I N F O R M AT I O N D O CU M E N T

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1 I N F O R M AT I O N D O CU M E N T PROPOSED TRANSFER OF BUSINESS From QUAY CREDIT UNION LTD To SGE MUTUAL LIMITED (trading as G&C Mutual Bank) Quay Credit Union Ltd (QCU) proposes to merge with SGE Mutual Limited, trading as G&C Mutual Bank (GCMB), by transferring all of its business to GCMB. In order for the transfer of QCU s business to GCMB to proceed, QCU s members will need to approve the merger at a Special General Meeting of QCU members scheduled for 3 August Subject to QCU members approving the merger, a Special General Meeting of GCMB members will be held on 16 August 2016, at which GCMB s members will be asked to accept the transfer to GCMB of QCU s business. If the members of QCU and GCMB approve the merger proposal at their respective Special General Meetings, and if the Australian Prudential Regulation Authority (APRA) grants the necessary regulatory approvals, then the transfer of QCU s business to GCMB will take effect on 1 September 2016 or on such later date as APRA determines. This Information Document has been prepared to provide GCMB members with information about the merger proposal. The GCMB Board has unanimously endorsed the contents of this Information Document. Please read this Information Document carefully before deciding whether to attend (or vote by proxy at) the GCMB Special General Meeting to be held on 16 August If you have any queries about the merger proposal, please call one of the member information lines below. SGE Mutual Limited (trading as G&C Mutual Bank) Information Line Telephone: gcmb@gcmutualbank.com.au Quay Credit Union Information Line Telephone: Mergerinfo@quaycu.com.au DISCLAIMER The Australian Prudential Regulation Authority (APRA) has approved this Information Document pursuant to Rule 9 of the Transfer Rules No 1 of 2015 for purposes of the Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth). In deciding whether to approve this Information Document, APRA has consulted with the Australian Securities and Investments Commission (ASIC). Both APRA and ASIC accept no responsibility for the accuracy or otherwise of any matters contained in this Information Document. Page 1 of 8

2 THE MERGER & THE TRANSFER OF QCU s BUSINESS TO GCMB The merger will involve a total transfer of QCU s business to GCMB under the Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth). With effect on the merger date: all of the assets and liabilities of QCU will become assets and liabilities of GCMB; all of the duties, obligations, immunities, rights and privileges that apply to QCU will apply to GCMB; each member of QCU will become a member of GCMB and will be issued with a member share in GCMB (unless that person already holds a member share in GCMB); and each member share in QCU will be cancelled, other than the member shares of the Directors of QCU. Further information about the effect of the merger on GCMB s members is set out below under Impact of the Merger on GCMB Members. DEREGISTRATION OF QCU AFTER MERGER After the merger, QCU will be an empty shell company without any assets and with its Directors being its only members. The Board of QCU has given its assurance that it will deregister the QCU company after the merger date, that it will ensure all QCU funds are transferred to GCMB, and that it will prepare, sign-off and lodge financial statements for the QCU company.! For the reasons set out in this Information Document, the GCMB Board unanimously endorses the merger proposal and recommends that you vote FOR it. Each Director of GCMB intends to vote FOR the merger proposal. BACKGROUND QUAY CREDIT UNION (QCU) Quay Credit Union (QCU) has been providing banking services to its members for over 45 years, commencing operations in 1971 as AMP Employees and Agents Credit Union Limited with membership open to employees and agents of the AMP Group and their families. Over the years QCU s bond has been expanded to include GIO Australia employees and their families and also broadened to include people working in the financial services industry. Following a name change in 2011 to Quay Credit Union, QCU has maintained a suite of competitively priced products backed by lower transaction fees and personalised service. Most of QCU s growth since the name change has been driven by referrals from pre-existing members to their family and friends. As at 30 June 2016, QCU had total assets of $220 million, 6,950 members and 10 permanent employees (see further information set out in the financial tables on pages 5-6 of this Information Document). Page 2 of 8

