Australian Mutual Bank and Community First Credit Union in merger talks

  • By Zilla Efrat

Australian Mutual Bank (AMB) and Community First Credit Union (CFCU) have signed a memorandum of understanding to explore a potential merger under the AMB brand.

Both are very similar member and customer-owned banks operating predominantly in the greater Sydney region of New South Wales. The histories of each institution include multiple mergers and over 60 years of unwavering focus on the communities they serve.

In a statement, they say a merger allows them to create a more significant Sydney-centric customer-owned bank more quickly than either institution could achieve alone.

Even more significantly, the merged bank will be able to release benefits to members by removing duplicated products and suppliers, as well as the accelerated introduction of new products and services. Each institution highly regards these additional benefits.

The new and expanded mutual bank will be capable of delivering greater benefits to members such as an optimised store network, enhanced products and services and greater investment in things that help bring greater value and convenience to your banking.

With AMB having $1.8 billion in assets and CFCU $1.3 billion in assets, the potential merger will create a new entity with significantly more resources and with greater profitability and asset growth opportunities than either institution can create by itself in the short term.

CFCU can leverage AMB’s Environmental, Social, and Governance (ESG) credentials and AMB can share the benefit of CFCU’s growing green loan portfolio and award-winning credit cards.

The merger is subject to due diligence, regulatory and member approvals, and therefore if approved, is not expected to proceed until early 2024.

If the merger doesn’t proceed, AMB and CFCU will continue to serve the needs of existing members and pursue separate strategies for future growth.

There will be no forced redundancies as a result of the merger. Consultation will occur with all staff and positions comparative in nature will apply in the new organisation.

Mark Worthington, AMB’s current CEO will become CEO of the merged entity from the time the transfer of business comes into effect. The CEO of CFCU, John Tancevski, will become a fixed-term consultant to the merged entity and assist in the merger process subject to the terms of his contract of employment.

The board of the newly merged entity will be comprised of four representatives from AMB and four representatives from CFCU. This board configuration will enable both businesses to maintain stability and continuity throughout the process.

The current chair of CFCU, Stephen Nugent, will become chair of the merged entity.