Summerland Bank is in negotiations with the Regional Australia Bank to discuss a possible merger.

If successful, they will become one of the top ten largest customer owned banks in Australia.

John Williams, the CEO of Summerland Bank, is optimistic about the decision for a merger; it's part of their 10-year outlook.

“This came about from our strategic plan.” said Mr Williams, “We approached Regional Australia Bank to determine if they were interested in exploring the opportunities and benefits of a merger. We believe that it is in the best interest of our customers if we undertake a merger with the right partner.

“For decades we've had a relationship and interaction with Regional Australia Bank in sharing ideas and concepts, ultimately for the unified benefit of the communities and customers.”

David Heine is the CEO of the Regional Australia Bank. When he was approached by Summerland Bank, his reaction was positive, “I was very honoured. 

“We have watched the Summerland Bank team play a critical role within the Northern Rivers region for many years. They have provided us with a great example of how a regionally focused mutual bank can be relevant in today’s modern age. 

“Their support and care for their customers and the community is a clear contrast to the lip service that the major banks too often pay.”

Mr Williams says they know each other's organisations relatively well. The Regional Australia Bank is three times the size of Summerland Bank, so a merger would place them as about the 10th largest customer-owned bank in Australia, which gives customers scale, “And scale gives you pricing efficiency and efficiency in operation. 

“This is two strong, well respected, financial organisations coming together to create an even better proposition. It's not something that either of us have to do. It's something that both of us want to do.”

Both banks are customer-owned and have shared interests. Mr Williams says, “Culturally, we're very aligned in our proposition to customers, although we have slightly different focus areas.

“Regional Australia Bank has a very firm commitment to providing banking services to regional Australians, and so does Summerland. We both have a strong commitment to face-to-face banking and actually growing the branch network, as opposed to many other financial institutions, particularly the major banks, who are decreasing their branch network.

“Regional has a focus area around social, and we have a focus area around the environment. So we believe that there's, there's a lot of synergies, but then the differences are also powerful to bring together.”

This difference plays an important part in a highly sought-after B Corp certification affiliated with Summerland Bank. 

Mr Heine says, “B Corp certification is quite rightly difficult to obtain and tough to retain. While Regional Australia Bank has not yet achieved this status, we have always been aligned with the principles of B Corp. 

“The merger gives us the incentive to close out any remaining gaps so that we can preserve this hard-won certification.

“Summerland Banks B Corp status is certainly a feature that I know many of our members will highly value.”

Other benefits to customers include the extended (47) branch and ATM network, digital offerings and better technology around scams and prevention.

Mr Heine says, “Our members are looking forward to being able to access an extended network of branches and the professional, caring staff that are the core of Summerland Bank. The additional scale created by the merger will also help drive prices down and shorten the time required to deliver new and exciting products and services.”

There isn’t any overlap of branches, which Mr Williams sees as an important factor, “That means there is no need for any branch closures. And we've made a strong commitment to the staff of both organisations that there will also be no job losses.”

Mr Heine sees other benefits to Summerland customers, “Customers will see the same level of high-quality care and commitment built on a common set of values and a belief that regions such as the Northern Rivers deserve a bit of help and support. 

“When times get tough, the merged organisation will be able to bring even greater resources to the table to support customers in need. Customers will also see better pricing reflecting our increased scale and a product set that will benefit from faster innovation and investment.”

But you can’t have two CEO’s… Mr Williams has considered this and it was included in the offer, “David Heine would be the CEO of the merged organisation, and I will be Deputy CEO in charge of strategy. I'll still be based here in Lismore, and we will become a key regional office location.”

The head office of the Regional Australia Bank is in Armidale.  

Mr Heine is pleased to outline “One feature that I am sure that Summerland Bank customers will receive well is our Community Partnership Program. In 2024, Regional Australia Bank distributed over $2.8m to over 2,000 community organisations. 

“This annual program is tangible proof of our commitment to invest into our communities. I can’t wait to bring that support to the Northern Rivers region.”

The road ahead to a full merger will take well over a year. Mr Williams iterates, “It's not our decision to make; it's our customer's decision because we are customer-owned banks.”

The Memorandum of Understanding, or the intention to explore a merger, is the first step in a year of checks and balances before the vote will go to the customers. Risks, opportunities and benefits will be assessed by the banks themselves and third-party consultants to ensure due diligence is maintained.

“The two boards need to make a decision independently that the merger is in the best interest of customers,” says Mr Williams, “Once having made that determination, the decision goes to a vote of members of both organisations.”

That will take place at each bank's AGM, which is already set for November next year. 

“We know each other's organisation relatively well, so we're not anticipating any risks to materialise, but we need to go through the process and ensure that's the case for our customers.”

Then, a name and branding and all the aspects of rolling two companies into one can begin. 

“The proposed legal merger date will be 1 July 2026.” 

For now, it's business as usual.