Following Wednesday’s (16 November) announcement that shareholders of both Heritage Bank and the People’s Choice Credit Union agreed to a ‘provisional yes’ to merge, assurance has been given to the value the third-party broker channel will play as the integration unfolds.
Heritage Bank head of broker experience, Paul Moses, said: “The broker channel remains an important part of our operations, and we will be working closely with our aggregator and broker partners as we progress with the merger integration.
“Today’s provisional results show a strong endorsement of the merger from the members of both Heritage and People’s Choice.
“This marks the start of an exciting journey together as a positive new force in the Australian banking sector.
“When the merger takes effect on 1 March 2023, it will be business as usual and there will be no substantial changes to the existing processes and services we provide to our broker partners.
“In the longer term, it’s expected that our products may change and that the new organisation will be able to offer our members more products and services.”
The affirmation comes after the shareholders collectively voted on the mutuals’ merger on Wednesday (16 November) after months of negotiation and industry speculation.
The provisional results from Wednesday’s (16 November) joint AGMs are currently being validated and confirmed with the results to be announced within the coming days, the lenders stated.
Together, this ‘blend’ of mutuals will create a national member-owned banking organisation with 720,000 members, 1,900 employees, $23 billion in assets, and 95 branches across South Australia, Victoria, NSW, Queensland and the Northern Territory, they explained.
The merged organisation will operate dual head offices in Adelaide and Toowoomba and both organisations have “committed to no non-executive redundancies” as a result of the merger.
There would be no closures of the existing branches as a result of the proposed merger, according to the lenders.
Combining the best of both organisations
Heritage chief executive, Peter Lock, said: “This is a milestone moment for the mutual banking sector and will provide existing and new members with a strong alternative to the big banks — an organisation with a national footprint that is owned by members and exists for the sole purpose of serving its members.
“Our organisations have a shared purpose — to help members reach their financial goals. This merger combines the best of both organisations, enabling us to build on our individual strengths while having greater size and scale to deliver more for members.”
People’s Choice CEO, Steve Laidlaw, said: “This is a very exciting step that will see us become Australia’s leading member-owned banking organisation. By combining our highly complementary businesses, we’ll deliver significant member benefits including enhanced products, services, digital capabilities and competitive pricing through a growing national footprint, while also increasing support for community and environmental initiatives.
“This is a big win for the mutual sector and significant for the broader banking industry as we’ll be able to provide a strong member-owned choice for consumers.”
Chairman of People’s Choice, Michael Cameron, said: “People’s Choice and Heritage are the perfect partners. Not only are we alike in size, but we also share very similar values, strategic aims and an absolute member focus. This is a true merger of equals. We are delighted that members saw the benefits of the merger and endorsed the proposal so strongly.”
Heritage chairman, Kerry Betros, added: “Together, we will be stronger, more secure and capable of providing more for our members. I look forward to working together as we integrate our two businesses through a shared purpose and commitment to mutuality.”
A ‘healthy alternative’ to the big four banks
Of the greater industry perspective, CEO of the Business Council of Co-operatives and Mutuals, Melina Morrison, commented: “The successful merger vote by the members of Heritage Bank and People’s Choice Credit Union cements a critical pillar of Australia’s financial industry.
“Their milestone decision creates one of the biggest member-owned banking [entities] in Australia, and ensures an ongoing and healthy alternative to the big four banks.
“Significantly, this demonstrates that scale and competitive advantage do not need to be pursued through demutualisation — a process that turns organisations into shareholder-owned, profit-driven institutions.
“Instead, banking can be provided to Australian customers in a way that ensures profits are returned to them in the form of better services.”
Steps to integration going forward
As explained via both entities with member approvals now secured, the organisations are awaiting final regulatory approval for the merger.
Work is now underway to prepare for the two organisations to come together as a single organisation from 1 March 2023, with “a focus on continuing to meet the needs of members”, they explained.