A second fintech has been thwarted (or failed) at its attempt to engineer access to an ADU licence via a takeover of Maleny Credit Union. A merger with another mutual ADI is the likely fall-back for MCU.
Sydney-based software enterprise Lakeba Group began negations with MCU Ltd in April, hoping to clear hurdles (on the regulator side) that obstructed Firstmac in its unsuccessful effort last year.
Lakeba is the head entity for Ezifin, a digital banking system supplier.
Sarah Davies, the MCU chair, told members: “We have been negotiating with Ezifin for the acquisition of MCU for some time. Unfortunately, contractual conditions were no longer being met by Ezifin and the board has reluctantly had to bring those arrangements to an end.
“We are now actively engaged in developing alternate strategies that will be in members’ interests while at the same time meeting APRA’s requirements. We will advise members further when we are in a position to do so.
“MCU’s staff and directors appreciate that the lengthy delays in restructuring the business are frustrating for you, but please understand that the task is complex and time-consuming given the number of stakeholders involved.”
Rumours have been rife for many weeks that “APRA’s requirements” for MCU are more like an edict: ‘hurry up and arrange a merger with a nearby mutual’.
The inability of initially Firstmac and now Lakeba/Ezifin to crash their way into the banking industry via the demutualisation of a credit union may dishearten any fintechs hoping to speed up their own neobank plans by adopting this method.
But surely more offers of this variety will emerge for any willing, small-scale credit union on APRA’s watchlist.