Suncorp’s failed $4.9bn sale to ANZ labelled a ‘sh-t show’

Suncorp insiders are appalled by the failure to offload its banking business to ANZ and believe the Queensland financial giant will shoulder a hefty cost.

Insiders at Suncorp have described the failure to offload its banking business to ANZ as a $4.9bn “sh.t show” which will prove expensive for the Queensland financial giant.

In an internal email sent to staff, Suncorp Group chief executive Steve Johnston said the ACCC’s move to reject the deal was “not the end of the road” as it worked to appeal against the decision before the Australian Competition Tribunal.

Mr Johnston told staff that he did not expect ultimate completion of the deal until the middle of next year.

“I understand this news is disappointing, particularly given the delays we have already experienced during the consideration process,” Mr Johnston said.

“I thank everyone who has worked so hard to get us to this point, noting this is not the end of the road.

Suncorp chief Steve Johnston. Picture: John Feder

“As outlined previously, the merger authorisation process allows for parties to refer the ACCC’s decision to the Australian Competition Tribunal, who will look at all of the evidence before the ACCC with fresh eyes before making its own determination.”

Frustrated staff have described the situation as a “sh.t show” and “mess” but Mr Johnston said that it “can’t afford to let this delay distract us from our important role in delivering for our customers who will be looking for us to support them through these difficult times”.

Mr Johnston said that together with ANZ, Suncorp would make its case to the tribunal, which is led by a Federal Court judge.

“We will engage with the tribunal in a constructive and respectful way,” Mr Johnston said.

“The board and I remain confident in the merits of the transaction and continue to believe the sale of the bank to ANZ is in the best interests of our employees, customers, shareholders, the state of Queensland and the broader public.”

ANZ chief executive Shayne Elliott with Suncorp boss Steve Johnston after announcing the deal last year.

Suncorp executives last month were believed to be preparing for the worst and the upper echelon of the group was bracing themselves for a possible “D (Denial) Day” from the ACCC.

The appeal to the tribunal is likely to take at least a year and require Suncorp to invest further in the bank for the foreseeable future.

The decision to offload the bank to ANZ was part of Suncorp’s strategy to free itself up to expand as a pure insurance group because the banking business was too small to compete against the big four.

Insiders on Friday said the banking operations needed a “make good” after it made $5.3bn in loans this financial year.

“There had been the expectation that ANZ would attend to the additional capital required for the bank, but now Suncorp will have to attend to it, dimming its overall financial prospects,” said one person with knowledge of the situation.

“It is like when you sell a house and the pool pump breaks the week before settlement but you say I will let the buyer fix that. In a bank, it’s keeping the platforms and system in ship shape condition.”

Mr Johnston told staff in the internal email that Suncorp “remains fully committed to supporting the bank as this process continues”.

“Subject to the tribunal providing approval and all subsequent approvals being received, we now expect completion by the middle of 2024. As outlined at my town hall in June, we have clear plans in place for both the bank and our insurance businesses and we must continue to focus on delivering to those,” he wrote.

“While the delays are frustrating. our businesses must keep moving forward. Our commitment to delivering for our customers, communities and shareholders does not change.”

Mr Johnston said further information would be provided next week to staff before Suncorp’s full-year results being released on Wednesday.

ANZ chief executive Shayne Elliott sent a note to staff not long after the ACCC’s announcement thanking “the team of dedicated people from across the bank who have been focused on the acquisition, including preparing our submission to the ACCC”.

“We are committed to seeing this through,” Mr Elliott said.

ANZ chief financial officer Farhan Faruqui and managing director respponsile for Suncorp integration Louise Higgins also spoke with the integration team – believed to number around a couple of hundred – to impress upon them there would be no let up on the sale preparations.

Originally published as Suncorp’s failed $4.9bn sale to ANZ labelled a ‘sh-t show’