GSB, Churches vote to merge and rebrand
Published:Sunday | July 24, 2011 | 12:00 AM
Avia Collinder, Business Writer
Shareholders of GSB and Churches Co-operative credit unions have voted in separate meetings in favour of amalgamation, which sources say will be executed over the next 12 months to create a near J$7-billion operation.
The merger, however, will not be sufficient to displace COK Sodality as the No. 1 credit union by assets, but positions the new entity to overtake it.
Sunday Business was reliably informed that the new organisation will pursue rebranding and will neither be named Churches nor GSB.
In the first six months, the merger partners will integrate administrative and computer systems; and appoint a new president and chief executive officer for the merged, rebranded entity.
Churches is currently run by chief executive officer Basil Naar, while the president is Orville Hill. GSB Co-operative is run by CEO Courtney Lodge, with Michael Roofe as president.
On Tuesday, July 19, some 80 per cent or 101 members present at the GSB meeting voted for the amalgamation, with 14 voting against; 87 per cent or 272 members of Churches voted for the merger, with 36 against.
GSB has 22,000 members, while Churches as 116,000 active shareholders.
Together, the two have an asset base of J$6.8 billion: Churches last estimated its assets at J$4.3 billion; and GSB J$2.5 billion. The agreement to merge was first announced in April. Tuesday's vote was the final hurdle to close the deal.
A senior credit-union official said the proposed merger is different from the series of similar deals, saying it would not be a "transfer of engagement", such as that pursued between Sodality and COK in late 2009.
"There is no one asking the other to takeover. What we have is a marriage between two entities of equal strength. Based on operational strength we are equal, so this is an amalgamation," the official said.
Both credit unions have been investing in new products and business systems in the last 18 months, to strengthen their markets and balance sheets.
Churches is pushing an individual retirement scheme and new funds-management initiative, and has rolled out satellite service points in several rural parishes.
GSB, which is spending on a new loans-management system, has also pursued plant-improvement projects, including work on a building at 8 East Avenue at a capital cost of J$6 million, and has introduced a corporate social-responsibility programme.
The expected returns from all training, plant, and technology spend were expected to be 15.2 per cent for both 2010 and 2011, GSB said.
GSB Cooperative Credit Union is a 65-year-old operation, which opened for business on July 2, 1946, under the Industrial and Provident Societies Act. Churches is 40 years old this year.