P&N Bank pulls pin on Beyond Bank tie-up

The proposed merger – expected to be led by former RAMS chief Jake Bromwich – is dead in the water.

Beyond Bank chief executive Jake Bromwich. Picture: Kelly Barnes

The proposed merger between P&N Bank and Beyond Bank is dead in the water, with the former announcing it would not go ahead after completing due diligence.

Beyond’s chief executive officer, Jake Bromwich, headed up Westpac’s RAMS home loans outfit until 2023 when he was stood down. Westpac has since said ASIC and APRA are investigating RAMS for alleged fraud and other criminal activities.

Mr Bromwich was due to be CEO of the merged business had the merger proceeded.

Westpac closed off RAMS to new business earlier this year. A Morgan Stanley-led sale process was also abandoned in April.

It was also revealed earlier this month Westpac’s head of audit Samantha Aitken was suing her employer, alleging she faced bullying and stigmatisation as a result of blowing the whistle internally on the issues within the RAMS arm.

Ms Aitken alleged she was branded a “troublemaker” for pointing out fraudulent activities in the home loans business including the falsifying of documents.

The merger between the Perth-based Police & Nurses Limited (PNL) and Adelaide’s Beyond was first touted in June, promising to create one of the nation’s largest customer-owned banking institutions with close to $20bn in assets.

PNL chair Gary Humphreys said: “While it’s disappointing that we will not be progressing this opportunity, our due diligence process was robust and I am confident that we have made the right decision.”

At the time of the potential merger’s announcement, Mr Humphreys pointed to a “close alignment of culture and values” as a compelling reason for the merger.

Analysts from ratings agency S&P said the cancelled merger wouldn’t impact either operation’s credit profile and there remains “a compelling rationale for the further consolidation of the mutual banking sector”.

“While the two mutual lenders will forgo the potential benefits of greater scale and efficiencies a merger would bring, the stand-alone credit fundamentals of each entity remain broadly in line with most Australian mutual bank peers,” the S&P note read.