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Unicredit has signed a memorandum of understanding with Teachers Mutual Bank to work together on developing a mutually acceptable merger proposal, which requires the approval of Unicredit’s members.
The proposal is expected to be put to members in the first half of this year after due diligence and regulatory approval from APRA.
Unicredit chairman, Professor Bill Ford, said that the decision to seek a merger opportunity with a bigger financial institution had resulted from a strategic review of operations conducted last year.
“Our review recognised the challenges associated with being a small financial institution in the current environment and focused on ensuring a continuing successful and sustainable future for our members,” Professor Ford said.
“From our perspective, we saw Teachers Mutual Bank as a perfect fit, with its strong primary and secondary education focus complementing our tertiary and post-secondary focus,” he said.
“We believe this will bring important benefits for our members and provide a strong financial base for the future.”
Professor Ford said there was a strong commitment to retaining Unicredit’s distinctive role as a financial services provider to the WA university and broader tertiary education sector.
This would be reflected in a new name, required as a result of merging into a mutual bank.
Teachers Mutual Bank chief executive Steve James said the merger with Unicredit was a good opportunity that would broaden the organisation’s customer base, with the membership of the combined entity set to embrace all sectors of education.
“Although the two brands will continue to operate separately there are certain synergies and efficiencies which will ultimately bring more benefits to members,” Mr James said.
“Members of the combined financial institution will have the advantage of being part of a mutual bank that has an education sector focus unparalleled by any other bank in Australia.”
Founded in 1966, Teachers Mutual Bank has more than 162,000 members and assets of $4.5 billion.
It provides banking services to the education sector and their families across Australia, and its WA office has been established since 2008.