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ANZ’s acquisition of Suncorp’s banking arm has been given the go-ahead by the federal Treasurer Jim Chalmers, two years after it was first proposed.
The federal Treasurer has approved the long-awaited acquisition of Suncorp Bank by major bank ANZ Group Holdings Ltd (ANZ).
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The merger is predicated on a number of conditions, including:
- ANZ will maintain its and Suncorp Bank’s regional branch numbers throughout Australia for three years.
- There will be no net job losses in Australia as a direct result of the acquisition for three years.
- ANZ will continue its ongoing best efforts to reach an agreement with Australia Post, on a commercial basis, to offer Bank@Post services to its customers.
- $15 billion of lending and other commitments for Queensland renewable energy projects and to support infrastructure development in preparation for the 2032 Olympic Games.
- $10 billion of new lending to support energy projects in Queensland, including bioenergy and hydrogen projects over the next decade.
- $10 billion of lending to support Queensland businesses over the next three years.
- Substantial home lending commitments in Queensland, including house lending targets of 3,000 homes and $350 million in housing‑related lending.
These conditions have been brought in since ANZ announced it was acquiring Suncorp two years ago. While the merger was initially blocked by the ACCC amid competition concerns, these were overruled by the Australian Competition Tribunal earlier this year.
However, completion of the acquisition remains subject to the commencement of the Queensland State Financial Institutions and Metway Merger Amendment Act, which upon proclamation will amend the Metway Merger Act to fulfil the remaining condition to facilitate the proposed acquisition.
Once this occurs, completion of the acquisition is expected to occur at the end of July.
‘It would not be in the national interest to prohibit this transaction’: Chalmers
Announcing his decision, Treasurer Chalmers said: “I took seriously the competition concerns raised by the ACCC as part of its decision on 4 August 2023, but the Australian Competition Tribunal ultimately concluded it would not be likely to have the effect of substantially lessening competition. As the ACCC has since publicly acknowledged, the Tribunal’s decision demonstrates the checks and balances of an administrative merger approval process.
“This was an on‑balance call, consistent with advice I received from Treasury and regulators and following nearly two‑years of scrutiny and input from industry, the Finance Sector Union, the Queensland Government and other stakeholders... I received clear advice from Treasury, incorporating views from APRA, ASIC, the ACCC and Department of Home Affairs, that it would not be in the national interest to prohibit this transaction.
“I also took into account the unique features of this proposal, including the fact that Suncorp is one of the few remaining combined bank and insurance companies in Australia. The proposal will allow Suncorp to focus on its insurance businesses at a time when the sector faces a range of specific challenges, including access and affordability.
“To ensure the transaction is in the national interest, I have decided to approve this proposal subject to strict conditions.
“The conditions I have imposed are legally‑binding and ensure Australians continue to have access to vital banking services, employees aren’t left behind, and Queensland and Australia benefit from the transaction.”
ANZ, Suncorp CEOs welcome ‘significant milestone’
Speaking of the decision, ANZ CEO Shayne Elliott said: “This is a significant milestone in our plans to expand our presence in Queensland and bring the best of ANZ to Suncorp Bank customers.
“Queensland is thriving. With strong economic growth, high workforce participation and more interstate migration than any other state or territory, we’re excited about the opportunities Queensland presents for ANZ and our customers.
“We are another step closer to welcoming Suncorp Bank customers into the ANZ Group. Suncorp Bank customers will continue to receive the same great service, from the same exceptional Suncorp Bank staff.
“Over time, we’ll make available to them ANZ’s leading technology, giving them access to the very latest in banking services.”
Suncorp Group has agreed to waive its $10 million per annum brand licensing fee that ANZ was to pay for a period of five years and will contribute to some additional integration costs.
Suncorp Group CEO Steve Johnston said: “Following completion, Suncorp will focus on meeting the evolving needs of insurance customers and addressing increasingly complex challenges such as climate change and affordability.
“This decision also brings us another step closer to the delivery of the jobs and investment package Suncorp agreed with the Queensland government as part of the sale process, with benefits not only for Queensland but across Australia and New Zealand more broadly.”
Looking to the future, Elliott said: “[W]e’re pleased to be one step closer to this strategically important acquisition which will allow us to add scale to our retail and commercial businesses while enabling ANZ to more effectively compete in the Australian market.
“Our plans for the integration are well advanced and we are confident of the substantial benefits that will flow.”
[Related: ANZ granted unconditional merger authorisation to buy Suncorp Bank]
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