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Proposed Merger with IMB - FAQs

 

 

 

Who is IMB Bank?

IMB Ltd commenced trading as the Illawarra Mutual Building Society Ltd in 1880. Originally established in the Illawarra, IMB extended its branch network to the South Coast of New South Wales, the Southern Highlands and in the 1990s opened branches in the ACT and Sydney. It now has 48 branches in Sydney, the ACT, Illawarra and South Coast and a branch in Victoria. In 2018, IMB Bank expanded its team of mobile lenders and established lending operations in the Hunter region and on the NSW central coast.

IMB provides its members with access to a range of retail and business banking products supported by a growing branch and ATM network, a Wollongong-based contact centre, and broad range of online and mobile services including internet banking, a mobile app, real-time payments 24/7 through Osko® and the full suite of digital wallets including Apple Pay, Google Pay and Samsung Pay.

IMB changed its name from Illawarra Mutual Building Society Ltd to IMB Ltd in 2001 and in 2015, following approval from APRA to use the term ‘bank’, adopted the business name IMB Bank. As at the proposed merger date, it is anticipated that IMB Bank will have over $6 billion in assets, 198,000 members, and over 600 employees.

Like Hunter United, the Illawarra-based IMB has its history forged in steel. Together, we want to be the leading customer owned financial institution in NSW.

 

Why do we need to merge?

Although Hunter United is currently well positioned, competition in banking and financial services is intensifying, margins are compressed, and operating costs, including those required to respond to regulatory change, are increasing. The recommendations of the Royal Commission into Banking, and other regulatory requirements create significant resource burdens on smaller mutuals and the Board of Hunter United does not see the regulatory landscape becoming any less onerous in the future. Also, the Board sees the cost of expanding product offerings, along with continuous improvements in security, fraud prevention and staff training, makes it increasingly difficult for small mutuals like Hunter United to meet customer expectations going forward.

Put simply, we need to keep growing so that we can continue to offer our current and future members competitive products, services and rates through convenient and modern banking channels.

The Board believes that merging with a strong and secure, like-minded organisation, is a better option than attempting to face these challenges as a standalone entity. By merging with IMB Bank, Hunter United will be in the best position to provide high quality, personal service to members, to protect the customer-owned way of banking and to offer the evolving range of products and services members will need and want over the longer term.

 

What's in it for members?

As part of its consideration of the proposed merger, the Hunter United Board has had a strong focus on ensuring that members as a whole would be better off following the merger. The Board has also sought to ensure that the value represented by Hunter United to a merger party (including the capital, assets under management, established member base and experienced workforce) is appropriately recognised.

The merger is designed to give members a wide range of benefits that include:

  • preservation of our customer-owned way of banking;
  • an expanded range of products and services;
  • call centre and webchat support with extended service hours including Saturdays;
  • access to more branches;
  • improved pricing on home loans, personal loans and term deposits;
  • updated technology including mobile payments, and
  • the removal of most transaction fees and monthly account keeping fees.

Please click here for more information on the list of benefits for members.

 

What will happen to Hunter United staff?

There will be no job losses for our wonderful staff as a result of this merger and their entitlements will be preserved.

There will be no forced redundancies. All of Hunter United’s staff will be offered employment by IMB Bank in reasonably commensurate roles, and will retain as a minimum, their existing remuneration and leave entitlements. The Board believes that Hunter United staff will have improved career and development opportunities as part of the larger merged organisation.

 

Will the Hunter United brand stay the same?

The brand of Hunter United will be retained in the Hunter region for the foreseeable future in a manner that demonstrates the coming together of the two organisations – for example ‘Hunter United together with IMB Bank’.

 

Will Hunter United still be customer owned?

Yes, IMB is regulated by the Australian Prudential Regulation Authority and is a member of the Customer Owned Banking Association, an independent organisation representing mutual banks, building societies and credit unions.

 

Who is the larger organisation in this transaction?

As at the proposed merger date, it is anticipated that Hunter United will have over $335 million in assets, around 9,000 members, and 35 employees.

IMB Bank will have over $6 billion in assets, 198,000 members, and over 600 employees. The proposed merger with IMB Bank enables Hunter United to join with a large, leading mutual ADI, and by leveraging the combined strength of both organisations, to create sustainable value and benefits for members long into the future.

 

What happens to my share?

After the merger, each member of Hunter United, except its Directors, will cease to be a member of Hunter United and their member share in Hunter United will be cancelled. For those members who paid a subscription price for their member share, the paid up value of their share will be repaid. This amount will be paid within five (5) business days of the merger completion date.

 

Will Hunter United continue to contribute to the community?

Both Hunter United and IMB Bank identify strongly with their respective member bases and are actively involved in providing support to local communities. This includes long term sponsorship arrangements and support for local clubs, groups and charitable organisations.

IMB Bank operates the IMB Bank Community Foundation, which is in its 20th year of operation and has supported over 700 community based projects with $10 million dollars in funding. Following the merger, Hunter United employees will have the opportunity to identify and encourage applications for IMB Bank Community Foundation funding from projects addressing worthy community causes in the Hunter Region.

 

What will happen to the Hunter United Board?

