Teachers Mutual Bank and Unicredit to merge

Teachers Mutual Bank plans to retain the Unicredit brand if a proposed merger between the two mutuals goes ahead.

TMB and Unicredit, which is based in Western Australia, announced yesterday that they had signed a memorandum of understanding to develop a merger proposal, which will require the approval of Unicredit's members.

TMB, which has more than 160,000 members and A$4.7 billion of assets, is a bonded credit union serving the education sector, with its base in New South Wales.

Unicredit, which has 7500 members and $200 million of assets, has an open bond but specialises in the tertiary education sector.

TMB chief executive Steve James said the businesses were complementary. Teachers has had an office in Western Australia since 2008 and has 4000 members in the state.

James said: "We have a strong commitment to the Western Australian market. We want to be the mutual bank for all educators in Australia."

He said the parties wanted to retain both brands, although Unicredit would have to make some modification to its name if it becomes part of a mutual bank.

Unicredit chairman, Bill Ford, said in a statement that the group carried out a strategic review last year which "recognised the challenges associated with being a small financial institution in the current environment and focused on ensuring a continuing successful and sustainable future for our members."

James said that, in addition to the burden of tighter regulation that has fallen on all authorised deposit-taking institutions since the financial crisis, small institutions were finding it difficult to fund the technology investment required to meet customer expectations for multi-platform banking services.

TMB's last merger was with TAFE Credit Union about ten years ago.