Banking News

ANZ Suncorp Merger Back on Track

(20 February 2024 - Australia) ANZ and Suncorp successfully appealed last year's ruling against a merger after a tribunal brushed aside regulators determined to block the $4.9 billion mega-deal.

While the Australian Competition and Consumer Commission had rejected the efforts to merge last year, ANZ and Suncorp successfully appealed the ruling. The Australian Competition Tribunal ultimately found that the deal would not hurt competition in home, business or agribusiness lending.

The decision paves the way for the biggest merger in banking since Commonwealth Bank took out ailing Bankwest during the global financial crisis in 2008. It could mean more consolidation in the sector amid intense competition for home and business loans.

While competition tribunal’s deputy president, John Halley, said co-ordination between the banks was a risk in a market as concentrated as the banking sector, recent developments had “reduced, and are likely to continue to reduce”, this danger.

“Material asymmetry in the market shares of the major banks, the emergence of Macquarie as a ‘maverick’ in the market and the increasing use of brokers that has reduced consumer choices [are] facilitating greater customer switching,” Justice Halley said.

The decision is a blow to the ACCC, but the competition regulator’s chairwoman, Gina Cass-Gottlieb, told The Australian Financial Review that it did not reflect a fundamental misunderstanding of the market.

“We know reasonable minds can differ when assessing matters,” said Ms Cass-Gottlieb, who would not commit either way on a further appealing the tribunal’s decision to the Federal Court.

“I don’t think this shows any fundamental misunderstanding, it identifies critical areas. We have seen in home loans previously, and also recently in retail deposits, it is difficult for customers to be sufficiently informed.

“The right questions are being asked and tested here; we have a different view to the tribunal.”

The takeover requires sign-offs from the Queensland and federal governments, but the tribunal decision on Tuesday all but cleared the way for the largest merger deal in banking since the global financial crisis. The tribunal also said the deal would have net public benefits due to new efficiencies.