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Members of the broking community will be keeping a close eye on how the ANZ-Suncorp merger impacts mortgage competition.
On Friday (28 June), the federal Treasurer announced that ANZ’s acquisition of Suncorp’s banking business could proceed (albeit with conditions).
Should the merger proceed as planned at the end of July, the acquisition would make ANZ the third-largest mortgage lender in Australia.
Members of the broking industry have tentatively welcomed the decision but said that they will be keeping a keen eye on whether competition in the lending landscape will be impacted.
What do the associations think?
Speaking to The Adviser following the announcement, Peter White AM, the managing director of the Finance Brokers Association of Australia (FBAA), said: “While it is concerning to lose a larger regional bank like Suncorp, I am taking a ‘wait and see’ approach with this as we don’t really know the ultimate impact.
“The biggest challenge for both banks will be integrating the two systems, which may impact customers.”
White added that while industry didn’t want to lose second-tier banking competition, he said “there is still plenty of competition in the marketplace” and that “other lenders may step up and fill the void”.
The CEO of the Mortgage & Finance Association of Australia (MFAA), Anja Pannek, said while she was “unsurprised” by the approval given the “thorough consideration of the merger” by Treasury, regulators, and state and federal governments, she added that she believed the two lenders would likely continue supporting the broker channel.
Pannek said that more than 74.1 per cent of all home loans are written by mortgage brokers, so she was “confident that both banks will continue to invest in the broking channel because to do so is to invest in where Australians are choosing to go for support for their lending needs”.
“Should this not be the case, we will have something to say,” the MFAA CEO said.
“With commitments by ANZ in Queensland – including $10 billion of lending to support small businesses in the next three years, house lending targets of 3,000 homes and $350 million in housing-related lending – mortgage and finance brokers are well-positioned to facilitate a significant majority of this lending to their Queensland customers.”
What do brokers think?
Tanila De Silva, broker director of Tanz Finance, said he was concerned by the move.
“Personally, I am of the opinion that the further away we are from a monopoly with an economy’s finances, the better,” he said.
“So, this merger itself I feel is more a power move to increase the bottom line rather than benefit the end consumer.
“While large bank mergers can bring about some benefits, such as increased resources and potentially better technological advancements, the disadvantages for consumers often outweigh these benefits. Reduced competition, higher fees, less personalised service, and potential branch closures are significant concerns.
“Consumers may find themselves with fewer choices, higher costs, and a banking experience that feels less tailored to their needs. These factors can lead to overall dissatisfaction and a feeling of being underserved by the financial institutions that are meant to support them.”
However, Aaron-Christie David, the broker director of Sydney-based brokerage Atelier Wealth, said he hoped the two brands would remain in market, offering choice.
“As a broker, we love the choice of different lenders for our clients. More choice means more competition, more credit policies and more support for our brokerages…” David said.
“If you want to see a multibrand strategy work well for brokers and consumers, I’d look at the Bankwest and Commonwealth Bank integration. Bankwest has a certain brand, specific policies and a great team all the way from Ian Rakhit through to their BDM team. It’s very similar to the approach Suncorp has with Troy Fedder who has created a great broker and client experience with a wonderful team of BDMs.
“I welcome this decision and now it comes down to how well the merger is managed with minimal disruption to the client experience, I truly believe it’s good for our industry.”
Queensland-based brokers have generally been supportive of the merger of the Queensland-headquarted bank into ANZ Group, too.
Qld brokers generally optimistic
Adam Bradley, finance specialist & director at Brisbane-based brokerage Emerge Finance, said he thought the ANZ/Suncorp merger was “a strong arrangement for both brands”.
According to Bradley, Suncorp would benefit from having the backing of a large big four bank, including “associated borrowing capabilities/buying costs/volume/margins and infrastructure”, as well as “potentially benefiting from some additional policy enhancements”.
ANZ, meanwhile, would benefit from “a stronger offering in QLD, which is due to be one of the powerhouse locations for property in the next eight to 10 years (and ongoing) in the lead-up to the Olympics”.
Bradley said: “Suncorp has a great brand and recognition here in QLD and have a really good offering for borrowers with an extensive branch network and local team. QLD borrowers love supporting QLD brands, and we’ve had some great outcomes for clients recently with Suncorp with their products & quick turnaround times.”
Similarly, Scott Beattie, broker director of Queensland-based brokerage Cube Central (and a former employee of Suncorp) said he believed both brands could benefit.
“The merger should bring some benefits to Queensland with the Treasurer’s imposed conditions (i.e. no branch closures and/or job losses – at least for three years, anyway!). From a lending front, Suncorp have gone in leaps and bounds to offer a very competitive, common sense lending product with great rates to match,” Beattie said.
“ANZ, of course, have their niches so hopefully the merger will take the best of both worlds and make them a very strong offering to our clients in the future.”
He said that he would be keen to understand whether the banks would operate two brands or consolidate the offerings down.
“As a broker, I am mindful that mergers potentially reduce the competition in the market place so that’s probably my biggest concern in the long term,” he said.
“It will be interesting to see if how Suncorp branches will work or will they dual brand like we have seen with Westpac and St.George.”
What do you think about the ANZ-Suncorp merger? Let us know in the comments below!
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