ANZ determined to press on with $4.9bn Suncorp Bank deal
ANZ still wants to buy Suncorp, but CEO Shayne Elliott has rejected suggestions his bank’s recent price war was an attempt to challenge the ACCC’s objections to the deal.
ANZ chief executive Shayne Elliott is committed to his $4.9bn bid for Suncorp Bank, despite recent figures showing the Queensland bank’s market share sliding at the same time the Melbourne lender is pulling ahead.
Unveiling a $7.4bn full-year cash profit on Monday, Mr Elliott pointed to the success of ANZ’s retail banking arm in taking market share from rivals.
ANZ reported its home lending was growing at par with the broader loan market, in the wake of NAB and Westpac revealing they had pulled back from the mortgage market amid concern others were writing loans too cheaply for them to compete.
At its recent results Suncorp Bank revealed its loan book had contracted $64m or 0.1 per cent in the September quarter.
Mr Elliott said although ANZ was competing with other lenders in the market the Suncorp deal still made sense as it allowed the bank to grow its customer base.
ANZ was looking at “the long term results of the franchise”.
“We’re acquiring 1.2 million customers and we get to onboard those and offer them the ANZ suite of services including ANZ Plus, that’s a major opportunity we’re pretty excited about,” Mr Elliott said.
“We’re confident the $4.9bn we’ve offered to pay is a fair price and will allow us to generate a fair return for our shareholders.”
ANZ’s bid for Suncorp Bank is set to land in front of the Takeovers Panel in February after the Australian Competition and Consumer Commission blocked the deal citing competition concerns.
The ACCC said it was worried ANZ’s grab of market share would allow it to dominate the lending market. But Mr Elliott said ANZ’s recent fight for mortgage market share, as the last big bank in the market offering cashbacks to borrowers, did not suggest he was seeking to disprove the ACCC’s concerns about competition.
“We’re not that smart,” he said. “There’s no subsidy happening here, shareholders are not giving up returns to help us do this.”
Mr Elliott has previously said ANZ’s acquisition of Suncorp Bank presented a key opportunity to spread the costs of the bank’s ANZ Plus technological transformation across more customers.
ANZ reported customer numbers on ANZ Plus had topped 500,000 with 40 per cent of users not legacy customers of the bank. ANZ has started offering mortgage refinancing through ANZ Plus, with Mr Elliott noting the bank would see a near 20 per cent cost benefit for loans written through the platform.
Mr Elliott said ANZ would bank some savings from the cheaper loans, while offering borrowers a more competitive rate.
“A lot of that will depend on the competitive response over time,” he said. “We’re always competing.”
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