Recently the two boardrooms of Newcastle-based banks Greater Bank and Newcastle Permanent agreed to merge. 

In April the boards of Toowoomba-based Heritage Bank and Adelaide-based People's Choice also agreed to merge.

Over the past decade, the number of mutual and customer-owned banks has reportedly halved, with fewer than 70 existing today.

Samuel Philipos, director of mortgage brokers Benevolence Financial Group (BFG), explained why these mergers are happening.

"For customer owned banks such as Newcastle Permanent, Greater bank, Heritage and People's Choice, mergers are a strategic avenue for banks to drive growth and reduce costs through economies of scale," Mr Philipos told Savings.com.au.

In 2021 NAB also acquired neobank 86 400, and the retail arm of Citi Australia, while Bank of Queensland acquired ME Bank and Virgin Money.

That said, the United States' Citigroup is leaving 13 countries, not just Australia.

"Citibank's acquisition may have been as a result of a similar target demographic to NAB's target market. Similarly with BOQ acquiring ME Bank and Virgin Money, this is enabling BOQ to compete more effectively with the bigger players," Mr Philipos said.

10 Largest Customer-Owned Banks Australia

Here's how Greater Bank, Newcastle Permanent, Heritage Bank, and People's Choice Credit Union compare to other customer-owned banks in terms of customer assets on the books.

Institution Assets (billion)
Great Southern Bank (formerly CUA) $20.554
Heritage Bank $14.339
Newcastle Permanent $13.932
People's Choice $11.913
Bank Australia $10.997
Teachers Mutual $10.199
Greater Bank $10.193
Beyond Bank $9.627
IMB $8.708
P&N Bank $8.692

Source: Australian Prudential Regulation Authority, March 2022 ADI Statistics

These figures pale in comparison to the largest banks in Australia - for example, Commonwealth Bank holds more than $900 billion in assets on its books. 

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The table below displays a range of home loans for owner occupiers from customer-owned institutions.

Update resultsUpdate
Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
5.99% p.a.
6.01% p.a.
$2,396
Principal & Interest
Variable
$0
$210
70%
6.04% p.a.
6.08% p.a.
$2,408
Principal & Interest
Variable
$0
$595
80%
6.14% p.a.
6.19% p.a.
$2,434
Principal & Interest
Variable
$0
$595
70%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Image by Chelsea Pridham on Unsplash



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