Union will create one of Australia’s largest customer-owned banks
A proposal to merge Beyond Bank Australia and Police & Nurses Limited, which includes P&N Bank and BCU Bank, will maintain the banks’ already strong broker relationships and provide benefits for the channel, say the third party heads of both organisations.
Beyond Bank and P&N Group, announced on Wednesday (June 5) of their intention to explore a merger. The newly merged organisation would create one of Australia’s largest customer-owned banks with a combined 450,000 members and total assets of nearly $20 billion.
The banks have built up close partnerships with mortgage brokers, which have become increasingly important in terms of home loan growth.
“Both banks have a long and successful history of working with the broker sector and we are really looking forward to that continuing should the merger proceed,” said Beyond Bank head of third party and lending solutions Darren McLeod (pictured below left).
“We expect only positive benefits for the broker relationships we hold.
“Yes, this merger will bring size and scale but it's not about the size and scale - it's about the benefits we can offer our customers and community, which includes the broker community.
“The nature and scope of the [lending] products that might be developed that's still to be determined but what's certain is that we will have a bigger engine to be able to do that.”
Beyond Bank has about 5,500 accredited brokers across seven aggregator lender panels.
McLeod said the merger would improve Beyond Bank's reach into Western Australia, traditionally a stronghold for P&N Bank, and correspondingly P&N Bank would have greater access to South Australia, where Beyond Bank is based.
“More brokers will be able to access us and we'll have more products as well. When you combine the two organisations together you deliver an ability to invest and the goal there is to deliver the highest possible value for our customers, including brokers who are very important to both businesses,” said McLeod.
P&N Group general manager broker Kaine Adamson (pictured below right) echoed McLeod’s comments. He said the banks were well established within their respective broker markets.
“A strong customer-owned banking sector is great for competition, brokers and their clients,” Adamson said.
“The merger investigation and process will be lengthy and, for the foreseeable future, it will be business as usual.”
The proposed Beyond Bank/P&N Bank merger is part of a trend of customer-owned bank mergers in the last few years, with Greater Bank and Newcastle Permanent merging last year to form the NGM Group, while Heritage Banks and People’s Choice also merged in 2023, now rebranded as People First Bank.
Bank Australia and Qudos Bank also announced in February that they intend to merge.
Merger benefits
In a media statement on the Beyond Bank website, the banks said now that a memorandum of understanding had been signed, a detailed due diligence process would begin soon to assess the benefits of a potential merger.
If both boards agree to proceed, members of both banks will be asked to vote on the proposed merger in 2025 once all the regulatory reviews and approvals are complete.
The organisations said Beyond Bank Australia’s strength across South Australia, the ACT, Western Australia, NSW South and Victoria, combined with P&N Bank’s market-leading position in Western Australia and BCU Bank’s continued growth across northern NSW and South East Queensland, would “create a vast metropolitan and regional footprint”.
The banks confirmed that they would maintain a strong branch network across the existing regions.
“All employees being offered roles in the merged entity are key components of the proposed merger,” the banks stated.
P&N Bank’s reasons for pursuing merger
In a statement on its website, P&N Bank said following its successful merger with BCU Bank in 2019, it had continued to search for “another like-minded customer-owned bank to merge with to future proof our organisation in this highly competitive Australian banking landscape”.
“We have recently signed a memorandum of understanding with Beyond Bank Australia (BBA), a large and trusted customer-owned bank very much like us in terms of customer-centricity and focus on community, and with a very aligned culture,” P&N Bank said.
An extensive P&N Bank and BCU Bank member communication program throughout 2024/25 would outline the benefits to members including greater investment in products and customer services as well as an expanded geographic footprint and community presence.
Police & Nurses Limited chair Gary Humphreys (pictured top left) said with close alignment of culture and values, and a shared focus on member-first banking, “we believe that our banks would make ideal merger partners”.
“The opportunity to bring two financially strong and growing customer-owned banks together to create one of Australia’s leading member and community-focused entities is an exciting one for our employees and our members,” said Humphreys.
He said banking had changed significantly in the past decade.
“The industry is highly competitive, and given the critical investments required in digital banking, cyber security, technology, and regulation, to name just a few, achieving scale through mergers like this can help ensure that we remain competitive and sustainable.”
Humphreys said combining the size and people capabilities of Beyond Bank and P&N Group would generate a stronger organisation for all members.
“Our merged entity will be in a better position to continue to invest in delivering the highest value and service to our members of today and the future,” he said.
Beyond Bank’s reasons for pursuing merger
Chair of Beyond Bank Australia, Sam Andersen (pictured top right) concurred with Humphreys. She said a shared history and a future commitment to communities and sustainability was a solid foundation for a proposed merger.
“Both banks have long and proud histories through their credit union origins, which are at the heart of our modern customer-owned banks,” Andersen said.
“We both recognise, and are committed to, the value of cooperative purpose and principles that have helped us create a positive impact for our customers and communities over many years.”
The banks were excited by the opportunity to jointly build on shared commitments to people, customer-owners and communities “through our core purpose of changing the lives of our customers through financial wellbeing”.
Andersen said Beyond Bank would proudly continue as a B Corp and pursue its goal of being the best relationship bank in Australia.
“A merger will enable us to create an even stronger, more sustainable bank that continues to thrive well into the future.”
The proposed composition of the merged entity’s board would include equal representation from the existing boards of Beyond Bank and Police & Nurses Limited.
Humphreys would be appointed as the inaugural chair with Jake Bromwich (Beyond Bank) appointed the inaugural CEO.
What do you think of the proposed merger of Beyond Bank and P&N Bank (and BCU Bank)? Share your comments below
