The bcu Directors unanimously recommend that you vote in favour of the bcu Merger resolution at the General Meeting* A Notice of General Meeting is included as Annexure A to this Member Booklet, and a proxy form for the bcu General Meeting accompanies this Member Booklet. Opportunity for The bcu General Meeting will be held at 10.00am our future (New South Wales time) on Tuesday 22 October 2019 at C.ex Coffs, 2-6 Vernon Street, Coffs Harbour. The Australian Prudential Regulation Authority (APRA) has Member Booklet approved this Member Booklet pursuant to Rule 9 of the Transfer Rules. In deciding whether to approve this Member Booklet, APRA has consulted with the Australian Securities For the proposed Merger of and Investments Commission (ASIC). Neither APRA nor ASIC accepts any responsibility for the accuracy or otherwise Bananacoast Community of any of the matters contained in this Member Booklet Credit Union Ltd (bcu) with or attached to this Member Booklet. Police & Nurses Ltd (P&N Bank) *Subject to there being no Superior Proposal Member Booklet 1 Important notices Purpose Defined terms This document contains information for bcu Members relating to Capitalised terms and certain abbreviations used in this document have bcu’s proposed Merger with P&N Bank and will assist bcu Members in the defined meanings set out in section 7 of this document. deciding how to vote on the bcu Merger Resolution at the bcu General A number of figures, amounts, percentages, prices, estimates, Meeting. The information comprises the information document calculations of value and fractions in this document are subject to the which is legally required to be provided to bcu Members under the effect of rounding. Accordingly, the actual calculations may differ from Financial Sector (Transfer and Restructure) Act 1999 (Cth) (Transfer Act) the calculations set out in this document. and the Financial Sector (Business Transfer and Group Restructure) Unless otherwise specified, all references to “$”, “A$”, “dollar” and “cent” Determination No. 2 of 2017 (Cth) (Transfer Rules). are references to Australian currency. bcu Members should read this document before making a decision as to how to vote on the bcu Merger Resolution. Privacy and personal information bcu, P&N Bank and their respective registries may collect personal Responsibility statements information in the process of implementing the Merger. The personal Except as outlined below, the information contained in this document information they may collect about you includes your name, contact has been provided by bcu and is the responsibility of bcu. details and details of your bcu membership, and the names of The information contained in pages 6 and 7 titled ‘P&N Bank’ individuals appointed by you to act as a proxy, corporate representative and section 4.6 (Intentions of P&N Bank for the future) (P&N Bank or attorney at the bcu General Meeting. The collection of some of this Information) has been provided by P&N Bank and is the responsibility information is required or authorised by the Corporations Act. of P&N Bank. bcu has not verified the P&N Bank Information bcu Members who are individuals and the other individuals in respect and neither bcu nor its officers, employees or advisers assumes of whom personal information is collected as outlined above have any responsibility for the accuracy or completeness of the certain rights to access the personal information collected in relation P&N Bank Information. to them. Such individuals should contact [email protected] in the The Independent Expert has prepared the Independent Expert’s Report first instance if they wish to request access to that personal information. included at Schedule 1 and is responsible for that report. None of bcu, The personal information is collected for the primary purpose of P&N Bank nor their respective officers, employees or advisers assumes assisting bcu and P&N Bank to conduct the bcu General Meeting and any responsibility for the accuracy or completeness of the Independent implement the Merger. The personal information may be disclosed Expert’s Report, except that bcu and P&N Bank are responsible for the to bcu’s and P&N Bank’s registries/transfer agents and advisers and to information given to the Independent Expert by them. print and mail service providers. No investment advice The main consequence of not collecting the personal information The information contained in this document does not constitute outlined above would be that bcu may be hindered in, or prevented financial product advice and has been prepared without reference to from, conducting the bcu General Meeting and implementing your own particular needs. Before making any decision in relation to the Merger. the Merger, including any decision to vote in favour or against the bcu bcu Members who appoint an individual as their proxy, corporate Merger Resolution at the bcu General Meeting, you should consider representative or attorney to vote at the