Two of the Illawarra's financial institutions are planning to join forces in what could become the biggest building society and credit union merger in Australian history.The boards of IMB and Illawarra Credit Union/Community Alliance Credit Union have voted unanimously to form one large locally based $5 billion mutual organisation, which will better position the merged entity against the big banks.It is not the first time IMB has looked at joining forces with another Illawarra institution. It unsuccessfully expressed an interest in talking to City Coast Credit Union earlier this decade.IMB and ICU directors started seriously discussing the idea of a merger in March.The announcement of IMB as Money Magazine's Australian Building Society of the Year and ICU as Australian Credit Union of the Year was the catalyst to deciding the time was right to become a larger entity less prone to takeover."Our board is excited about this," Illawarra Credit Union chair Mary Youssif said.IMB chair Michael Cole said the marriage would work because of common values."We both share an absolute commitment to the Illawarra."The boards' decision must be approved by credit union members and the Australian Prudential Regulation Authority. If given the green light, the credit union's business would transfer to IMB on October 1 but the individual brands would remain.IMB chief executive Robert Ryan said such a move would strengthen the merged entity's position in the financial services market. "We are both Illawarra based and we are both committed to the Illawarra. What we don't want to see is either organisation being taken away from the Illawarra."Mr Ryan said he had received a positive response from IMB staff yesterday."They are very excited that we are going to be combining with a like institution. They see us being able to grow the two organisations to provide a really strong Illawarra-based alternative to the banks."Mr Ryan said their greatest synergy was a shared commitment to superior personal financial services for members."We will end up with over 50 branches and ... 80 ATMs," Mr Ryan said.ICU chief executive Michael Halloran would become deputy chief executive of the merged entity and, apart from one change to IMB's executive management, Mr Ryan said there would be no forced redundancies.He and Mr Halloran believed there was no better time to consider a merger."We have had another strong year," Mr Ryan said."In the last 18 months membership has been steadily growing. During the last six months the loan side has been strong."Mr Halloran said ICU's membership had grown 10 per cent in the past year.He confirmed ICU directors had looked at other options but believed a proposed merger with IMB was the best."It will be great for members, great for staff, great for Wollongong and great for the Illawarra region. At the end of the day creating a really strong local institution is very important to us."Details were posted on the ICU website yesterday and a member information document will be mailed out soon.ICU members will vote on the proposed merger at a special general meeting on September 22.