Beyond Bank and P&N consider merging

Customer-owned banks Beyond Bank Australia (Beyond Bank) and Police & Nurses Limited (which operates as the P&N Group representing P&N Bank in Western Australia and bcu in NSW and South-East Queensland) have signed an MoU to explore an opportunity to merge.

The two banks will soon start a due diligence process to assess the benefits of a potential merger for the organisations’ collective 450,000 members.

If merged, the new entity would create one of Australia’s largest customer-owned banks, with total assets close to $20 billion.

According to the two lenders, a merged group would create a bank with “a vast metropolitan and regional footprint”, marrying Beyond Bank’s presence in South Australia, the ACT, Western Australia, NSW, and Victoria with P&N Bank’s strong position in Western Australia and BCU Bank’s continued growth across Northern NSW and South-East Queensland.

The two banks have affirmed that maintaining a strong branch network across the existing regions – and all employees being offered roles in the merged entity – would be key components of the proposed merger.

The proposed board composition of the merged entity would be made up of equal representation from the existing boards of Beyond Bank and Police & Nurses Limited (P&NL).

Gary Humphreys (P&NL) would be appointed as the inaugural chair, with Jake Bromwich (Beyond Bank) appointed as the inaugural CEO.

Should both boards agree to proceed with the merger following the due diligence process, members will be asked to vote on the proposed merger in 2025, pending regulatory reviews and approvals.

Members of both banks will be kept informed of progress and be provided with further information to support them in making an informed decision if the merger is brought to a vote, the two groups said.

Gary Humphreys, chair of P&N Limited, said: “With close alignment of culture and values, and a shared focus on member-first banking, we believe that our banks would make ideal merger partners.

“The opportunity to bring two financially strong and growing customer-owned banks together to create one of Australia’s leading member and community-focused entities is an exciting one for our employees and our members.

“Banking has changed significantly in the past decade. The industry is highly competitive, and given the critical investments required in digital banking, cyber security, technology, and regulation, to name just a few, achieving scale through mergers like this can help ensure that we remain competitive and sustainable.

“By combining our size and people capabilities to become a stronger organisation for all our members, our merged entity will be in a better position to continue to invest in delivering the highest value and service to our members of today and the future.”

Beyond Bank Australia chair Sam Andersen agreed, citing both a shared history and a future commitment to communities and sustainability as a solid foundation for a proposed merger.

She said: “Both banks have long and proud histories through their credit union origins, which are at the heart of our modern customer-owned banks. We both recognise, and are committed to, the value of co-operative purpose and principles that have helped us create a positive impact for our customers and communities over many years.

“We’re excited by the opportunity to jointly build on our shared commitments to people, customer-owners and communities through our core purpose of changing the lives of our customers through financial wellbeing.”

Andersen added that the lender would “continue to be a proud B Corp and pursue our goal of being the best relationship bank in Australia. A merger will enable us to create an even stronger, more sustainable bank that continues to thrive well into the future.”

Mutual mergers continue at pace

Customer-owned lenders have been merging in large numbers over the past few years, with P&N itself having merged with Bananacoast Community Credit Union (bcu) in 2019 and Beyond Bank having recently acquired First Choice Credit Union.

The new merger proposal is one of a spate of mutual bank mergers, which had been anticipated by the deputy chair of the Australian Prudential Regulation Authority (APRA), John Lonsdale, who warned in 2020 that it would be “prudent” for smaller banks – and particularly, mutuals – to “consider the preparatory steps required for a merger or transfer of business” should they face a severe financial stress.

Since then, a number of mutuals have merged, including:

• Greater Bank and Newcastle Permanent (now part of Newcastle Greater Mutual Group).
• G&C Mutual Bank (G&C) and Unity Bank (Unity).
• Heritage Bank and People’s Choice Credit Union (which is now known as People First Bank).
• Teachers Mutual Bank Limited (TMBL) and Pulse Credit Union Limited (PCUL).

Several others are also going through the process of merging, with Bank Australia and Qudos Bank having announced their intention to explore a merger in February of this year.

[Related: Beyond Bank and First Choice Credit Union announce intention to merge]