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Mutual bank, credit union await Treasurer's approval to proceed with merger

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Heritage Bank is awaiting approval from the Treasurer to put its intended merger with People’s Choice to a vote.

Heritage Bank confirmed on Thursday another strong financial performance in 2021–22 has put it in a good position ahead of its planned merger with People’s Choice Credit Union.

Heritage recorded an after-tax profit of $40.6 million, down 9.5 per cent on the previous year’s record figure, however excluding merger planning costs the underlying after-tax profit stood at $42.7 million.

“We are well positioned financially ahead of our proposed merger,” said CEO Peter Lock.

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The bank confirmed in an emailed statement to InvestorDaily that the merger proposal is currently with Treasurer Jim Chalmers.

Confident that a tick of approval will soon be granted, Heritage plans to put it to a vote of members before the end of the year.

In its financial update on Thursday, Heritage Bank chairman Kerry Betros said the proposed merger had paved the way for “a bold new chapter” in the history of both the bank and the Australian financial sector.

“We believe the merger is an exciting opportunity for us to lead the creation of a new force for good in Australian banking, establishing a strong, national mutual that can stand as a true alternative to the major listed banks,” he said.

“It would be a true merger of equals, combining two proudly member-owned organisations with deep regional roots and a successful track record in member-owned banking.”

The proposed merger is expected to benefit the bank’s members, and provide the size and scale needed to ensure that it continues to remain competitive.

Heritage first announced its plans to merge with People’s choice last year, noting that the resulting bank would be one of the largest customer-owned banking organisations in the country with 720,000 members and total assets worth more than $22.5 billion.

If members vote in favour of the proposal, Heritage and People’s Choice expect the merged organisation would be established early next year.

It was earlier confirmed that as part of the merger, there will be no redundancies below executive level as well as no branch closures.

Mutual bank, credit union await Treasurer's approval to proceed with merger

Heritage Bank is awaiting approval from the Treasurer to put its intended merger with People’s Choice to a vote.

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Maja Garaca Djurdjevic

Maja Garaca Djurdjevic

Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.

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