RACQ to merge with Queensland Teachers' Mutual Bank
to take on the big four
by Mark Ludlow
Updated Apr 18 2016 at 3:28 PM
Queensland's peak motoring club, RACQ, is planning
a merger with the Queensland Teachers' Mutual Bank which they hope will allow
the customer-owned company to eventually take on the big four banks.
In an Australian first, the motoring body will move
to offer home loans to its 1.6 million members, alongside its insurance, travel
and lifestyle products.
The merger with QT Mutual Bank, which has to be
approved by 75 per cent of its members in July, will create a merged entity
with assets worth $3.9 billion.
RACQ chief executive Ian Gillespie said while the
big banks were copping a hiding in the public and a potential royal commission
into the sector looming, he believed RACQ's strong reputation would help them
drive into the banking market.
"That [the royal commission] is a matter for
government to decide, but clearly there are issues out there that the community
is concerned about," Mr Gillespie said in Brisbane on Monday.
"There's always a risk of getting tarred with
the same brush but we believe we can get around that by making sure we
highlight that we are different."
Mr Gillespie said he hoped the body would absorb
other building societies over the next few years to take on the establishment
in the financial services sector.
"Our strong brand, our extensive distribution
network and our unrivalled access to Queensland households provides the perfect
platform from which to build a large-scale, customer-owned, real alternative to
traditional banks," he said.
"Queenslanders like to do things a bit
differently and this is a game changer for those looking to unshackle
themselves from the big banks. Our business model is quite different. We're
focused on delivering value to members, not maximising profits. We won't have
the shareholder imperative that other banks have.
"Over time we hope to attract other large
mutuals to come together with us to ultimately challenge the big four
banks."
Aim to break dominance of big banks
Under the proposed move, QT Mutual will be merged
into the RACQ, keeping its name initially before being taken over by the
well-established RACQ brand.
It wants to break the dominance of the big four
banks who control about 78 per cent of the market.
RACQ currently offers a range of person loans but
it will move into full-scale personal banking, including mortgages, credit
cards and financial advice to its 1.6 million members.
But the merged company will shy away from the
riskier commercial lending.
QT Mutual Bank chief executive Steve Targett said
the mutual currently offered one of the best variable home loan rates in the
country, at about 0.25 per cent to 0.3 per cent cheaper than the big banks. He
said it would become more competitive once the merger was complete.
He said the bank's balance sheet was in good
health, with a BBB+ rating from Standard & Poor's, but an expansion would help
the company survive in the current market.
"This is a far better option than an in-sector
merger with another bank or credit union," Mr Targett said.
"We're well capitalised but our ability to
invest adequately to get up our platforms up to the required standard,
particularly in areas such as digital, are limited. The RACQ merger gives us
that ability to grow and [provide] a much better offer for our members."
QT Mutual, which has been in operation since
1965, is hoping to leverage off RACQ's large reach throughout regional
Queensland via its 100 branches and its digital platforms.
But Mr Targett is going to need to convince at
least 12,000 of its 60,000 members to sign up to the merger with
RACQ.
RACQ had been looking for a merger for the past
four or five years, after feedback from members supported a move further
into financial services, but only entered formal negotiations with QT
Mutual Bank in November last year.
The QT Mutual Bank board and directors will remain in place, to be
joined by some RACQ members including Mr Gillespie. There will be no forced
redundancies from RACQ's 2000 staff and 1500 contractors or from QT
Mutual Bank's 200 staff under the proposed merger.
No comments:
Post a Comment