The ‘laughable’ reasons why ACCC banned ANZ-Suncorp deal

The competition watchdog decided it wanted to reject Anz’s takeover of Suncorp bank from the start and has spent six months trying to find reasons to back its decision.

The ACCC has rejected the merger of ANZ and Suncorp bank. Picture: Britta Campion / The Australian

The ACCC decided upfront it wanted to ban ANZ’s takeover of Suncorp bank – quite possibly embarrassed by all the small banks it had previously allowed big banks to swallow – and it has spent the last six months trying to find reasons for a ban.

Frankly the ‘reasons’ it has come up with are laughable.

The primary one is that Suncorp, all on its tiny little own – it has just 2 per cent of the market – is keeping the four big banks honest; and keeping them honest right around Australia.

You can just see those big bank CEOs in Melbourne and Sydney, contemplating – in the ACCC’s bureaucratic eyes – a home loan rate rise.

Their first thought is: what would Suncorp do? Would it gazump us and steal all our customers?

Indeed, the ACCC all-but accused the big four of plotting a home loan cartel, if only Suncorp was swallowed by ANZ. And I quote ACCC deputy-chairman Mick Keogh.

“We consider there is an increased likelihood of co-ordination (apparently, the 21st century bureaucratic word for cartel) between the four major banks in the supply of home loans should Suncorp Bank become part of ANZ.”

My goodness, who knew: only the plucky bankers at Suncorp stood between 26m Australians and being (financially) raped and pillaged by the CBA, ANZ, NAB and Westpac.

What about moi, what about moi, the bankers at Bendigo and Bank of Queensland might plaintively ask? Aren’t we plucky enough?

Yes, the ACCC also argued that Suncorp was an important competitive player specifically in agribusiness and SME banking in Queensland.

ACCC deputy chairman Mick Keogh.

But it made no serious case for clear-cut substantial reduction in competition there, other than to bizarrely claim that ANZ would seek to drive away all the Suncorp customers after paying $5bn to buy them.

The main emphasis of the ACCC’s rejection was on home loans, and there its analysis and argument is just embarrassing.

Even its so-called expert – roped in from the UK – didn’t come to that conclusion, ruling there was “no real chance” of the reduced competition cited by Keogh.

According to the expert you could only argue home loan competition would be reduced if you assumed Suncorp merged with Bendigo instead of ANZ – something that Suncorp has made clear was just not on.

Indeed, the ACCC itself all-but announced it didn’t have a clue of what it was doing or why it was banning the takeover, by engaging in bureaucratic double-negative double-talk.

Keogh again: “We are not satisfied that the acquisition is not likely to substantially lessen competition in the supply of home loans to Australian consumers”.

See the double negative? We are “not satisfied” that the deal was “not likely”?

Actually deputy-chair, the ACCC is required to conclude positively that the deal likely would substantially lessen competition.

And reduce it not in comparison with some fantasy merger that it would like to orchestrate, but compared with current reality.

In any event, the idea that a merged Suncorp-Bendigo would keep the big banks honest is equally as ludicrous.

Sorry, the ACCC created the Big Four oligopoly by waving through big bank takeover of regional bank again and again.

The most egregious was allowing Westpac to take over St George and thereby seriously and I mean seriously reduce competition – for home loans especially – in NSW.

The bank competition bird has well and truly flown, and it was the ACCC that let it out of the cage. It’s not going to be brought back in by keeping Suncorp on its own or even merged with Bendigo.

Originally published as The ‘laughable’ reasons why ACCC banned ANZ-Suncorp deal