ACCC clears way for Suncorp Bank deal after dropping appeal

The ACCC has dropped its opposition to ANZ’s buyout of Suncorp Bank after being defeated at the Australian Competition Tribunal.

A Suncorp Bank’s branch in Brisbane. A tribunal has authorised the $4.9 acquisition of Suncorp’s banking arm by ANZ Bank. Picture: Dan Peled / NCA NewsWire

The competition regulator has conceded the fight to block ANZ’s $4.9bn purchase of Suncorp Bank, announcing it would not appeal a decision to grant authorisation for the deal.

The Australian Competition and Consumer Commission said on Tuesday it would not propose to seek a review of the decision to allow ANZ’s purchase, clearing another hurdle for the Melbourne-bank’s buyout of Suncorp Bank.

The ACCC said while the Australian Competition Tribunal had overturned its attempt to block the deal, it would not seek to upset the ruling.

ACCC chair Gina Cass-Gottlieb said while the ACCC reached a different decision, the regulator conceded in “complex cases that require the assessment of significant volumes of information and data, different decision makers can reasonably arrive at different conclusions”.

“The availability of review of the ACCC’s merger authorisation decisions is an important check and balance for this administrative decision-making process,” she said.

“In reaching its decision, the Tribunal largely adopted the ACCC’s legal and economic framework for assessing the merger and its impacts, although ultimately formed a different view about the significance of the proposed acquisition on competition.”

The ACCC had attempted to block ANZ’s takeover of Suncorp Bank, warning the deal risked neutering competition and removing a nascent competitor to the big four lender.

The competition regulator had warned ANZ’s deal risked driving down competition in the mortgage market, as well as regional business and agribusiness lending markets.

Bendigo Bank had also supported a push to block the deal, citing the potential for the regional lender to roll up Suncorp Bank and create a challenger to the big four incumbents.

But the tribunal overruled the ACCC on the deal, warning ANZ’s takeover would not substantially lessen competition and noting Macquarie’s role as a challenger bank in the market.

Gina Cass-Gottlieb has warned the ACCC may block future bank deals despite dropping opposition to ANZ-Suncorp Bank’s $4.9bn merger. Aaron Francis / The Australian

Ms Cass-Gottlieb, who has sat out the fight over ANZ’s purchase of Suncorp Bank due to conflicts over her previous work, said the competition tribunal had reached its decision by largely adopting the ACCC’s legal and economic framework for assessing the merger and its impacts.

“The Tribunal also shared the ACCC’s fundamental concerns that the national home loans market has features which make it currently conducive to co-ordination,” she said.

“The Tribunal also found that many of the public benefits claimed by ANZ and Suncorp were either not public benefits or were not specific to the proposed acquisition.”

This came as the tribunal published its reasons in a lengthy judgement which found neither the ACCC nor Bendigo “advanced any evidence that any lessening of competition in a national retail deposits market was significant or meaningful”.

The judgement noted any potential combination of smaller banks was unlikely to create a bank that could “engage in more meaningful price competition with the major banks”.

But Ms Cass-Gottlieb left the door open to future challenges by the ACCC to further bank consolidation, mergers, or acquisitions, amid speculation about more moves in the market after Suncorp Bank’s buyout.

“Banking markets are critical for consumers and businesses. The major banks have, for many decades now, been the same four banks with dominant market shares,” she said.

“For these reasons, the ACCC will continue to closely scrutinise these markets.”

ANZ’s takeover now depends on moves by the Queensland and federal governments to clear the way for the $4.9bn deal.

Queensland must amend legislation governing Suncorp, introduced after the amalgamation of Suncorp, the insurer, with the state-owned Metway Bank.

Treasurer Jim Chalmers must also give approval for the deal.

An ANZ spokeswoman said the bank was pleased with the ACCC’s move to drop its opposition.

“We still have further conditions to meet,” she said.

“We remain committed to completing the acquisition as soon as possible once all conditions are met.”