One of Western Australia’s last local credit unions, Unicredit, is moving to merge with Sydney-based Teachers Mutual Bank this year, joining a long-term trend towards scale in the lending industry.
One of Western Australia’s last local credit unions, Unicredit, is moving to merge with Sydney-based Teachers Mutual Bank this year, joining a long term-trend towards scale in the lending industry.
The two organisations have signed a memorandum of understanding and will now undertake due diligence.
Representatives from the companies said that despite the move to up-size, the similarities of their offerings would enable them to continue to provide a niche service to the education sector in a competitive climate.
“(With) the massive growth in the importance of technology (and) the environment that everyone’s been operating in for several years now, the low interest environment, (we’re) talking about the need for some combination of niche and scale," he said.
Unicredit’s tertiary education offering complemented Teachers Mutual, which had an interest in primary and secondary education, Mr Ford said.
“This is an opportunity for us,” he said.
“We were very anxious to preserve our commitment to the education sector.”
Teachers Mutual chief executive Steve James said his organisation had also been focused on technology.
“Our members now really thrive on remote access services,” he said, citing mobile banking applications as a growth market,’’ he said.
“It would be great to be able to combine some of our resources to be able to do some of these things for our members.”
Teachers Mutual is a national organisation with more than 160,000 members drawn from the education sector.
It isn’t the first move towards scale among the state’s credit unions.
The move follows that of United Community, a credit union that became an arm of Community CPS in 2008.
Community CPS later became Beyond Bank Australia, a mutual bank.
Another WA player, Goldfields Credit Union, listed on the ASX to become Goldfields Money in 2012.
In contrast, Police and Nurses Bank has opted to expand membership but retained its WA home.
If the merger is approved by APRA and Unicredit’s membership base, the new firm will be 13th on Business News’s list of bank and non-bank lenders.
The combined business would have 11,500 customers in WA.