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People’s Choice Credit Union acquired TIO Bank following a competitive tender process conducted by the Northern Territory government.
The acquisition includes TIO Bank’s loan portfolio, worth approximately $570 million, and deposits of $124 million.
The acquisition will take People’s Choice Credit Union’s total assets under management and advice to more than $8.5 billion.
People’s Choice managing director Peter Evers said the transaction demonstrated the potential for growth for the mutual sector.
“The major banks have enjoyed a significant boost to their competitive position since the global financial crisis, thanks to government-supported legislation and regulatory bias,” Mr Evers said.
“As a leader in the mutual sector, we believe we have a responsibility to look for opportunities to redress that imbalance, both for the benefit of our members and for consumers in general, to ensure we continue to offer a genuine alternative to the big four banks,” he said.
“This acquisition of TIO Bank proves there are opportunities for the mutual sector to grow due to our strong value proposition. The expansion reflects People’s Choice’s commitment to the growth of our business and the future prosperity of the NT.”
The acquisition will see approximately 8,000 TIO Bank customers transfer to People’s Choice, which has four branches in the Northern Territory in close proximity to TIO Bank branches.
“Through this important acquisition, we will be able to further reinforce our commitment to provide the Northern Territory with an alternative to the big banks, offering customers access to a wider range of products and services,” Mr Evers said.
The TIO Bank brand will be phased out in the transition to People’s Choice. People’s Choice will provide comparable offers of employment to all TIO Bank staff in early December. Staff will maintain continuity of service and retain all benefits with the new employer.
Mr Evers said the TIO Bank transaction represented another important step in the organisation’s long-term growth strategy.
“We have always been a growth-orientated business and we see no reason to change,” concluded Mr Evers.
The transaction will be completed on Friday 2 January 2015.