The merging of two Hunter-based organisations, Newcastle Permanent and Greater Bank, is expected to create a sustainable regional financial powerhouse.
It comes as the board of directors from both institutes unanimously endorsed the proposal to merge this week, recommending their respective members vote in favour of joining the iconic mutuals.
After announcing a Memorandum of Understanding (MoU) last August to explore merging, Newcastle Permanent chair Jeff Eather and his Greater Bank counterpart Wayne Russell formalised the boards’ support by signing a Merger Implementation Agreement (MIA).
The proposal will now be submitted to the Australian Prudential Regulation Authority for review, before being put to members of both organisations at meetings likely to take place later this year.
Mr Eather said the merger would ensure long-term sustainability, without compromising either’s values.
“This is a highly compelling opportunity to grow and compete on our terms,” he stated.
“Importantly, we remain fiercely committed to being customer-owned and continuing to invest profits for the benefit of our customers and the communities we serve.
“Combined, Newcastle Permanent and Greater Bank have $19.8 billion in total assets and a customer base of approximately 600,000 and, in merging, will create one of Australia’s largest customer-owned financial institutions.
“That puts us in an incredible position to be a real challenger and remain a significant competitor in the banking sector.”
Under the proposal endorsed by the respective boards, the merged organisation would:
- Become one of Australia’s leading customer-owned financial institutions;
- Keep both iconic brands – Greater Bank and Newcastle Permanent;
- Serve a combined customer base of almost 600,000;
- Bring together both organisations’ workforces with no forced redundancies as a result of the merger for at least two years;
- Maintain the Hunter-based customer contact centres and headquarters; and
- Retain the current number of combined branches for at least two years.
Mr Russell said the merger was in the best interests of their respective member bases.
“The due diligence process has confirmed our initial view that this is the right time to bring together our two organisations, which in their own right offer exceptional financial strength built on years of solid performance,” he explained.
“Combining our resources and financial strengths provides an unparalleled opportunity to grow and innovate, to deliver even better value for Newcastle Permanent and Greater Bank customers.
“This has been, and remains, the foundation for entering into such an arrangement.
“Merging will also enable us to keep pace with increasing regulation and reporting, and the rapid advancements in banking technology, both of which require significant investment.”
Consolidation within the Australian banking industry over the past decade has seen the number of mutuals almost halved.
Today there are fewer than 70, as other smaller financial institutions have united to remain competitive and sustainable.
Members’ eligibility to vote on the merger proposal is determined in accordance with each organisation’s constitution and is the same criteria used to determine voting eligibility at an annual general meeting.
Further information is available on the Newcastle Permanent and Greater Bank websites.
If the merger proceeds, it is proposed Mr Russell will chair the merged entity and Mr Eather will assume the role of deputy chair.
Newcastle Permanent CEO Bernadette Inglis will be chief executive officer and Scott Morgan, currently Greater Bank CEO, would be the entity’s deputy CEO.
Get all the latest Newcastle news, sport, entertainment, lifestyle, competitions and more delivered straight to your inbox with the Newcastle Weekly Daily Newsletter. Sign up here.
