In another push for scale in the medium-sized banking arena, Heritage Bank and People’s Choice Credit Union have entered into a non-binding agreement to explore a merger.

The two customer-owned entities announced the possibility of a transaction today, noting that if the merger were to proceed it would result in Australia’s largest customer-owned banking organisation, with approximately 700,000 members and $22 billion in total assets.

In a joint announcement, the two companies said the proposed merger had a strong strategic rationale given the complementary capabilities and geographic footprint of both parties.

“By joining forces, the merged entity would be of a size and scale that would enable both organisations to deliver more for their members through enhanced products, services, digital capabilities and competitive pricing,” it said.

“The combined entity would retain a mutual status with a committed member focus. It would operate a national network of more than 90 branches and employ approximately 1,700 people. There would be no branch closures or non-executive redundancies as a result of the proposed merger.”

Commenting on the proposal, People’s Choice chair, Michael Cameron, said: “Heritage and People’s Choice have been in discussions for several months. We recognise that we are both strong businesses, with approximately the same number of members, employees and assets so if a merger proceeds it would be a true merger of equals”.

Heritage chair Kerry Betros said: “Our members’ interests will be the most important consideration in any decision to merge and they will have the final say in any potential merger”.

The Heritage/People’s Choice merger talks follow an announcement earlier this month by fellow mutuals Newcastle Permanent and Greater Bank on their intention to pursue a potential merger.