3 GCMB GCMB was established 57 years ago and has since grown to be one of Australia s strongest memberowned financial institutions. From its humble origins as the Public Works Department Credit Union servicing public sector employees, GCMB s business has evolved through the course of 18 mergers and several name changes. GCMB now provides a comprehensive and award-winning range of financial services throughout metropolitan and regional markets. Following a lengthy member consultation process, GCMB commenced trading as G&C Mutual Bank in December GCMB operates 9 metropolitan and regional service centres in NSW and Victoria (located in Sydney CBD, Parramatta, Liverpool, Malabar, Melbourne CBD, Newcastle, Wagga Wagga, Bathurst and Lismore). As at 30 June 2016, GCMB had total assets of $861 million, 29,550 members and 82 permanent employees (see further detail set out in the financial tables on pages 5-6 of this Information Document). WHAT ARE THE REASONS FOR THE MERGER? The Australian financial services industry has become increasingly consolidated over the past decade. This consolidation has been driven by intense market competition, continuing downward pressure on interest margins, and an increase in funding, capital and infrastructure costs. As a relatively small financial institution, QCU has been particularly exposed to these market and regulatory challenges and expects them to intensify in the years ahead. In response to these market challenges, the QCU Board recognised the benefit of pursuing a voluntary merger with a like-minded organisation. In arriving at its decision to recommend a merger with GCMB, the QCU Board assessed and considered a number of other potential merger partners. In deciding that GCMB was the most suitable merger partner for QCU, the QCU Board gave particular weight to the following factors: GCMB has a proven track record of excellent service to members; GCMB has shown a demonstrable commitment to participating in initiatives to harness the combined scale of the customer owned banking sector; GCMB has an extensive range of competitive and award-winning products and services; GCMB s much larger size will deliver a post-merger balance sheet of around $1.1 billion; GCMB will retain a Quay Mutual Bank brand; and GCMB and QCU share similar histories, values and cultures. ADVANTAGES OF THE MERGER The Boards of GCMB and QCU have identified a range of benefits from the proposed merger, including the following: GCMB s enhanced scale will substantially strengthen GCMB s ability to preserve a mutual operating structure under which its members will continue to own, control and share in the benefits delivered by a mutual financial institution. The merger will release significant long-term operational cost savings which will be used to enhance the range and competitiveness of GCMB s products and allow GCMB to further develop innovative digital payment channels, including access to the real-time New Payments Platform that will commence operations in mid GCMB DIRECTORS STATEMENT The operations of GCMB and QCU will be integrated as soon as practical after the effective merger date. The required integration of computer systems and transactional services, major suppliers and outsourcing contracts, and infrastructure and corporate policies, will occur progressively after the merger and is expected to be completed within 2 months of the effective merger date. Page 3 of 8

4 IMPACT OF THE MERGER ON GCMB MEMBERS The merger will not involve any change to, nor will it have any impact on, GCMB s Constitution or the rights and liabilities of GCMB members. The merger will also not have any impact on, or involve any changes to, the GCMB products and services held by GCMB members. GCMB s suite of access mechanisms (including branches, on-line banking, phone banking and ATM/Eftpos networks) will remain unchanged after the merger, as QCU does not operate any branches or own any ATMs. GCMB COMPANY &TRADING NAMES In accordance with a resolution of GCMB members at its 2015, GCMB s incorporated name will change on 1 September 2016 from SGE Mutual Limited to G&C Mutual Bank Limited. The incorporated name of the merged entity on the proposed merger date of 1 September 2016 will therefore be G&C Mutual Bank Limited. GCMB will operate after the merger using 2 trading names G&C Mutual Bank and Quay Mutual Bank. GCMB HEAD OFFICE The location of GCMB s head office and registered company office will remain unchanged after the merger at Level 25, 201 Elizabeth Street, Sydney, NSW. GCMB BRANCHES Following the date of the merger, GCMB s network of branches a n d AT Ms will remain unchanged. GCMB STAFF The current Chief Executive Officer of GCMB, Mr David Taylor, will remain Chief Executive Officer of GCMB after the effective merger date and there will be no change to the current composition of GCMB s Executive Management Team. All permanent QCU employees that are employed by QCU immediately before the merger date (including any QCU employee that has submitted, or been provided with, notice of their employment termination with an effective date after the merger date, will continue to be employed by GCMB under the same terms and conditions of their employment with QCU. It is anticipated that 10 QCU employees will transfer to GCMB on the merger date. GCMB PRODUCTS AND SERVICES After the merger, all deposit a n d l o a n products, t r ansactional account s and credit car ds held by members of GCMB will continue under their existing terms, conditions, fee structures and interest rates (subject to any changes that may occur in future under the normal course of business). Page 4 of 8

