here in regional NSW.
“The new organisation will have size and scale that we can leverage to grow our business over the longer term. We now have a strong springboard to take our way of banking to more Australians, while keeping skills and expertise, jobs and investment here.”
Speaking to Mortgage Business, Mr Eather added that while the two lenders will begin to work through strategy now that members have approved the deal, he said digitisation and growth will be a key focus.
“We believe there’s significant growth opportunities by coming together to significant growth opportunities by leveraging the amazing work that Greater Bank have been doing on their own internal digital transformation projects,” Mr Eather said.
“There are opportunities for us to expand geographically and take the goodwill that is already in both brands to a broader audience.
“So for us, when we sit down to now start to talk strategy, it’ll be looking at an amazing set of opportunities and prioritising those, to see what we actually do first and foremost.
“The challenges of merger integration are the same as for any businesses; creating one culture and a successful culture, using the best of both but creating something brand new for everybody.”
The merger was approved by Treasurer Jim Chalmers MP in September.