4 Australian mutuals become 2

As of today (Wednesday, 1 March), four mutual banks have consolidated into two new groups.

The NGM Group

Greater Bank and Newcastle Permanent have now officially merged to form Newcastle Greater Mutual Group Ltd (NGM Group).

The move was first announced in 2021 as mutual lenders looked to share the cost burden of digitsation and compete with scale.

After receiving relevant approvals last year, the two customer-owned lenders have now formed NGMGroup, headquartered in the Hunter Region with branches spanning the Illawarra to the Gold Coast and inland to NSW’s Central West.

The group will follow a multi-brand strategy, with both Greater Bank and Newcastle Permanent remaining as separate identities under the merged group.

The combined entity has total assets worth more than $20 billion and offers retail banking services to over half a million Australians, marking the largest capital base in the mutual sector worth $1.6 billion.

It is also believed to be the 10th largest Australian-owned bank for household deposits.

Group chief executive Bernadette Inglis said it was a “proud and momentous day”.

“Today marks a new chapter not only for two organisations with almost 200 years of collective history, but for mutual banking in Australia,” Ms Inglis said.

“The future is bright for customer-owned banking and given our financial strength, we are well-placed to lead the way in taking our way of banking to more Australians.”

Ms Inglis said the group decided that both brands’ history and performance scorecard meant they were each “too strong an asset to part with”.

“Growing our already strong brands is high on our agenda,” she said.

“We’ll position ourselves through new investments to better meet the increasingly challenging market and through continuing to evolve our already competitive customer experience, both digitally and physically through our branches.

“We’re now progressing a comprehensive multibrand strategy where we’ll consider how we can build on each brand’s individual strengths and consider where we can potentially expand into new markets.”

The group’s five priorities as it focuses on its new business include “building one team with a shared culture and values, continuing to grow our customer base, invest in our local communities, better enabling our people through technology, and maturing our operational, financial and risk resilience”.

Heritage and People’s Choice

Meanwhile, Queensland-based Heritage Bank and Adelaide-based People’s Choice Credit Union (People’s Choice) have also officially joined forces.

Also announced in 2021, the merged entity creates a national member-owned banking organisation with 720,000 members, 1,900 employees, $23 billion in assets, and 95 branches across South Australia, Victoria, NSW, Queensland, and the Northern Territory, they explained.

Chief executive Peter Lock, (former CEO of Heritage Bank) is now the merged organisation's CEO and Steve Laidlaw, formerly the CEO of People’s Choice, is now deputy CEO.

However, Mr Lock will retire 18 months after the establishment of the merged organisation, when Mr Laidlaw will be appointed as CEO.

Speaking on the announcement, Mr Lock said the merger was a "milestone moment" for the Australian banking sector.

“We’ve brought together two of Australia’s most successful customer-owned financial institutions to create a strong national mutual alternative to the big banks,” Mr Lock said.

The merged organisation will continue trading under the existing brand names of Heritage Bank and
People’s Choice for an interim period of approximately 12 months, before a "fresh brand name" will be reflected.

“Combining the best of both organisations enables us to build on our individual strengths while having greater size and scale to deliver more for members and communities,” Mr Lock added.

“That includes enhanced products, services, digital capabilities and competitive pricing, while also increasing support for community and environmental initiatives.”

The merged organisation will operate dual head offices in Adelaide and Toowoomba and both organisations have “committed to no non-executive redundancies” as a result of the merger.

The group previously said there would be no closures of the existing branches as a result of the proposed merger, according to the lenders.

Andy Weir enters as CIO, after holding the same position at People’s Choice, where he was tasked with merging the two banking systems and teams.

In December 2020, the mutuals sector was warned by APRA that it may need to prepare for mergers, should banks face severe financial stress. Since that time, several mutual lenders have consolidated or merged forces to stay competitive and share cost efficiencies.

[Related: Heritage People Choice merger finally gets results]