Heritage Bank and People’s Choice Credit Union are dragging out their mooted merger, with a member vote slated for October.

The PCCU/Heritage merger will produce the largest mutual bank in Australia. Due diligence has been completed, the bank told members yesterday.

The merged mutual would have around 700,000 members and more than A$22 billion in total assets, and rank ahead of the Newcastle Permanent and Greater Bank tie-up (with no timeline for a member vote announced yet either).

Heritage recorded a net profit of $21.2 million in the six months to December 2021, 9 per cent lower than the same period in the previous year, “but still above budget,” the bank said in a media release outlining its half-year performance.

Heritage Bank’s half-year financial results “show a continuation of strong momentum in an extremely competitive environment, highlighted by a record volume of lending and total assets hitting $12 billion for the first time,” CEO Peter Lock said yesterday.

Loan approvals hit a record amount for a half-year period at $1.4 billion, up 22 per cent on the same period the previous year. Net loan growth for the period was $114 million, up 88 per cent on the corresponding period.

Total consolidated assets were $12.2 billion as at December 2021, up 2 per cent from the figure at 30 June. This is the first time in the bank’s 147-year history it has broken through the $12 billion milestone.

“Rising personnel costs were a major factor, with the market for quality staff highly competitive,” Lock said. 

“We also took the conscious decision to invest in key member-facing roles and critical support functions such as technology and risk.”

“We have also incurred a number of one-off costs in relation to our proposed merger with People’s Choice Credit Union,” he said.