Fellow NSW-based member-owned banks Teachers Mutual Bank (TMB) and Australian Mutual Bank (AMB) have confirmed they are in formal talks to merge.
The pair have signed a Memorandum of Understanding (MoU) to explore the viability of a merger, which would nudge the collective into the fourth biggest mutual in Australia by total assets ($13.4 billion) and customer base (more than 300,000 members), after People First Bank, NGM Group, and Great Southern Bank.
The pair have set their merger target completion date for 2026.
The MoU proposes an integrated board to govern the merged entity, with the current TMB Limited chief executive Anthony Hughes to continue as CEO of the new company, while TMBL chair, currently Maree O’Halloran, will also continue on as chair.
Current CEO of AMB, Mark Worthington, would provide support in the initial months post-merger, with his post-merger moves uncertain.
The Sydney-headquartered TMB, with its origins servicing workers in Australia’s education sector, is by far the more senior of the pair, boasting total assets of $11.6 billion, total deposits of $9.1 billion, a loan book of $9.5 billion, and more than 230,000 members.
TMB posted after tax profits of $24.5 million in FY24, down 12.9 per cent on the previous year.
AMB, also based in Sydney, reports total assets of $1.8 billion, deposits of $1.5 billion, a loan book of $1.3 billion, and 75,000 members.
The bank, a B-Corp institution, reported a $10 million profit this year, up 10 per cent from FY23.
TMB said the merger would “provide immediate benefit and opportunity for better member outcomes”.
“Combining the financial strength of both banks increases scale and provides a platform for strong investment in enhanced products and services, modern technology, cybersecurity and fraud/scam prevention, and digital banking services.”
Technology costs are a major impost for all mutual banks, with TMB committing $18.7 million for tech expenses in the last financial year, while AMB spent $5.4 million, according to figures from KPMG – equivalent to around 10 per cent of the banks’ annual revenue.
For TMB chief Hughes, the pair will also benefit from shared “strong foundations and an ongoing commitment to member-owned banking”.
“We have a shared excellence in delivering great service for our members, and supporting the vocations and communities that support us.
“Combining our financial strength, together with the common technology platforms, will allow us to more quickly invest and deliver the services that matter to our members.”
AMB chief Worthington added: “As member-owned banks, we are committed to our members and communities. Our driving purpose is to provide ethical and valuable banking services to our members.
“A vision of the merged bank is to offer rewarding careers for our 750 employees. As a merged entity, we would also remain committed towards championing sustainability and retaining our B Corporation Certification.”
