Mutual banks Beyond and Police & Nurses to work towards merger

Beyond Bank Australia, P&N Bank and BCU Bank are set to be combined under a plan unveiled as “a merger of equals”.

Two of Australia’s largest customer-owned banks are exploring a merger that will create an entity with 450,000 customers across five states and about $17bn in assets under management.

Beyond Bank Australia and Police & Nurses Limited, which operates P&N Bank and BCU Bank, have signed a memorandum of understanding to investigate a “merger of equals” ahead of a planned member vote in 2025.

Adelaide-based Beyond Bank was ranked as Australia’s sixth-largest mutual bank by a KPMG report last year, while Perth-based P&N was ranked seventh. BCU Bank, formerly northern NSW and Queensland’s Bananacoast Community Credit Union, merged with P&N in 2019.

Mergers among mutual banks have been a long-running trend in the nation’s finance sector as these former credit unions seek scale to remain competitive. Fellow top 10 mutual banks Bank Australia and Qudos Bank also plan to merge in 2025.

Beyond Bank chief executive officer Jake Bromwich will be appointed inaugural CEO of the merged entity while Police & Nurses Limited chair Gary Humphreys will be the inaugural chair.

All of Beyond Bank’s 750 staff and Police & Nurses Limited’s 650 employees will be offered roles in the enlarged bank, its branch network will remain, and a new name is yet to be decided.

Gary Humphreys, chair of Police & Nurses Limited

Jake Bromwich, CEO of Beyond Bank Australia

Mr Bromwich said the goal was to complete the merger by mid-2025 and it would deliver members and customers a national footprint.

He said there had been a positive response from staff about Wednesday’s announcement, and while Beyond Bank was not in discussions about any other mergers, further industry consolidation was expected.

“The ever-increasing costs do mean you need to keep growing to support the costs through inflation and other investments you need,” he said.

“The funding costs for a bank of our size versus a big four bank are higher and it is important for us in the mutual banking sector to find avenues and ways to bring that differential to a level playing field.

“We are very competitive, and as a mutual bank we have the benefit of being here for our members, and our customers are our owners, so we are not chasing a dividend return. We’re after getting the right returns to invest back in the business for our members.”

Mr Humphreys said both merger partners were “financially strong and growing” and had a close alignment of culture and values.

“Banking has changed significantly in the past decade,” he said.

“The industry is highly competitive, and given the critical investments required in digital banking, cyber security, technology, and regulation, to name just a few, achieving scale through mergers like this can help ensure that we remain competitive and sustainable.”

Originally published as Mutual banks Beyond and Police & Nurses to work towards merger