The sudden consolidation of the top-end of the mutual bank sector could finally create a genuine challenge to major and regional banks by creating new, national brands that brokers around the country will recognise and pitch to customers as community-minded alternative lenders.

That’s the thinking of Peter Lock, CEO of Heritage Bank, which is preparing to merge with People’s Choice, should members of both banks approve the deal in votes expected around April next year. There has been heightened focus on the mutual bank sector over the past six weeks, with Newcastle Permanent and Greater Bank also discussing a tie-up last month, after CUA rebranded as Great Southern Bank in May.