Bank Australia eyes growth with AUB buy

Currently, AUL is expected to continue supporting AUB until the transfer is complete.

Bank Australia (BAL) is set to strengthen its scale and stability with the planned acquisition of Australian Unity’s (AUL) banking arm, Australian Unity Bank (AUB), according to S&P Global Ratings.

The transaction, announced by AUL on November 6, 2024, is expected to finalize in late 2025, pending regulatory approval.

BAL is also planning a merger with Qudos Mutual Ltd. If both deals proceed, BAL's balance sheet would position it amongst Australia’s three largest mutual lenders.

AUL's decision to divest AUB aligns with a broader trend toward consolidation in the mutual banking sector, which analysts have identified as beneficial for operational efficiency and stability.

Currently, AUL is expected to continue supporting AUB until the transfer is complete. Both BAL and AUB primarily engage in residential mortgage lending, and BAL is projected to maintain a robust risk-adjusted capital ratio exceeding 15% following the acquisition.

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