The boards of Companion, Hunter United and Phoenix, three Hunter Valley based credit unions, said yesterday they agreed to pursue an amalgamation. The expanded credit union would have 17 branches from Newcastle to Gunnedah, with assets under management of $460 million servicing 26,000 members.Companion Credit Union chairman Michael O'Connor said he expected the merged entity to reduce the expense to asset ratio of less than three per cent, have a capital base of around $42 million, and earn a pre-tax profit of $2.8 million in the 2008 financial year.The boards of the three credit unions said while one aim is cost savings by reducing duplication, they agreed that there will be no redundancies, at least in respect of staff employed in the direct service of members."We want to remain Hunter based with local decision making capability, and while we will always be a niche player, we think the larger scale will be required going forward," O'Connor said.Members of the credit union will have an opportunity to vote on the proposed amalgamation later in 2007.Companion CU was originally founded in 1974 as the Northern Mineworkers Credit Union, with Hunter United formed in 1963 by employees of BHP Newcastle, and Stewart & Lloyds employees formed Phoenix CU in 1969.New England Credit Union and Banana Coast Credit Union, which also service the northern tablelands and north coast of New South Wales, have already agreed to merge. That entity will be the eighth largest in the sector when they formally combine next year.The combined Banana Coast and New England will have $1.6 billion in assets; have around 110,000 members, employ about 400 staff, and market its services through 40 branches.