Proposed deal would create one of Australia’s largest member-owned banks
Teachers Mutual Bank and Australian Mutual Bank have signed a memorandum of understanding (MOU) to explore a merger that could create one of Australia’s largest member-owned banks, with $13.4 billion in total assets and over 300,000 members.
The proposed merger aims to deliver enhanced member outcomes by combining the financial strength and operational scale of both organisations. The unified entity would invest in improved products and services, modern technology, cybersecurity, and digital banking enhancements.
Anthony Hughes (pictured above left), chief executive of Teachers Mutual Bank, said both banks share a strong commitment to member-owned banking.
“Combining our financial strength, together with the common technology platforms, will allow us to more quickly invest and deliver the services that matter to our members,” he said.
Mark Worthington (pictured above right), chief executive of Australian Mutual Bank, highlighted the banks’ shared purpose.
“As member-owned banks, we are committed to our members and communities,” he said. “A vision of the merged bank is to offer rewarding careers for our 750 employees and remain committed to sustainability, retaining our B Corporation Certification.”
Under the MOU, the merged entity’s board would integrate leadership from both banks. The chair of Teachers Mutual Bank would serve as chair of the new organisation, and Hughes would assume the role of CEO. Worthington would support the transition during the initial months post-merger.
The proposed merger remains subject to due diligence, regulatory approvals, and member consent. If approved, the merger is expected to be completed by 2026.
S&P Global Ratings said the merger could strengthen the combined entity’s business stability, while recognising potential integration risks.
“That said, TMBL and AMB share common technology platforms, which we think will alleviate some risk,” the credit rating agency said.
S&P expects the combined entity to maintain a very strong risk-adjusted capital ratio above 15%, in line with current mutual sector standards.
Both banks predominantly focus on residential mortgage lending, a common practice among Australia’s mutual lenders.
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