P&N Bank pulls billion-dollar merger with Beyond Bank after questions raised about Beyond boss

P&N Bank has pulled a proposed billion-dollar merger with Beyond Bank after questions were raised over Beyond chief executive Jake Bromwich’s previous job at Westpac. Mr Bromwich had been anointed to lead the combined group, which would have created a national member-owned bank with $20 billion in assets and more than 450,000 members. However, it is understood P&N was uncomfortable with recent media reports questioning Mr Bromwich’s leadership of Westpac’s RAMS Homes Loans business between 2018 and 2023 and decided to pull the proposed tie-up after three months of due diligence. It leaves the WA lender’s chief executive Andrew Hadley, who would have stepped down in favour of Mr Bromwich, now looking for a replacement deal to achieve P&N’s expansion plans. P&N gave no reason for the abrupt termination of the memorandum of understanding for the “merger of equals” struck in June but it left no doubt the decision was its call. “Police & Nurses Limited has concluded its due diligence on the potential merger with Beyond Bank Australia announced in June 2024 and has decided not to proceed,” it said. “The PNL board determined that progressing the merger would not be in the best interests of its members.” Recent media reports have explored Mr Bromwich’s tenure at RAMS, which was shut down by Westpac last month amid regulatory investigations and legal action over the conduct of its franchisees. Beyond declined further comment outside of its announcement observing the termination of the potential merger, insisting it “remains a prosperous bank with an exciting strategy for the future”. “As one of Australia’s most trusted customer-owned banks, Beyond Bank’s customers will always be its highest priority and it is looking forward to continuing to provide financial wellbeing for them and their local communities,” it said. A merged Beyond and P&N would have become either the country’s third or fourth biggest mutual bank behind People First Bank, Newcastle Greater Mutual and Great Southern Bank. Australia’s fragmented mutual banking sector is rapidly tightening as the bigger players chase the scale they believe they need to meet the big investments in technology and products required to keep pace with the Big Four banks - Commonwealth, ANZ, Westpac and NAB. The footprints of the two potential merger partners dovetailed nicely, with P&N’s footholds in WA, northern NSW and south-east Queensland seemingly complementing Beyond’s strength across South Australia, the ACT, NSW and Victoria. Beyond, which began life in 2006 via a merger of two credit unions servicing Commonwealth public servants, is considerably bigger, with about 250,000 members to P&N’s 200,000. Mr Hadley has made no secret of P&N’s aim to get bigger outside of WA by partnering with other players. Even as Australia’s seventh-biggest mutual bank, P&N — formerly a credit union set up to handle the financial needs of WA’s police and nurses — is still less than half the size of its sector rivals. Mr Hadley declined to be drawn on the reasons behind P&N’s decision. However, he noted: “It is highly unusual for a merger not to proceed after an MoU has been signed.” “We are obviously disappointed at our end given the significant time and effort that’s been invested. But ultimately, the role of the board is to act in the best interests of members and we are confident we’ve made the right decision.” Mr Hadley said P&N would now “take a step back and contemplate what comes next”. However, he suggested there was no shortage of other merger targets. “There’s always plenty of people in the customer-owned banking industry ready to have conversations,” he said.