RACQ eyes bank sale months after $855m insurance exit

RACQ entered the banking market through its acquisition of a Queensland-based mutual business. Picture: Steve Pohlner

The Royal Automobile Club of Queensland is understood to be weighing a sale of its bank months after offloading its insurance business for $855m to IAG.

RACQ entered the banking market through acquisition of a Queensland-based mutual business. It merged in 2016 with QT Mutual Bank, an authorised deposit-taking institution, to provide Queenslanders with a new member-owned banking option.

Its net tangible assets are about $300m.

The business reinvests profits into the lender for members and offers services in online banking, home loans and savings.

The Australian reported around the time of the merger that RACQ had ambitions to go ­nationwide in a world-first for an auto club as part of a five-year strategy to dull the impact of disruption facing its traditional business lines.

National expansion was required to gain scale in the mutual ADI sector that was made up of about 100 mutual banks, credit unions and building societies.

However, combined they are still smaller than a regional bank and former chief executive of RACQ Ian Gillespie told The Australian at the time RACQ was offering a pathway to consolidation.

According to IBISWorld, cred­it unions and building societies in Australia generate about $1.6bn of annual revenue combined and about $146.8m of net profit, but the industry is under pressure from mounting competition and challenging trading conditions.

Australian government incentives, like the First Home Guarantee, have bolstered demand for credit unions and building soci­eties, and this has benefited the institutions by expanding member interest in more personalised loan services. Technology upgrades also lift performance.

Great Southern Bank has a 48 per cent market share.

RACQ has more than 1.7 million members and generates most of its income from products like membership benefits and discounts, roadside assistance and banking. In 2024 the company generated total revenue of $2.4bn including sales and other revenue and had 2712 employees.