One (1) Hunter United Director will join the IMB Bank Board, taking the number of directors of the Board of IMB Bank after the merger to eight (8). This arrangement ensures there will be continuity post-merger and provides the opportunity for a former Hunter United Board member to contribute to the governance of the merged entity. Under the IMB Bank Constitution, the former Hunter United director who joins the Board of the merged entity must retire at the start of the second annual general meeting of members that occurs after the merger completes. The former Hunter United director may choose to stand for re-election by members at that meeting in accordance with the provisions of IMB’s Constitution and Board governance policies.

 

Won't control move to the Illawarra over time?

We would expect to continue to grow the employment opportunities for both Illawarra and the Hunter whilst also expanding our presence within NSW to service members and their communities.

 

Will the cost of services be increased?

The purpose of the merger is to drive economies of scale that will ultimately benefit our members. There may be minor differences in the pricing arrangements of individual products and services, but the overarching aim is to ensure that members as a whole, are better off overall. Refer to the list of benefits for members here.

 

What was the Due Diligence process all about?

Both organisations had the opportunity to conduct a review of each other's business, to understand the operations and identify any risks, synergies and opportunities.

After the positive Due Diligence process, the Hunter United Board endorsed the findings and support moving to the next stage in the merger process, which is to seek member approval of the merger.

 

So, what are the next steps?

You, our members, are always our most important priority and we look forward to answering your questions at any time during this merger process.

The proposed merger between IMB and Hunter United has the unanimous support of both Board of Directors and has been approved by the Australian Prudential Regulatory Authority (APRA) and other regulators.

All Hunter United members are encouraged to exercise their right to vote on this important proposal. Hunter United members will receive a voting pack in February via post. This pack will include a Member Information Document, which will outline everything you need to know about the proposed merger and instructions on how to vote in person at the Special General Meeting (SGM) to be held on 5 March 2020 or via the completion and return of a proxy voting form. The Special General Meeting will be held at 130 Lambton Road Broadmeadow.

 

When will members have the chance to vote?

All Hunter United members are encouraged to exercise their right to vote on this important proposal. Hunter United members will receive a voting pack in February via post. This pack will include a Member Information Document, which will outline everything you need to know about the proposed merger and instructions on how to vote in person at the Special General Meeting (SGM) to be held on 5 March 2020 or via the completion and return of a proxy voting form. The Special General Meeting will be held at 130 Lambton Road Broadmeadow.

 

As the merger process takes place, will I be able to continue operating my accounts the same way?

Yes. Your banking relationship and banking with Hunter United will not change.

From the transfer date, all existing Hunter United branches and IMB Bank branches will continue to operate and provide the same levels of service to members as they do today. Until all banking systems are integrated (which is expected to occur within 6-9 months after the merger is completed), Hunter United members will continue to bank as they do prior to the merger. When systems integration is complete, members of Hunter United will be able to access all IMB bank channels including branches and online services for a wider array of products from IMB.”

 

After the merger will I still keep my Hunter United membership number?

Members will continue to use their existing member number to access Hunter United member facing systems/ internet banking etc. on the merger date.

If it became apparent in the future that adjustments to any Hunter United membership numbers are required upon full system integration (approximately 6-9 months after the merger date), members will be advised well ahead of time and every effort will be made to minimise the extent of any change and inconvenience.

 

After the merger will I still use my Hunter United Credit Card?

Members can continue to use their current Hunter Credit Cards on the merger date. IMB Bank has a longstanding relationship with Citibank which provides IMB Bank’s Mastercard Credit Card products under the IMB brand. Those cards have a range of features and benefits, (such as a rewards programs, insurance for purchases and fraud cover) that may be attractive to Hunter United cardholders. IMB Bank is currently exploring the range of options it is able to make available to Hunter United Credit Card holders after the merger date (including equivalent Citibank products) and will communicate to members well ahead of any changes or alternative options that are made available to members.

 

After the merger will I still use my Hunter United Visa Debit Card?

IMB is exploring options to retain the Hunter United Visa Debit Card. Should this not be achievable upon full system integration (which will be approximately 6-9 months after the merger date), IMB Visa Debit Cards will be issued to replace the Hunter United Visa Debit Card. If this is required, IMB will do this in a way that minimises inconvenience to Hunter United members. The IMB Visa Debit Cards can also be used for all mobile payment wallets (i.e. Apple, Google, Samsung, Fitbit & Garmin).

 

What about the Government Guarantee, if I have funds with both organisations?

If the merger is approved, Hunter United and IMB would operate as one Authorised Deposit Taking Institution (ADI) and therefore the Government Guarantee covering up to $250,000 per customer per ADI would apply to the total amount of funds held with the combined ADI (Hunter United & IMB).

 

What if the merger does not proceed?

If the merger proposal does not proceed, the operations of Hunter United will continue (at least in the short term) on the basis that they do today. However Hunter United’s Board expects competition in banking and financial services to further intensify, margins to continue to be compressed, and operating costs, including those required to respond to regulatory change, are likely to increase in the immediate future, potentially threatening the long-term viability of Hunter United.

As outlined in the Members Information Document, your Board believes the proposed merger with IMB Bank will provide a range of benefits to members and is in the best interests of members and the organisation as a whole.

 

Where can I get more information?

As soon as we have additional information, we will share it with you. In the meantime, should you have any questions or concerns you can email us at enquiry@hunterunited.com.au, call us on 1300 10 10 63 or visit one of our branches.

 

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