A non-major bank has unveiled plans for another merger following on from its August announcement – two examples of a larger trend the CEO expects to continue playing out in in the mutual sector.
Teachers Mutual Bank Limited and Victoria-based Pulse Credit Union Limited have signed a Memorandum of Understanding and are now working towards joining forces, starting with due-diligence before looking to secure regulatory approval from APRA and the approval of Pulse Credit Union Limited’s membership.
According to Pulse CEO Stuart Neave, the tumult of the last 12 months – digital disruption, reduced margins, increased regulatory change and COVID-19 – led the group's board to seek out opportunities to scale to ensure it was able to continue supporting its members; Teachers Mutual was the natural fit, with both groups providing essential workers with a high calibre of service.
“We have chosen Teachers Mutual Bank Limited as our preferred partner as we are united by our support for the healthcare and education industries, our dedication to members and strong values,” Neave said.
“We believe the proposed merger with one of the largest mutual banks in Australia will provide a greater opportunity to enhance member value through improved product and service offerings.”
Teachers Mutual CEO Steve James spoke to the larger-scale context for how the arrangement came to be.
“The disruptive economic conditions of 2020 demonstrated why size and scale matters in the mutual sector. In order to remain competitive and provide members with outstanding value, we must continue to invest in technology and in our people,” he said.
“The proposed merger with Pulse Credit Union Limited creates an opportunity for us to grow further and provide exceptional service and value to additional loyal mutual banking members based in Victoria.”
As James sees it, the industry can expect to see further consolidation in the mutual sector.
“The mutual industry was formed to look after the members, and if we are able to help more Australian essential workers through mergers, we are open to these discussions,” he said.
The Teachers Mutual Bank Limited board will remain unchanged.
