BUNDABERG, Queensland, Australia–A bank here is attempting to takeover a credit union—and offering members approximately $7,800 each to sign off on the deal.
Auswide Bank is seeking to acquire Brisbane-based Your Credit Union in a $32-million deal. According to the Courier Mail, the credit union’s board has already approved the deal. It would be the first attempted takeover of what are known in Australia as customer-owned institutions by a shareholder-owned bank in 10 years, the Courier Mail reported.
But “buyouts of customer-owned institutions, called mutuals, can be hard because some customers are philosophically opposed to stock market-listed companies,” the Courier Mail noted.
The Customer Owned Banking Association, to which many Australian credit unions belong, issued a statement saying it was “disappointed at a proposal for a customer-owned banking institution to be taken over by a listed bank”.
“These takeovers are quite rare because the objectives of the two types of entities are so different,” COBA said.
Stephan Barnard, managing director of Your Credit Union, told the Courier Mail that this deal is different, because Auswide Bank and his credit union “had similar corporate and customer philosophies, including integrity…The culture and service standards at Auswide are second to none. (The deal is) about being relevant as a small fish in a big pond,” he was quoted as saying.
Your Credit Union has one branch and 4,094 members, many of whom are public servants and their families. It was formerly known as Queensland Professional Credit Union. The credit union has deposits of $164 million and a loan portfolio of about $124 million.
Auswide Bank’s managing director, Martin Barrett, told the Courier Mail the offer benefitted his bank’s shareholders by increasing the customer base in the strategically important southeast Queensland corner. YCU’s comparatively large deposit base and “quality” lending book was also important, he said.
To be approved, the deal requires support of 75% of voters at a meeting to be held in 2016. Your Credit Union members are being offered $4,055 in cash and 696 Auswide shares, which closed at $5.40 at press time.
No YCU board members would move to the bank as part of the deal, but they would receive “termination payments,” details of which have not yet been released.