Suncorp’s takeover by ANZ to deliver another regional bank to the Big Four
Another is about to bite the dust.
The agreed sale of Suncorp’s banking business to ANZ for $4.9 billion will put another independent regional bank back in the hands of the Big Four, further strengthening the latter’s market power.
Most of the big state brands have already been overthrown, with a beleaguered Bankwest swallowed up by Commonwealth Bank in 2008 in the shadow of the global financial crisis.
St George was taken over by Westpac the same year.
The competition regulator will look closely at the latest deal, but may well find competition unaffected as ANZ will still be the smallest of the Big Four in home lending after the acquisition.
It’s a purchase that makes far more sense for ANZ than accounting software company MYOB, those discussions have yet to be officially concluded.
The takeover will expand the bank’s presence in fast-growing Queensland and increase its share of the home lending market, offering $45 billion in loans and more than one million customers.
The risk will be in integration, often the biggest problem for large organizations trying to digest new purchases that use different IT systems and live in different cultures. ANZ is already lagging behind on the IT front.
ANZ’s initial comments provided insight into the bank’s position with the Australian Competition and Consumer Commission, with chief executive Shayne Elliott acknowledging that “there would rightly be questions from the government and regulators on the competitive aspects of this transaction”.
But, he said, “as the smaller of the big banks, ANZ will be better able to compete more effectively in Queensland, delivering better results for customers.”
To retain the Queensland Government, and potentially the ACCC, ANZ has also committed to maintain Suncorp’s “current branch footprint” in Queensland for at least three years and to continue to invest in Suncorp Bank and Queensland.
Commonwealth Bank made similar commitments on branches and jobs when it bought Bankwest.
But it’s debatable whether Suncorp’s customers, mostly in Queensland, will be better off by a larger national bank.
Fourteen years after its takeover by Commonwealth, Bankwest retains its identity and is headquartered in Perth.
However, it is no longer the same franchise as it once was, with parts of the business separated to the benefit of the parent company and the group run by a succession of internal Commonwealth appointments.