Community bank mergers get green light

·1-min read

Officials have approved two proposed customer-owned community bank mergers.

The first proposed merger is between Heritage Bank and People's Choice Credit Union, which if approved, will see the organisation grow to 720,000 members with $22.5 billion in total assets.

The second merger is between two Hunter Region-based organisations, the Greater Bank and Newcastle Permanent Building Society, which would have a combined customer base of 600,000.

Customers will now vote on the proposed mergers before they go ahead.

"The proposed mergers are expected to support competition and innovation in the banking sector by allowing these customer-owned banks to better compete with the larger players and deliver higher quality products and services to members," Treasurer Jim Chalmers said.

Dr Chalmers said Treasury's sign-off was based on advice provided by financial regulators.

The banks' mutual ownership structures will also remain in place after the mergers are complete.