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Illawarra Credit Union and Community First Bank have announced that their respective board of directors has agreed on a merger.
The merger of the two organisations now awaits formal approval from the Australian Prudential and Regulation Authority (APRA) after the “successful completion of a due diligence process”.
Following approval from APRA, bank members will vote on the merger set to take place in late 2024 at the annual general meetings of Community First and Illawarra Credit Union.
Should the merger occur, the new entity will have approximately 80,000 members and customers, with combined assets of around $2.5 billion, according to the banks.
CEO of Community First, John Tancevski, commented that the merger is “an exciting step for both Community First Bank and Illawarra Credit Union”.
“It will create valuable member benefits, allowing the two organisations to position themselves for their next phase of growth,” Tancevski said.
Illawarra Credit Union’s CEO Anthony Perkiss spoke on the two banks’ shared history and collaboration.
“Together we recognise the exciting synergies in combining our strengths into a single, larger community-focused financial institution where we can better meet the needs of all our members while retaining our high standards of service,” Perkiss said.
In a statement, the banks confirmed that the merger will see customers of both banks “benefit from access to enhanced technological capabilities and greater physical distribution”.
“It also gives our resources a boost, allowing us to better meet our ongoing prudential and regulatory obligations while increasing our focus on innovation, enhanced customer experiences and growth,” it said.
The banks have also stated that the merger will not result in “forced staff redundancies”.
This announcement comes as customer-owned banks Beyond Bank Australia and Police & Nurses Limited confirmed the signing of a memorandum of understanding to investigate a potential merger.
The two banks are set to begin a due diligence process in order to assess the potential benefits of a merger for the organisation’s 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.
The two banks 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).
[RELATED: Beyond Bank and P&N consider merging]
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