Merger Related FAQs
Merger Related FAQs - Intech Credit Union
|Members' biggest questions regarding the merger answered.|
|Why is now the right time to merge?|
|These are challenging times for smaller mutuals like Intech. The very low interest rate environment has reduced margins to the extent that organic growth will not enable us to gain sufficient scale to provide the products, services and technology our members require and deserve. |
Given the Capital Adequacy and Net Interest Margin pressures we face, your Board has given a great deal of thought over the past year to how we can best serve our members; to continue to provide you with highly competitive products, great service and up-to-date technology in a mutual environment where your interests are not conflicted with those of shareholders.
Your Board has considered various alternate strategies and has formed a view that merging with an appropriate larger mutual will enable us to ensure our members continue to receive highly competitive products and a first-rate service offering.
Under any agreed merger we will retain a separate brand identity and our focus on IBM, Telstra and the wider ICT sector.
Why merge with Bank Australia?
|Bank Australia is a 100% customer owned responsible bank, employing around 370 staff at 24 locations (we have 29 staff at three locations).|
Bank Australia provide banking services to over 127,000 customers (we have 9,200 members) with total assets exceeding $4bn (we have assets of $320m) and net assets of $435 million (we have $21m).
Your board considers them to be one of the most financially robust mutual banks in Australia with a strong alignment to Intech’s target market.
Their origins go back to the CSIRO with roots in the S.T.E.M. (Science, Technology, Engineering and Maths) sectors. They have good scale, a real clarity of purpose and a strong target market which has led to exceptional growth. CANSTAR selected Bank Australia as the 2016 Customer Owned Bank of the year due to the overall value offered by their product suite.
We have received independent expert due diligence reports covering legal and operational matters and are satisfied that there is nothing preventing a merger or any issues which will put member deposits at risk following the merger.
What are the main advantages of the merger?
|We believe that this merger provides both members and staff with significant benefits. |
The combined entity will have greater scale, strength and expertise to compete with a broader range of more competitive products and services and better customer facing technology.
We believe that it will also provide enhanced job security and career opportunities for staff.
Both Bank Australia and Intech use the same banking IT platform, making the integration of the businesses simpler and more cost effective, minimising the changes to the user experience for members and staff.
Intech’s Chief Executive, Robert King, will remain as Chief Executive of the re-branded Intech Bank and one of Intech’s directors will join Bank Australia’s Board. This will ensure that Intech has a strong voice going forward. For these reasons your board unanimously recommends that members vote in favour of the merger.
What will happen to Intech’s staff?
|All Intech staff will become Bank Australia’s employees and will retain their employment conditions along with leave and superannuation entitlements.|
All staff have also received an employment guarantee for 12 months from the merger date. Following the merger the two businesses will be brought together from an operational perspective and this will provide clarity regarding the ongoing roles for all staff.
What happens to my ‘ownership’ of Intech?
|As a member of Intech you are also a part owner. If the merger is approved, our members will then become part owners of Bank Australia. Whilst primarily theoretical - as neither Intech nor Bank Australia has any plans to demutualise - the value of each member’s share in Intech’s capital was approximately $2,300 at 30 June 2016 whilst the value of each member’s share in Bank Australia’s capital was approximately $3,400.|
As a bank, will Intech require different licensing?
|Without getting too technical, we are an Authorised Deposit Taking Institution (ADI) and gain this authorisation from APRA and the Reserve Bank of Australia. There is a very high standard to achieve this. Some ADIs are called Banks, some are called Mutual Banks, Credit Unions, and Building Societies, whilst some call themselves Credit Cooperatives - but we are all ADIs.|
The merger will not have any material effect on licencing or basic banking operations like funds transfers.
Which ATM network can we use fee free?
|Both Intech and Bank Australia provide free access to the rediTeller ATM network.|
How do we vote on the merger?
|As a valued member of Intech, your vote is important. A 75% majority is required to pass the resolution to merge with Bank Australia.|
Members can vote on the merger at the upcoming AGM, or via a Proxy Form.