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On 18 March, APRA gave the green light for Qudos Bank and Bank Australia to merge. This follows the signing of a memorandum of understanding in February 2024.
Towards the end of last year, Qudos Bank CEO Brendan Wright said each lender would retain its identity post-merger.
However, once again speaking to Broker Daily, the CEO now said there won’t be two brands and a single merged entity is the goal.
“It’ll become obvious that it’s not good use of member money running two brands. It’s duplication. So, we need to be very responsible about using members’ money. So, the merged entity will do work over a couple of years about what is the brand strategy for the merged entity. Do the research and then get member feedback on it,” Wright said.
Despite this, there won’t be changes from day one as Wright recognised members need time to adjust.
Whether or not the merged entity will happen is up to the votes of the members. The lenders will now provide members with voting materials, including a member information booklet that sets out details of the proposed merger and the benefits to members. Voting is expected to close by mid-April.
Wright is confident the decision will pass as a larger, single company will allow for pooling of resources, greater scale, and better support and outcomes for members.
Brokers are instrumental in the change, as the banks are treating them as members by listening and consulting with the channel throughout the process of the merger.
“[We’ve been] helping [brokers] understand what’s in it for them and what it means for them in using our products and continue to use our products and services into the future,” Wright said.
“They’ve been critical and they’ve been engaged and supportive of where we’re heading, because what it means is continued competitive products for them to deliver to their customers.”
Digital transformation is one of the major goals of the merger. As recently discussed by Broker Daily, APRA has taken aim at mutual banks due to an apparent inability to manage risks in the modern banking space.
Tech is a shortfall of these lenders, said the regulatory body, and it encouraged more customer-owned banks to merge to allow for greater protections for consumers.
“The expectation of our members and customers are exactly the same as what you know, people expect of the bigger banks,” said Wright.
“For example, how the app works, the digital solutions, internet banking and so on, that’s also on our mind as well to enable us to be competitive in that regard to our members over the long run. So, it’s about protecting their money, but it’s also about the service we provide to help our members do what they need to get done around financial services.”
The merger will be a “merger of equals” and each bank will get five directors to sit on the board.
[Related: Regulatory approval granted to Bank Australia-Qudos Bank merger]
