Police & Nurses Limited (PNL) has rejected a proposed merger with fellow mutual Beyond Bank.

The withdrawal follows the completion of due diligence, with the PNL board concluding that the merger “would not be in the best interests of its members”, the bank said in a statement.

Whilst expressing the board’s disappointment, PNL chair Gary Humphreys stressed that the bank had “made the right decision” in not proceeding with the merger, noting its due diligence process remains “robust”.

PNL, which is headquartered in WA but maintains a strong presence in NSW and SE Queensland through its BCU arm, added that it is “operationally strong and secure in its current state”; however, size and scale remain important given the ongoing investments required in areas such as cyber security, fraud and financial crime”.

“We will therefore continue to pursue our strategic agenda to grow organically and through mergers while always acting in the best interests of our members.”

Commenting on the failed merger proposal, Beyond Bank, whilst noting it was bound by confidentiality obligations, said that it “remains a strong prosperous bank with an exciting strategy for the future”.

The mutual banks in June this year announced they had engaged in formal merger talks, with the prospect of creating one of Australia’s largest mutual banks, rivalling the recently merged mutuals Heritage and People’s Choice (rebranded People First Bank) and Newcastle Permanent and Greater Bank (now NGM Group).