bcu General Meeting should whether that decision is appropriate in light of your particular needs, inform such an individual of the matters outlined above. objectives and circumstances. If you are in any doubt about what you No internet site is part of this document should do in relation to your own financial position, please consult your financial or legal adviser. bcu and P&N Bank maintain internet websites. Any references in this document to a website is a textual reference for information only and Disclaimer as to forward-looking statements does not form part of this document. Certain statements in this document relate to the future. These Notice to foreign members forward-looking statements involve known and unknown risks, uncertainties, assumptions and other important factors that could The release, publication or distribution of this document in jurisdictions cause the actual results, performance or achievements of bcu or other than Australia may be restricted by law or regulation in such other P&N Bank to be materially different from future results, performance jurisdictions, and persons outside Australia who come into possession or achievements expressed or implied by such statements. Such of this document should seek advice on and observe any such risks, uncertainties, assumptions and other important factors include, restrictions. Any failure to comply with such restrictions may constitute among other things, general economic conditions, interest rates, the a violation of applicable laws or regulations. regulatory environment, competitive pressures and market demand. This document complies with disclosure requirements in Australia and The forward-looking statements in this document reflect views Australian law, which may be different to those requirements and laws held only at the date of this document. Other than as required by in other countries outside of Australia. law, neither bcu nor P&N Bank nor any other person gives any References to time representation, assurance or guarantee that the occurrence of the Unless otherwise indicated, all references to time in this document are events expressed or implied in any forward-looking statements in this to New South Wales time. document will actually occur. Subject to any continuing obligations under law, bcu and P&N Bank Date of document and their respective directors and officers disclaim any obligation or This document is dated 20th August 2019. undertaking to disseminate after the date of this document any updates or revisions to any forward-looking statements to reflect any change in expectations in relation to those statements or any change in events, conditions or circumstances on which any such statement is based. 2 Bananacoast Community Credit Union Ltd Contents Important notices 2 Chairman’s letter 4 P&N Bank 6 Our history and our future 8 Our community 9 Commitments to bcu Members 10 Timetable 11 What to do and how to vote 12 Reasons to vote for and against the Merger 14 SECTION 1 Discussion of reasons to vote for and against the Merger 15 SECTION 2 Summary and FAQs 20 SECTION 3 Key features of the Merger 26 SECTION 4 Future intentions and impact of the Merger on you 28 SECTION 5 Financial information 31 SECTION 6 Additional information 36 SECTION 7 Defined terms 40 SCHEDULE 1 Independent Expert’s Report 43 SCHEDULE 2 Comparison of product and services 127 SCHEDULE 3 Removal of fees 128 SCHEDULE 4 Comparison of bcu’s Constitution and P&N Bank’s Constitution 128 SCHEDULE 5 Board of the Continuing Entity and bcu Advisory Council 137 ANNEXURE A Notice of General Meeting 138 This is an important document and requires your immediate attention. You should read this document before deciding whether or not to vote in favour of the bcu Merger Resolution at the bcu General Meeting. If you are in any doubt as to how to deal with this document, please consult your financial, legal, or other professional adviser, call our contact centre on 1300 228 228 on business days between 8.00am – 6.00pm (AEST), speak to bcu’s in-store teams or email [email protected]. Member Booklet 3 Chairman’s letter Dear Member, On behalf of the bcu Board, I am pleased Why we need to merge to provide you with this Member Booklet, Although bcu is currently in a sound financial position, there are which outlines the details you will considerable challenges ahead which may reduce bcu’s ability need to consider about the proposed to continue to provide an attractive bank offering for current Merger of bcu and P&N Bank. and new bcu Members in the future. The bcu Directors believe that greater economies of scale are required to continue to offer The bcu Board believes that the Merger will deliver attractive market competitive interest rates and fees to offset expected benefits to bcu Members. Further, it is intended to implement the profitability pressures arising from the current highly competitive, Merger and deliver the proposed benefits, in a manner that limits low growth environment.