Consumer groups say Indigenous support is at risk if ANZ’s takeover of Suncorp proceeds

Support to vulnerable indigenous people would be at risk if the proposed $4.9bn takeover is allowed, consumer groups say.

ANZ and Suncorp have until May 12 to respond to the regulator’s statement of preliminary views about the deal.

Effective support to vulnerable indigenous and First Nations people would be at risk if the proposed $4.9bn takeover of Suncorp Bank by ANZ is allowed, consumer groups say.

In a second submission to the competition watchdog, the Consumers Federation of Australia asked the regulator to consider the possible public detriment in regional areas arising from Suncorp losing nimbleness and innovation when supporting vulnerable groups.

“The concern we’re raising is that Suncorp Bank’s smaller size gives it greater capacity for innovation and to implement bespoke initiatives for vulnerable customers such as indigenous and first nations people without the internal bureaucracy that can be part of bigger organisations,” CFA chairman Gerard Brody said.

“Our experience is that bigger banks have higher levels of bureaucracy and don’t have the same conditions for innovation and trialling new approaches to addressing vulnerability.”

The CFA is the peak body for Australian consumer organisations and in its first submission it told the regulator the deal would be a disaster for competition and would increase the risk of co-ordinated bank conduct.

ANZ and Suncorp have said the transaction would create a larger and stronger bank that is better able to compete against the other majors, but banking analysts and consumer groups strongly disagree.

The Financial Counselling Association of Queensland noted Suncorp’s smaller size has allowed them to innovate successful support systems for vulnerable banking customers.

Similarly, the Indigenous Consumers Assistance Network says Suncorp is the only bank with a dedicated response to prisoner banking needs for customers in custody and is responsive to feedback about suggested improvements.

The groups fear this will be lost if Suncorp Bank is swallowed by ANZ.

“Suncorp Bank’s smaller size gives it greater capacity for innovation in areas like this, particularly as such businesses can have more efficient communication methods and can trial and implement initiatives without significant internal barriers,” the FCFA submission says.

“While ideally any such positive innovation addressing vulnerability would be maintained (and expanded) post-acquisition, CFA considers this is unlikely, as the smaller entity is likely to be integrated into its larger acquirer with greater bureaucracy, and the conditions for innovation and trialling new approaches to addressing vulnerability will be reduced.”

ANZ and Suncorp have until May 12 to respond to the regulator’s statement of preliminary views about the deal, which sought further information from industry and stated it was unconvinced that the benefits of the deal offset its public detriments.

Agricultural creditor CowBank, a long-term customer of Suncorp, that has tried but failed to secure funding from the big four banks, on Tuesday also told the regulator the big banks had no appetite to fund non-traditional or niche agricultural businesses like CowBank’s.

“In our view, the removal of Suncorp Bank as an independent or merged second-tier bank would reduce competition with the markets that Suncorp currently operates in,” managing director Rod Banks said in the submission.

In a further submission on Tuesday, challenger bank Judo Bank urged the regulator to consider the deal’s impact on competition on a state, regional or local basis, rather than on a national basis.

Judo has previously cautioned the detail could spur “substantial detriment” to small businesses and end customers.

The submissions come as the regulator extended its previous deadline to assess whether the deal would substantially lessen competition, by a month to July 28.

In a statement acknowledging the regulator’s deadline extension on Tuesday, Suncorp said its view continued to be that sale “is in the best interests of its customers, employees, shareholders, the state of Queensland and the nation, and will result in a stronger insurance and banking system in Australia.”

The ACCC is using compulsory powers to compel rival banks to provide it with detailed information about industry pricing, marketing, technology and customer switching to make its assessment. The deal requires ACCC sign-off as well as approval by the federal and state governments.