Judo boss Joseph Healy slams ANZ’s bid for Suncorp Bank

Judo Bank co-founder Joseph Healy says ANZ Bank’s $4.9bn bid for Suncorp Bank would inevitably hurt competition and lead to poorer consumer outcomes.

Joseph Healy, co founder of Judo Capital. PIcture: Britta Campion / The Australian

Judo Bank co-founder Joseph Healy has slammed ANZ Bank’s proposed $4.9bn takeover of Suncorp Bank, saying it would diminish competition, lead to poorer consumer outcomes and “simply cannot be in the public interest”.

In an opinion piece for The Australian, Mr Healy said the deal suggested that lessons from the financial services royal commission had not been learnt.

“The primary cause of the significant and systemic conduct issues exposed at the royal commission … was that Australia does not have a competitive banking market,” he said.

“Yet here we are, less than five years on, watching a major bank potentially snap up one of Australia’s few independent regional banks and with three of the four new banking licenses granted post-royal commission having been handed back.

“The proposed ANZ-Suncorp deal simply cannot be in the public interest.”

ANZ unveiled its agreed bid for Suncorp Bank last week, with both sides spruiking the deal as a boost for competition.

The Australian Competition and Consumer Commission closely scrutinises any takeover by the four major banks, particularly after Commonwealth Bank’s absorption of Bankwest and Westpac’s merger with St George Bank in the depths of the financial crisis.

ANZ chief executive Shayne Elliott said last week that he expected to get a “fair hearing” from regulators, as chairman Paul O’Sullivan claimed there were competition benefits.

“Combining with Suncorp gives us a chance to increase scale and our goal is to drive strong growth in Queensland by attracting additional investment, additional lending and additional finance,” Mr O’Sullivan said.

“Overall it will result in much stronger competition and choice for Queensland consumers.”

In a bid to keep regulators on-side, ANZ promised no Suncorp branch closures or net job losses in Queensland for at least three years.

The bank also committed to $25bn of lending to the state’s energy transition and infrastructure projects for the 2032 Olympics in Brisbane.

Judo, a specialist SME lender, is the sole survivor of a string of four neobank start-ups, with Xinja and Volt handing back their banking licenses to the prudential regulator and 86 400 acquired by National Australia Bank.

Mr Healy, a former head of NAB’s business bank, comprehensively rejected ANZ’s claim of competition benefits from the Suncorp transaction.

“History suggests that the proposed ANZ takeover of Suncorp will leave a vacuum of support for local SMEs,” he said.

“The ramifications for Queensland SMEs, which are barely mentioned in the debate, are catastrophic.

“Such a move is completely counterintuitive to what SMEs truly need in a post pandemic economy, namely: experienced banking support and funding to grow their business.”

There was no denying, he said, that the demise of two neobanks and the sale of another to a major bank was “deeply regrettable”.

However, their founders should be commended for their willingness to innovate and tenacity, because building a bank from scratch was an “extremely challenging” process.

“To succeed, a new bank must be underpinned by three ‘must-haves’: firstly, strong and credible shareholders with sufficient capital to support growth; secondly, a clear and compelling business case that is economically viable and unique; and thirdly, an experienced management team in place that understands all aspects of banking.

“All three ‘must-haves’ are the foundations that every new bank requires to succeed.

“If there are weaknesses in any of the three areas, the business will fail.”

The ACCC has said it will start a review of the proposed acquisition after receiving an application for merger authorisation from ANZ.

The review, it said, would involve extensive consultation with market participants and interested parties, including consideration of the likely competitive impact and any public benefits.

The ACCC can grant merger authorisation if the deal is unlikely to result in a substantially lessening of competition, or the public benefit is likely to outweigh the public detriment.