Is Bank of Queensland’s input to ACCC over ANZ’s tilt at Suncorp a question of competition?
This column understands the Brisbane-based regional bank is putting the finishing touches on its submission on the deal, after receiving an extension from the Australian Competition and Consumer Commission.
The inside mail is that the submission will be lodged in coming days and highlight the transaction’s potential to notably reduce competition, given another regional bank will disappear.
Several parties received extensions to file their submissions late, following a January 18 ACCC deadline. Bendigo and Adelaide Bank, which has made its vehement opposition to the deal clear, is likely to be in that camp.
As well as the deal in question, there is also a view that if the ACCC clears ANZ to take out Suncorp’s bank, National Australia Bank may emerge as a suitor for BOQ or Bendigo Bank given limited growth options available to the biggest four players.
Talks for a marriage between BOQ and Bendigo Bank have happened sporadically over the years, and bankers are revisiting all combinations as the sector’s chess pieces are in play.
Patrick Allaway-led BOQ’s submission is said to – among other things – outline the competitive dynamics in the deposit market where some regional players have upped the stakes on the majors in sections of the market, predominantly to attract deposit funding.
That comes as the ACCC is probing pricing in the deposit market given the Reserve Bank’s aggressive rate tightening cycle which led to eight increases from May through to 2022’s end.
The banks were quick to pass on the increases in full to borrowers, but have only granted savers and deposit holders a much smaller portion of the rate rises.
BOQ hopes the prudential regulator’s new bank capital framework and the internationally agreed Basel III framework go some way to levelling the playing field on the funding cost advantage of the biggest players.
The regional bank is also likely to point out the operating environment ANZ is seeking to acquire Suncorp’s Bank in, as loan losses are expected to swell through this year.
So far, the ACCC has made public on its website just six submissions on the takeover of Suncorp’s bank, which implies not as much interest in the transaction as perhaps the parties were expecting. However, there may be a late flurry of documents lodged under the extension time frames.
The ACCC will make a determination on the ANZ-Suncorp Bank tie-up in June and the transaction also requires the federal government’s green light, and for legislation to be amended in Queensland.
The state government will no doubt be posturing to achieve some additional commitments from ANZ to waive the deal through.
Bendigo Bank chief Marnie Baker in December took a swipe at ANZ’s takeover of Suncorp’s bank, after her bank failed to get due diligence with its own offer.
“If successful, this acquisition will concentrate market share and hand a commanding position in the Queensland market to a big-four bank. It will further entrench Australia’s banking oligopoly,” she said at the time.
Submissions to the ACCC’s review by Rabobank Australia and consulting firm BMAgBiz separately raised concerns about how the deal would impact the agribusiness banking and mortgage markets, particularly in Queensland.
Suncorp banking chief Clive van Horen, in a heavily redacted witness statement, told the ACCC the majority of Suncorp’s agribusiness customers had a relationship with at least one other bank. He also said Suncorp’s relationship agribusiness model operated in a similar fashion to those at other lenders such as Rabobank, NAB and Commonwealth Bank.
The statement said Suncorp often only provided lending products to agribusiness customers.
People watch
Locally-owned artificial intelligence software firm elula has lured NAB’s head of group strategy, Colin Adamson.
Adamson – who is a couple of rungs below the NAB group executive level – joined elula this month as chief customer officer.
He has previously had stints at NatWest, Macquarie Bank, CBA, and AMP and has more than 20 years’ experience in financial services.
Elula developed proprietary technology to help predict when customers are at risk of leaving their lender or when banks should proactively engage with them on new products. Adamson’s start date coincides with a massive refinancing wave that is set to occur in 2023, as those who took out fixed-rate mortgages during the depths of the pandemic see their terms expiring and reverting to markedly higher variable rates.
Elula was started in 2017 by former CBA employees Josh Shipman and Sarah Russell, and counts about 20 bank and non-bank lenders as customers, including major and second-tier loan providers. Last year, a unit of PEXA agreed to acquire a stake of up to 25 per cent in elula.
Elsewhere, MLC Life Insurance has appointed former Westpac executive David Stephen to its board as an independent non-executive director.
Stephen, who replaces former IAG executive Andy Cornish on MLC Life’s board, will also chair the firm’s board risk committee. Cornish is retiring as part of a board renewal program.
Stephen is a 35-year banking stalwart having had stints as group chief risk officer and a member of the executive teams of Westpac, Royal Bank of Scotland and ANZ.
Financial services types will be watching to see whether NAB has any near-term plans to divest its residual 20 per cent holding in MLC Life, which is 80 per cent owned by Japan’s Nippon Life.
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Bank of Queensland’s submission to the competition regulator on ANZ’s $4.9bn tilt for Suncorp Bank will be interesting reading.