Competition regulator unconvinced of merits of ANZ’s acquisition of Suncorp Bank, seeks further views

ACCC Suncorp ANZ

Australia’s competition regulator, the ACCC, has sought “further views” on ANZ’s proposed $4.9 billion acquisition of tier-two rival Suncorp Bank, after issuing a preliminary statement expressing doubt the deal would yield the public benefits promised by the big four bank.

Releasing its ‘statement of preliminary views’ today, the ACCC said it was yet to be swayed by ANZ’s argument that the takeover would benefit the public by creating a stronger, more service-efficient bank.

“The ACCC’s preliminary view is that the information currently before it is insufficient to substantiate the nature, likelihood and extent of the claimed public benefits, including ANZ’s estimates of future synergies that will be achieved and claims regarding public commitments to investment in Queensland or improvements in prudential stability arising from the Proposed Acquisition,” the ACCC wrote in its statement.

The competition regulator further argued that smaller banks like Suncorp play an “essential role” as a “competitive constraint” on the big four.

It also noted particular concern over the deal’s implications for agribusiness banking, small and medium enterprise banking, home loans and deposits.

The ACCC is yet to make a decision on the proposed acquisition.

Following the release of its preliminary view, the competition regulator called for further submissions from industry stakeholders and consumers on how the proposed acquisition may impact competition.

ACCC deputy chair Mick Keogh said the ACCC seeks public input “on issues including the extent to which it will impact lending rates, deposit rates, fees and charges, consumer choice, service levels, and innovation”.

“Our home loan price inquiry reports of 2018 and 2020 showed competition between the biggest four banks has been at best muted. Any acquisition of a potential rival by one of the major banks must be closely considered,” Keogh said.

He added: “Our statement of preliminary views outlines the key competition issues we’ve identified to date.

“Before we finalise our views, we welcome further submissions from stakeholders and consumers alike on the issues raised. After we consider submissions from consumers and interested parties, we will conclude our review and expect to announce our decision in mid-June.

“We are also eager to hear from stakeholders about whether they think the acquisition will have any public benefits.”

The ACCC confirmed it could only grant authorisation for the acquisition if it was satisfied there would not be a substantial lessening of competition, or that the acquisition would yield public benefits that outweigh any public detriments.

A final decision on the proposed acquisition is scheduled for 12 June 2023 – a significant extension of its typical 90-day decision period for mergers and acquisitions.

ANZ’s proposed takeover of the Queensland-based Suncorp Bank was first proposed in early December last year.

Public submissions on the Suncorp Bank acquisition can be made to the ACCC until 18 April 2023.