Teachers Mutual Bank has completed their merger with Pulse Credit Union, adding 6,000 members to their numbers.
The merger, which had been in the offing for nearly a year, represents the latest in the trend of consolidations within the customer-owned banking space.
Teachers has already merged with Firefighters Mutual in the last few years, while Newcastle Permanent and Greater Bank are undergoing a merger, as are People’s Choice and Heritage Bank.
According Teachers Mutual head of industry partnerships Jim O’Connell, such mergers are only good for the third party channel and customers that choose to use a mortgage broker.
“I think it’ll be good for the third party channel,” he said. “It’s very much part of our strategy at Teachers, and the national broker partners act as our extended sales force, particularly in areas where we don’t have representation.”
“That’s been great, and the existing 6,000 Pulse members coming across will be very happy to be able to utilise the broker network.”
“We have over 3,000 brokers now across Australia and it’s going to help anyone in the health sector to be able to use the broker market. We know that’s over 50% of consumers, so we see that as a big positive going forward.”
According to O’Connell, the mergers in the customer-owned sector are a response a range of drivers, from government regulations to the need for better tech.
“You’ll find that the smaller mutuals have had a fair few challenges in regards to reducing margins and regulatory change that is happening, as well as the digital disruption that we’ve all seen,” he said.
“The mutual industry in the last 6 or 7 years has seen more and more mergers, and I think it’s all about trying to make sure that you can service the membership, usually in our industrial base.”
“We’re in education, emergency services and the health sector, and Pulse were in with the health and university employees, which works very well with TMB’s brand. The mix between the membership is very strong.”
“It’s taken about 9 months – these things take time with the regulatory side – but we were happy to complete the merger.”
“Traditionally, the mutual sector was made up of a number of players within the one sector. They’re now deciding to come together, because if they can put their energy together, they can do more for their members.”
“Scale plays an important part of that. I don’t think we want to get to be in the space of the Big Four, but in our key markets, it’s important to have the scale to be able to reinvest our profits back into looking after the members as we move forward. That’s what we’re concentrated on.”
