ANZ pushes on with plans for Suncorp bank acquisition
ANZ is ramping up efforts to get its acquisition of Suncorp’s bank across the line, including initiating talks with the Queensland government.
ANZ is ramping up efforts to get its $4.9bn acquisition of Suncorp’s bank across the line, including initiating talks with the Queensland government, formalising an integration team and lodging a submission with the competition regulator.
ANZ chief executive Shayne Elliott told The Australian the bank was at the “early stage” of the process with the state government and the Australian Competition and Consumer Commission, which need to sign off on the transaction.
A draft submission by the bank to the ACCC opens a period of engagement over four-to-six weeks, ahead of the document being finalised and released for consultation.
“ACCC is the most important for now,” Mr Elliott said, after handing down the bank’s annual profit results. “The Queensland government has a role to play … they want to see what’s in it for Queensland and that’s entirely appropriate.
“We’ve had only very initial discussions with them about how we will engage, so we’ll talk to them, we’ll go and make our case. We haven’t done that formally yet about why this is good for Queensland, and we’re really confident it can be.”
Mr Elliott said he believed the transaction wouldn’t hinder competition and would benefit consumers of banking services and employment in Queensland.
“We’re a big organisation and we’re going to get bigger if we’re successful here. We’ve got lots of things to build, to grow, to invest in and we can put some of that investment into Queensland.”
The deal would also require the green light from federal Treasurer Jim Chalmers, although he will await advice from the ACCC. ANZ announced the transaction in July and also kicked off a $3.5bn capital raising to help fund it.
ANZ has in recent weeks appointed Louise Higgins, who was finance chief for the Australian business, to lead the Suncorp integration and it aims to close the transaction in the second half of calendar 2023 if approvals are granted.
“We’ve got quite a significant team setting up at ANZ thinking about how do we get ready for once this is approved that we can get going as quickly as possible,” Mr Elliott said.
Asked about how he would manage the distraction of a large integration program and a challenging operating environment, given a markedly slowing economy, he highlighted the bank’s divestment drive had positioned ANZ well for a project of this size.
“We feel ready for it because we are simpler today. We’ve sold 29 businesses including life insurance, and retail Asia and dealer finance and share trading platforms … we’ve simplified back to our core and now we want one of those core businesses to get bigger so we’re very confident, we’ve got the skills to be able to take this on,” Mr Elliott said.
“It’s (the integration) not going to be easy, there will be all sorts of things to do, but I’m pretty confident we have the capacity and capability to do that.”
Suncorp’s regional banking rival Bendigo and Adelaide Bank is expected to raise some concerns about the tie-up between ANZ and the Queensland-based bank.
The ACCC will conduct detailed analysis to assess whether it believes the transaction would substantially reduce competition or whether the “likely public benefit” resulting from the slated deal would outweigh any public detriment.
Mr Elliott on Thursday said it was up to regulators and governments to “test the merits” of ANZ’s mooted purchase of Suncorp’s bank. He reiterated the attraction of the purchase given Queensland is the nation’s fastest growing state and that it would boost ANZ’s scale in the home loan market.
“In no way do we become anything close to being a dominant player in fact we wouldn’t be number one, we’d still be materially smaller than CBA (Commonwealth Bank),” Mr Elliott said.
“We think, however, that being a little bigger will make us a more effective competitor with CBA or Westpac or whoever it might be.”
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