Heritage Bank, People’s Choice Credit Union complete due diligence for $23 billion merger

A proposed $23 billion merger between Toowoomba-based Heritage Bank and credit union People’s Choice is set to proceed, subject to two conditions.

A proposed $23 billion merger between two of the country’s largest customer-owned banking organisations has cleared a major hurdle, with members expected to vote on the plan by the end of the year.

Toowoomba-based Heritage Bank and South Australian credit union People’s Choice announced in August last year plans of the potential merger, which would create Australia’s ninth largest bank of about 720,000 members, 90 branches and close to 1800 employees.

Heritage CEO Peter Lock said a due diligence process had been undertaken which found the financial strength of both organisations would provide significant benefits to both parties and their members.

“There was nothing in the current operations that, when combined, would create a concern for either board in making a recommendation on the merger to members,” Mr Lock said.

“Both are really well run, have similar balance sheets and is a great opportunity to create the ninth largest bank in Australia which would always have its origins in Toowoomba.”

Mr Lock said there were no redundancies below the executive level planned as part of the merger, as well as no branch closures, with the two banks to retain head offices in Toowoomba and Adelaide as part of a dual head office strategy.

The merger still faces regulatory and member approval, with a vote expected to take place at both organisations’ AGMs scheduled for the later part of 2022.

Subject to members voting in approval, the merged organisation could be established as soon as early 2023.

The process also saw Heritage and People’s Choice come to an agreement on a governance structure, which would see current Heritage chairman Kerry Betros appointed deputy chair, with current People’s Choice chairman Michael Cameron take on the role as chairman of the combined entity.

As part of the proposed leadership structure, Mr Lock would be appointed as CEO of the merged organisation for 18 months before retiring.

“I have had my contract extended a couple of times, but when I was asked to lead the new merged organisation I was delighted to do that as part of a succession plan,” he said.

Originally published as Heritage Bank, People’s Choice Credit Union complete due diligence for $23 billion merger