The Australian Competition Tribunal quashed the Australian Competition and Consumer Commission’s (ACCC) August 2023 decision to block the takeover due to concerns it would “further entrench an oligopoly market structure” within the home loan sector.
The decision will allow ANZ to move further into the home loan market while the smaller bank moves its focus to insurance.
Delivering the judgement on Tuesday (20 February) morning, Justice John Halley – together with Dr Jill Walker and Diana Eilert – determined the proposed acquisition would “not likely have the effect of lessening competition in the home loans market”.
The tribunal also concluded the takeover would “not have a meaningful impact on the major banks coordination”, particularly as Suncorp is not a “strong competitor” in the home loan market.
They said the proposed acquisition would “constitute real and tangible benefits to the public” and represent a “saving of real resources”.
“The tribunal is satisfied that the proposed acquisition represents a net public benefit because any detriments arising from any reduction in competition are unlikely to be sufficiently certain and significant,” the members determined.
Justice Halley added they were satisfied ANZ will remain constrained by competitors like NAB and Rabobank.
ANZ had entered an agreement to purchase Suncorp Bank in July 2022.
Commenting on the tribunal’s decision, ANZ chief executive officer Shayne Elliot said it was a “significant milestone”.
“However, we still have further conditions to meet. We remain committed to completing the acquisition as soon as possible once all sale conditions are met,” he stated.
“Suncorp Bank is a high-quality business with a strong team and excellent customer base, and we look forward to bringing them access to the best of ANZ, including our platforms and technology. We strongly believe that the acquisition presents significant opportunities for ANZ, Suncorp Bank and our customers, as well as major public benefits including for Queensland.”
Completion of the acquisition remains subject to legislative amendments by the Queensland Parliament and approval by the Federal Treasurer.
Suncorp Group chairman Christine McLoughlin also described the decision as a “big win” for Queensland, and the group’s CEO, Steve Johnston, said the sale would result in Suncorp becoming a dedicated Trans-Tasman insurance company.
He explained: “Our ability to meet the rapidly evolving needs of insurance customers and address increasingly complex challenges such as climate change and affordability will be significantly strengthened through dedicated investment as a pureplay insurance company.”
However, in its response to the tribunal’s decision, Bendigo and Adelaide Bank stated that the proposed merger “will lead to a lessening of competition”, leaving customers and communities worse off.
“Bendigo and Adelaide Bank is proud to be an independent regional bank. We remain focused on our strategy and our purpose of feeding into the prosperity of our customers and their communities, not off them,” it stated.
The bank had previously opposed the application, submitting the takeover would consolidate ANZ’s market position and structural advantages it has as a major bank, “without engaging in competition, to the substantial detriment of competition” in the home loans markets.
However, the tribunal has rejected the “coordinated effort” of both Bendigo and the ACCC to have the acquisition opposed, ruling instead any market increase would not have a meaningful impact on the degree of likelihood of the major banks engaging in successful coordination.
