Australia's Merger Mania Pays Off with an Exception

SYDNEY, Australia – Thirty years ago there were 777 credit unions in Australia. Today there are only 163, but despite the reduced number of credit unions the movement is doing anything but shrinking. Although some of the credit unions were just too small to continue, there is another reason for the fewer number of credit unions. Over the past three decades an almost merger mania has swept the country. One in five Australians belongs to a credit union. Forty-seven new credit unions were created from mergers between 2000 and 2004 alone with another nine mergers so far this year. A tenth is expected this October when Community CSP South Australia merges with CPS Australian Capital Territory. The vote is expected to be positive when it is held on October 1, according to Peter Hansen, Credit Union Services Corporation of Australia, Ltd. (CUSCAL) spokesman. Community CPS South Australia is already Canberra’s biggest credit union. The merger, if approved, will make the new organization, one of the largest in Australia with 140,000 members, 400 employees and assets of AUS$1.4 (US$1) billion. The new name would be Community CPS Australia. The two credit unions have worked closely for years. Although Australian credit unions do not have to maintain a common bond, both credit unions service public employees. CPS South Australia was recently named Australia’s Best Credit Union in Money Magazine’s Best of the Best Awards. Five board members from each board will be on the new board. No major staff changes are planned. Expansion of services is expected to continue. Australian credit union mergers have been marked by very few disagreements from both credit unions with the advantages of scale and expanded services being seen by the members who vote on a merger. However a takeover of the Capricornia Credit Union (CCU) of Rockhampton Queensland by the Mackay Permanent Building Society (MPBS) of Mackay Queensland is being fought by the credit union. In June 2004 MPBS approached CCU, whose directors said no to the idea of a takeover. MPBS then wanted to contact CCU’s 13,000 members directly. When CCU again said no to supplying their member list, MPBS went to the Australian Securities and Investment Commission (ASIC) who gave them right of access. CCU on June 19, 2005 filed an appeal with the Administrative Appeals Tribunal (AAT). No date has been reported for an answer. CUSCAL will support them through the appeal process, saying that no business should have to hand their customer list to a competitor. Total assets for Australian credit unions at the end of 2004 were AUS$31 (US$21) billion. Down under credit unions repeatedly beat out banks in terms of customer satisfaction and service in any survey conducted on the subject. Unlike in the United States, Australian credit unions do pay taxes. When asked if any credit union merger had been a failure, CUSCAL Spokesman, Peter Hansen responded with a firm “No!” – [email protected]