5 FINANCIAL POSITION OF THE PARTIES The following table summarises the financial position of GCMB and QCU based on unaudited financial results for the year to 30 June By way of comparison, the table also includes the last audited financial results for each organisation for the financial year commencing on 1 July 2014 and ending on 30 June It is not anticipated that there will be any material change to the financial position of GCMB and QCU between 30 June 2016 and the effective merger date on 1 September If there are any material changes between 30 June 2016 and the date of the GCMB Special General Meeting on 16 August 2016, GCMB members will be advised. If you require further financial information please call or GCMB or QCU using the contact details set out on the front page of this Information Document. QCU GCMB QCU GCMB GCMB 30 June 2015 Audited 30 June 2016 Unaudited Post Merger ASSETS Cash and deposits at call 12,603 19,378 10,224 30,801 41,025 Advances to other financial institutions 86, ,138 79, , ,608 Trade and other receivables 1,334 3,430 1,452 4,002 5,454 Loans and advances 124, , , , ,245 Financial assets - available for sale ,821 2,212 Loss reserve loan Property, plant and equipment 24 1, ,068 2,072 Intangible assets 96 1, ,222 1,255 Taxation assets ,875 2,079 Total Assets 225, , , ,867 1,081,150 LIABILITIES Deposits 204, , , , ,432 Borrowings ,850 81,850 Trade and other payables 3,546 9,639 2,867 9,726 12,593 Subordinated debt Derivative liabilities Tax liabilities Provisions 136 1, ,311 1,944 Total Liabilities 207, , , , ,426 Net Assets 17,459 78,799 17,493 81,231 98,724 EQUITY Retained earnings 17,325 76,527 17,356 78,955 96,311 Preference shares - 1,996-2,000 2,000 Redeemable member shares Asset revaluation reserve Total EQUITY 17,459 78,799 17,493 81,231 98,724 Page 5 of 8

6 STATEMENT OF COMPREHENSIVE INCOME The following table summarises the financial performance of GCMB and QCU based on unaudited financial results for the year to 30 June By way of comparison, the table also includes the last audited financial results for each organisation for the financial year commencing on 1 July 2014 and ending on 30 June It is not anticipated that there will be any material change to the financial performance of GCMB and QCU between 30 June 2016 and the effective merger date on 1 September If there are any material changes between 30 June 2016 and the date of the GCMB Special General Meeting on 16 August 2016, GCMB members will be advised. If you require further financial information please call or GCMB or QCU using the contact details set out on the front page of this Information Document. QCU GCMB QCU GCMB 30 June 2015 Audited 30 June 2016 Unaudited Net operating income 4,606 21,749 4,708 21,380 Total operating expenses 3,993 17,708 4,664 17,812 Profit before income tax 614 4, ,567 Income tax expense 170 1, ,068 Profit after income tax attributable to members 444 2, ,499 Other comprehensive income gain on financial assets recognised in equity Total comprehensive income for the year 444 2, ,499 The following table summarises the regulatory capital position of GCMB and QCU as at 30 June 2016 and 30 June It is not anticipated that there will be any material change to the regulatory capital position of GCMB and QCU between 30 June 2016 and the effective merger date on 1 September If there are any material changes between 30 June 2016 and the date of the GCMB Special General Meeting on 16 August 2016, GCMB members will be advised. If you require further financial information please call or GCMB or QCU using the contact details are set out on the front page of this Information Document. QCU GCMB QCU GCMB GCMB 30 June 2015 Audited 30 June 2016 Unaudited Post Merger REGULATORY CAPITAL RATIOS Common Equity Tier 1 capital 15.22% 22.12% 15.23% 18.69% 17.97% Additional Tier 1 capital % Total Tier 1 capital 15.22% 22.48% 15.23% 18.69% 17.97% Tier % 0.50% 0.70% 0.37% 0.44% Total Capital Ratio 15.92% 22.98% 15.93% 19.06% 18.41% REGULATORY CAPITAL Common Equity Tier 1 capital 16,115,277 74,119,000 16,144,988 76,087,290 92,232,278 Additional Tier 1 capital - 1,200, Total Tier 1 capital 16,115,277 75,319,000 16,144,988 76,087,290 92,232,278 Tier 2 741,156 1,679, ,149 1,517,606 2,259,755 Total Regulatory Capital 16,856,433 76,998,263 16,887,137 77,604,896 94,492,033 THIRD PARTY ADVICE GCMB used its own internal resources, as well as independent external parties, to help it conduct due diligence on QCU s business. The external parties engaged were: Daniels Bengtsson Pty Limited PricewaterhouseCoopers (PwC) Legal due diligence including Australian Financial Services Licensing and Credit Act Licensing External Audit transition arrangements These investigations have not revealed any problems with the business operations of QCU that would cause the GCMB Board not to proceed with the merger. Page 6 of 8

