Bank completes merger with credit union

Firefighters Mutual Bank, a division of Teachers Mutual Bank Ltd, has welcomed the new members after finalising the data transfer to formalise its merger with Firefighters Credit Co-operative Ltd.

All of the former Firefighters Credit Co-operative members are therefore now part of Firefighters Mutual Bank and have access to its range of products and services.

This includes a wider range than was available under the co-operative, including the ability to apply for fixed rate loans and credit cards, access to a mobile banking app, free and unlimited ATM withdrawals, and access to its new payments platform (NPP). 

The merger expands the bank’s presence in the Victorian emergency services sector.

Firefighters Mutual Bank general manager Jim O’Connell said: “When merger discussions began in 2020, it was clear that both mutuals had common values and a shared commitment to providing the best service to our members. These values have continued to be present throughout the merger process, as we have worked closely with the Firefighters Credit Co-operative team, despite logistical challenges and physical distance due to COVID-19 restrictions.

“We are delighted to welcome our new members to Firefighters Mutual Bank and look forward to continued growth as the key financial services provider for the national firefighter and emergency service worker community.” 

Steve James, the CEO of Teachers Mutual Bank Ltd, added: “As we expand our presence in Victoria, we look forward to ongoing investment in the state and welcoming new members to the Teachers Mutual Bank Ltd family.

“The completion of this merger promotes our growth trajectory and helps us on our mission: to deliver high-quality financial products and services to essential workers.”

Teachers Mutual Bank Ltd has also confirmed that it has now completed the due diligence for its proposed merger discussions with the Victorian-based Pulse Credit Union.

Both boards of directors have now provided approval for the merger process to proceed, with the deal now awaiting regulatory approval from APRA, before going to a vote by Pulse Credit Union’s membership.

More mergers in the mutual bank sector

The move is the latest in a string of acquisitions and mergers undertaken by TMBL in the recent past, which already comprises Teachers Mutual Bank, UniBank, Health Professionals Bank and Firefighters Mutual Bank.

The announcement comes following predictions that players in the mutual bank sector would need to consolidate to survive.

In a speech delivered to the Customer Owned Banking Association (COBA) 2020 Convention in December, the deputy chair of the Australian Prudential Regulation Authority (APRA), John Lonsdale, suggested that it would be “prudent” for smaller banks to “consider the preparatory steps required for a merger or transfer of business” should they face a severe financial stress.

In his speech, Mr Lonsdale outlined that 2020 had been “a very challenging year for everyone, confronting the Australian community with firstly a health crisis and then testing the financial system with a resulting economic crisis”. 

He warned that a large number of the small banks – and not only mutuals – have “business models that are challenged”, which could be exacerbated by the fact that consumers increasingly expect a strong digital banking offering (with relevant cyber security), which might be hard for cash-constrained mutuals to provide.

“Therefore, it is prudent that such ADIs consider the preparatory steps required for a merger or transfer of business, including criteria to identify potential partners at an early stage rather than wait for a deterioration in financial position,” he told the COBA conference.

“Hopefully, recovery plans never need to be enacted, but it is important for all APRA-regulated entities, even smaller ones, to ensure they have an effective plan in place if needed – and it is APRA’s role to supervise that.”

[Related: Mutuals may need to prepare for mergers: APRA]