What the ANZ-Suncorp mega merger means for customers

The competition watchdog has given the green light to ANZ’s $4.9bn takeover of Suncorp Bank. Here’s what it means for bank and insurance customers, shareholders and local jobs.

The Australian Competition Tribunal has overturned the ACCC’s decision to block ANZ’s $4.9bn takeover of Suncorp Bank.

The landmark verdict grants ANZ the green light to acquire Suncorp’s regional banking arm and has the potential to reshape the banking sector landscape, as it sets a new precedent for future bank mergers.

What is the Suncorp ANZ deal?

The deal, first unveiled in October 2022, is now emerging as one of Australia’s longest-running friendly buyouts.

In August 2023, the Australian Competition and Consumer Commission ruled against it, finding it was not satisfied the deal was in the public interest but both Suncorp and ANZ appealed the decision.

On Tuesday the Australian Competition Tribunal (ACT) has overturned the ACCC’s decision to block ANZ’s $4.9bn takeover of Suncorp Bank.

The landmark verdict grants ANZ the green light to acquire Suncorp’s regional banking arm and has the potential to reshape the banking sector landscape, as it sets a new precedent for future bank mergers.

Summarising the ACT’s determination, deputy president and Federal Court justice John Halley said the tribunal concluded the merger would not be likely substantially lessening competition in home loans, or the business and agribusiness banking markets in Queensland.

How much is ANZ paying for Suncorp?

ANZ has offered $4.9bn to take over Suncorp Bank.

What does it mean for Suncorp banking customers?

In the short term nothing will change for Suncorp Bank customers, but cost cuts are on the horizon. ANZ has pledged to not cut any of the 49 Suncorp branches in Queensland or jobs for three years after the deal is approved, but industry watchers expect Suncorp branches outside Queensland may be on the chopping block as ANZ seeks to save costs on the deal.

ANZ is also looking to consolidate all its retail customers on ANZ Plus and may look to move its new Suncorp customers over in coming years

ANZ will also retain the Suncorp brand, for at least five years with an option to extend by a further two years.

What about ANZ bank customers?

ANZ has plans to pay for its Suncorp buyout by saving almost $260m a year in “cost synergies” which will largely be funded through cuts to the bank’s branches in markets both it and Suncorp already operate.

The deal may also see ANZ free up more cash to invest across the bank on new systems as it looks to spread the cost of ANZ Plus across more customers.

But ANZ will also be held to its assurances made to secure the deal, with the bank making a 10 year $35m financing “commitment” to Queensland.

Will there be a name change and where will the head office be?

The new entity will remain Suncorp Bank and will be headquartered in Brisbane.

ANZ has said it plans to run the bank as a separate business, with Bruce Rush who took over the running of Suncorp Bank in December last year the likely contender.

How will it impact my Suncorp or ANZ shares?

ANZ shares have traded down on the news of the deal after some investors had piled into the bank hoping if the deal fell over they would get a slice of the $4.9bn raised to fund the buyout of Suncorp Bank. Shares in ANZ were down 2 per cent by 11.30, after the announcement was made on Tuesday. Suncorp shareholders will be the beneficiaries of the $4.1bn net proceeds from the sale of the bank, with the Queensland insurer promising to return “the majority” of funds to investors. Suncorp will also enjoy $10m a year from ANZ for its branding for the next five years from the deal. Suncorp shares jumped on the news, up 6.72 per cent.

Is Suncorp insurance involved in the proposal?

The Suncorp insurance business will remain in Queensland under the deal, with the cash from the bank’s sale to go into funding the capital hungry operation.

Suncorp will now become an insurance only company after the sale of the bank.

Suncorp has also pledged to set up a Disaster Response Centre of Excellence under the terms of the deal, which will become an employment hub for the insurer’s workforce.

What local job guarantees has ANZ given?

ANZ has committed to investing in a new Tech Hub in Brisbane, with the bank planning to hire up 700 Queensland-based roles over five years.

In addition ANZ has said it will make no cuts to branches or jobs in Queensland for at least three years.

Suncorp will invest at least $19m in a Disaster Response Centre of Excellence in Brisbane as well as $2m in a Suncorp Regional Hub in Townsville with 120 new jobs.

What’s next?

The Federal Treasurer Jim Chalmers must now give approval for the deal under the Financial Sector (Shareholdings) Act 1998 (FSSA) for ANZ to proceed with the acquisition.

ANZ must also secure a change to the Metway-Merger Act through the Queensland Parliament, to remove a number of rules which apply to the bank.

Analysts expect the deal to be executed in the second half of 2024.

Bendigo Bank or the ACCC can appeal the decision.

The full reasons for the Takeovers Panel’s approval of the deal are expected to be released in 10 days.

The tribunal’s full determination and reasons will not be available for at least 21 days. It gave ANZ, Bendigo Bank, and the ACCC 10 days up seek redactions.

Bendigo & Adelaide Banks Protest the merger

The ACCC and Bendigo and Adelaide Bank had argued a Suncorp-Bendigo merger would be better for competition than the agreed deal with ANZ.
The tribunal heard, Bendigo could seek to appeal to the Federal court for review.

In a statement on Tuesday Bendigo said it maintained its view that the proposed merger will hurt competition, “leaving customers and communities worse off.”

Originally published as What the ANZ-Suncorp mega merger means for customers