In April, the Australian Competition and Consumer Commission (ACCC) published a statement of preliminary views concerning ANZ’s push to assume full ownership of Suncorp Bank — first announced in July 2022.
The ACCC is exploring whether the $4.9 billion deal would undermine competition across the banking sector. This includes considering:
- Whether the proposed acquisition of an established second-tier bank would result in the “potential loss of competitive constraint on the major banks”.
- Whether the deal would give rise to “coordinated effects in one or more relevant markets”.
- Whether the proposal would limit ANZ’s incentives to “compete vigorously” in one or more relevant markets.
- The impact of the proposed acquisition on the potential risk of unilateral effects arising in the supply of agribusiness banking, SME banking, mortgage lending, and retail deposits.
The competition watchdog is also considering the impact of alternative scenarios — Suncorp Bank remaining under Suncorp Group or being acquired by Bendigo and Adelaide Bank.
ANZ and Suncorp Bank have sought to allay these concerns, noting potential benefits for customers, including “increased scale to enable continual and more efficient investment in digital transformation and innovation”.
But the ACCC was unconvinced.
“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 watchdog noted.
As such, the ACCC extended the consultation period, inviting further stakeholder feedback by 18 April 2023, with a final determination due on 28 July 2023.
Both ANZ and Suncorp have now released their formal responses to the ACCC’s concerns.
Suncorp Group chief executive officer Steve Johnston said the response stressed there would “be no real commercial likelihood of any alternative transaction”, adding the ANZ deal is in the best interests of Suncorp’s customers.
The submission also stresses the transaction “would not substantially lessen competition” or have a “detrimental impact on the competitive environment”.
Mr Johnston said the group, along with ANZ, continues to work with the Queensland government to demonstrate the benefits of the merger to the local community and the Australian public at large.
According to the CEO, offloading Suncorp’s banking division would enable the group to better service insurance customers.
“Insurance businesses in Australia play an integral role in the Australian economy yet they face increasing challenges given hardening global reinsurance markets,” Mr Johnston said.
“Suncorp operating as a pure play insurer will deliver significant public benefits to Queensland and Australia and comes at a time when the value of insurance has never been greater.”
Suncorp’s formal response to the ACCC came just days after ANZ announced its submission, which sought to downplay competition concerns.
ANZ CEO Shayne Elliott said the banking sector is “dynamic and competitive”, adding the big four bank’s acquisition of a smaller peer would not produce negative outcomes for customers, particularly in Queensland.
“Queensland is thriving, and we see strong opportunities for its future growth and prosperity. We’re excited to invest in the opportunities ahead,” Mr Elliott said.
