Non-major banks have slammed the ACCC following the announcement it would not oppose CBA's acquisition of Aussie Home Loans, saying the majors are creating a 'veneer of competition'.
The Australian Competition and Consumer Commission (ACCC) last week announced it would not oppose the Commonwealth Bank of Australia's (CBA) proposed acquisition of the remaining 67 per cent of the issued capital in Aussie Home Loans.
According to Heritage Bank chief executive John Minz, the decision creates confusion regarding smaller brands' level of independence, as reported in InvestorDaily's sister publication The Adviser last week.
"This strategy is creating a false impression among customers that there is a high level of competition in the marketplace, but in reality a number of these so-called competitors are actually part of the big banks themselves," he said.
"People may be surprised to know that by supporting brands like this they are not striking a blow for competition but are actually entrenching the dominance of the big banks."
bankmecu managing director, Damien Walsh, said the acquisition highlights the need for more transparency regarding major banks' multi-brand strategies.
"There is growing concern that the major banks are creating a veneer of competition through their ownership of various sub-brands, such as Aussie Home Loans," Mr Walsh said in a statement.
"We believe this significantly impacts on the ability of consumers to make informed decisions about their banking.
"All Aussie Home Loans' advertising should make it clear to consumers that their majority owner is the Commonwealth Bank."
A survey of 1,000 Australians conducted by bankmecu indicated 74 per cent of people would support banks which are wholly owned by other banks disclosing their ownership in their advertising, Mr Walsh said.
Also, a survey commissioned by Abacus found 65 per cent of Australians believe there is not enough competition in the Australian banking system, while 50 per cent believe that the dominant share of home loans by the big four banks is bad for Australia, The Adviser reported.
"Clearly people are confused about the ownership of the smaller lenders, with the multi-branding approach of the big banks reinforcing this mask of competition. The decision on Aussie Home Loans will only perpetuate this confusion," Mr Minz said.
Aussie Home Loans has a franchise network of approximately 750 mortgage brokers across Australia.