7 POST-MERGER COMPOSITION OF THE GCMB BOARD If the merger with QCU is approved, GCMB s Board will consist of 8 Non-Executive Directors, comprising 5 current GCMB Directors and 3 Directors drawn from the Board of QCU. One Director of GCMB, Mr Alan Green, will cease to hold office as a Director of GCMB on the merger date of 1 September Mr Green s term of office was due to expire at GCMB s October The 3 current Directors of QCU set out in the table below will become Directors of GCMB as soon as the certificate of transfer comes into force for the terms of office and, for the purposes GCMB s Constitution, holding office as either an or Appointed Director as stated in the table. Name Mr Peter Clarke Ms Donna Hardman Term of office expires At the end of GCMB s 2019 At the end of GCMB s 2018 Elected or Appointed Director Mr Steven Helmich 1 September 2017 Appointed Director As at the merger date of 1 September 2016, the composition of the GCMB Board and the terms of office of each GCMB will be as set out in the table below. Name Mr Julian Kennelly Mr Alex Hutchison Mr Trevor Donegan Mr Peter Clarke Ms Donna Hardman Term of office expires At the end of GCMB s 2017 At the end of GCMB s 2018 At the end of GCMB s 2019 At the end of GCMB s 2019 At the end of GCMB s 2018 Elected or Appointed Director Mr Steven Helmich 1 September 2017 Appointed Director Ms Karin Hawkins 1 June 2017 Appointed Director Mr Greg Hammond 1 December 2016 Appointed Director Mr Dave Taylor Not Applicable Managing Director Page 7 of 8

8 INTERESTS OF OFFICERS AND OTHER STAKEHOLDERS IN THE MERGER The members of QCU will be asked to separately approve (at their Special General Meeting on 3 August 2016) the payment o f a b e n e f i t to 5 Q C U non-transferring Directors. As indicated in the above section Post-merger Composition of the GCMB Board, Mr Peter Clarke, Ms Donna Hardman and Mr Steven Helmich will become Directors of GCMB and will initially each be entitled to annual Director remuneration of $47, The amount of this annual remuneration is higher than the amount those Directors currently receive as Directors of QCU, and reflects the greater size of GCMB and the corresponding increase in directorial responsibilities. Other than as described above: no Director or Officer of either QCU or GCMB has any interest in the proposed transfer of business; no Director, Officer, member or depositor of either QCU or GCMB will receive any compensation, consideration, incentive or benefit in relation to the transfer of business; and no Director, Officer, member or depositor of either QCU or GCMB has any agreement that is conditional upon the transfer of business proceeding. HOW DO GCMB MEMBERS VOTE ON THE MERGER PROPOSAL? The merger proposal will only be approved if: - members of QCU pass a special resolution approving the proposal at the QCU Special General Meeting to be held on 3 August 2016; and - members of GCMB pass a special resolution approving the proposal at the GCMB Special General Meeting to be held on 16 August Members of GCMB can vote: In person: Please arrive early if you decide to attend the Special General Meeting, as you will need to register your attendance on arrival. By proxy: Even if you cannot attend the Special General Meeting, you can vote by completing an Appointment of Proxy form and returning it to us. If you wish to vote by proxy, please read the Appointment of Proxy form before completing it. It is important you complete the Proxy form correctly otherwise your vote may not be counted. The Appointment of Proxy Form allows you to appoint the Chair of the Special General Meeting as your proxy. The Chair must exercise your proxy vote according to your direction. You may appoint another person as your proxy, however, you should be certain that the appointed person will be attending the Special General Meeting. WHAT IF I HAVE QUESTIONS ABOUT THE MERGER PROPOSAL? The Special General Meeting of G CM B member s is to be held on 16 August The Chair of the Special General Meeting will act as moderator to facilitate discussion about the proposed merger. No independent moderator will be appointed. We encourage you to raise any questions you may have in relation to the merger before the Special General Meeting. Contact details for both QCU and GCMB are set out on the front page of this Information Document. Page 8 of 8