SA credit union merger to take on big banks

Adelaide-based People’s Choice Credit Union and Queensland’s Heritage Bank will merge to become the first “truly national mutual bank in the country”, with a combined $23 billion of assets.

Nov 17, 2022, updated Nov 18, 2022
People's Choice Credit Union CEO Steve Laidlaw (left) and chairman Michael Cameron. Image: Tom Aldahn/InDaily

People's Choice Credit Union CEO Steve Laidlaw (left) and chairman Michael Cameron. Image: Tom Aldahn/InDaily

Members of both financial groups this week voted to support a merger bringing together 720,000 members and 95 branches across Australia.

People’s Choice chief executive officer Steve Laidlaw said 93 per cent of members supported merging with Toowoomba-based Heritage Bank, with the union set for March 1, 2023.

Laidlaw said a new brand and name reflecting the two organisations’ history would be chosen, and there would be no branch closures or redundancies below executive level for what will become 1900 employees nationally.

“It makes us the largest mutual bank in the country with $23 billion in assets … in terms of other banks someone like CBA (CommBank) will still be 40 to 50 times bigger than we are but bigger isn’t always better,” he said.

“The key thing is we are member owned.

“The banking royal commission showed the root of the problems affecting organisations are linked to the focus on shareholder returns.”

Being customer owned removed that conflict, according to Laidlaw.

People’s Choice current chairman Michael Cameron is destined to become chairman of the newly merged financial institution while Heritage chairman Kerry Betros is to be deputy chairman.

Current Heritage chief executive officer Peter Lock will become CEO, with Laidlaw deputy CEO but intending to move into the top role when Lock retires in 18 months.

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Merger plans involve maintaining head offices in Adelaide and Toowoomba, with executives spread between them to oversee branches in South Australia, Queensland, Victoria, New South Wales and the Northern Territory.

“We have aspirations to move into Western Australia and Tasmania in the future,” Laidlaw said.

Heritage chief executive officer Peter Lock described the merger as “a milestone moment for the mutual banking sector”.

“(This) will provide existing and new members with a strong alternative to the big banks – an organisation with a national footprint that is owned by members and exists for the sole purpose of serving its members,” he said.

“Our organisations have a shared purpose – to help members reach their financial goals. This merger combines the best of both organisations, enabling us to build on our individual strengths while having greater size and scale to deliver more for members.”

Laidlaw expected the merger would deliver member benefits including enhanced products, services, digital capabilities and competitive pricing through a growing national footprint, while also increasing support for community and environmental initiatives.

People’s Choice is already Australia’s largest credit union with 390,000 members, almost 900 employees, $10.3 billion in total assets, and 33 branches and advice centres in South Australia, Victoria and Northern Territory.

Heritage is one of Australia’s oldest and largest customer-owned banks with 330,000 members, 900 employees, $12.2 billion in total assets, and 62 branches and mini branches in Queensland and New South Wales.

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