Regional Australia Bank Ltd. and Holiday Coast Credit Union Ltd. have completed due diligence in relation to their planned merger and the parties are now taking necessary steps to submit a formal merger proposal to Australian regulators.

Following the transaction, Regional Australia Bank will be the surviving entity, and the merged company would have assets worth more than A$2 billion.

The merger is expected to become effective on and from July 1, subject to approvals from members of both companies and the Australian Prudential Regulatory Authority.

Holiday Coast CEO Neville Parsons will retire from his post, effective on the merger date. Regional Australia Bank's CEO, Kevin Dupe, and chairman, Graham Olrich, will serve in the same roles in the combined entity. Regional Australia Bank will also appoint three Holiday Coast directors to join the board.