Queensland mutuals RACQ Group and QT Mutual Bank have announced plans to merge, with QT Mutual to become a banking subsidiary within RACQ.RACG Group provides motoring and related services and insurance to 1.5 million members.QT Mutual has 60,000 members and A$1.4 billion of assets.RACQ made a net profit of $50 million last year and QT Mutual made a profit of $6.7 million.RACQ Group chief executive Ian Gillespie and QT Mutual Bank CEO Steve Targett said in a joint media release that the merger would create a banking platform with an opportunity to achieve significant growth."RACQ wants to diversify into banking, while QT Mutual Bank wants scale and investment in technology to achieve growth. Together we can achieve things for our members that we can't do on our own," the release said.The merger, which requires regulatory approval, is expected to be completed by the third quarter this year.QT Mutual needs a vote of at least 25 per cent of its members, with 75 per cent of those members in favour, to get the deal over the line.The merged group would have 1.6 million members and $3.9 billion of assets.QT Mutual has 14 branches (ten in Brisbane) and RACQ has 100 outlets.Targett would remain CEO of the bank and report to the RACQ Group CEO.When Targett took over as CEO at QT Mutual in 2013 he said credit unions and building societies that had upgraded to mutual bank licences had yet to get a financial return on their investment. He said mutuals were no different from other financial institutions in needing to grow. "It is a numbers game. Year on year your cost base goes up and it is a low-growth environment," he said.Gillespie said RACQ was on the lookout for more mergers in the financial services sector.