By Lucas Baird and John Kehoe
Federal Treasurer Jim Chalmers is the last hurdle for ANZ to overcome in finalising its $4.9 billion takeover of Suncorp’s banking business, after Queensland’s parliament changed laws allowing the deal to proceed late on Friday.
Financial Sector Union president Wendy Streets said the union was against industry consolidation that may hurt competition, but “given the regulators and the appeal process, we don’t think the treasurer has much room to move on approving this one”.
“We are therefore looking for job security and commitment for our ANZ members in line with [the] three-year commitment for Suncorp staff,” she said.
It has been nearly two years since ANZ bid for Suncorp’s banking division. Dr Chalmers, a Queenslander with close ties to the state Labor government, has been formally considering the takeover of the Brisbane-based bank since April.
With advice from Treasury, he is expected to soon make his “national interest” determination on the acquisition. The dominant part of Suncorp’s business, insurance, will remain headquartered in Queensland and won’t be sold.
Weighty issue: Jim Chalmers must find the deal is in the national interest, with the advice from Treasury and APRA. Oscar Colman
ANZ is the smallest of the four major banks and is trying to bulk up its market share in mortgages, which is a bit over 13 per cent. Suncorp has just over 2 per cent, but is larger in Queensland. A merged bank would be the third-largest by mortgage market share, overtaking National Australia Bank.
The deal has been delayed since it was announced in July 2022, initially blocked by the competition watchdog last August, but then overturned on appeal in February.
Dr Chalmers’ decision is the last major hurdle in the long-running saga, and there was speculation in the banking sector at the weekend that the announcement of a new review into the competitiveness of smaller and mid-tier banks was smoothing the way for the merger’s approval.
There is no time limit for his final call to be made, but a Suncorp source believed a decision was close.
Queensland’s parliament on Friday amended legislation, which had required Suncorp’s headquarters, chairman and senior management – including treasury, information technology, marketing, credit control and human resources – to be in the state.
The rules date to 1996 when Suncorp was formed by the merger of the former Queensland State Government Insurance Office and Metway Bank.
Deal ‘good for state’: Dick
Queensland Treasurer Cameron Dick has long supported the merger. He said the government had “delivered on our commitment that we would only support the deal if it was good for Queensland”.
ANZ and Suncorp have given the Queensland government commitments to target $35 billion in lending to the state for green energy projects, and 2032 Olympics infrastructure. ANZ will initially run Suncorp’s banking operations as a separate entity, but eventually seek to subsume the business into a single, authorised deposit-taking institution, like it did with National Bank in New Zealand.
“The number of skilled jobs in Queensland’s financial services sector will grow as a result of this legislation, both in Brisbane and in our regions,” Mr Dick said.
While the Australian Competition and Consumer Commission pushed to block the merger, its ruling was thrown out on appeal after a tribunal found the emergence of mortgage “maverick” Macquarie had boosted competition between the major banks.
The ACCC said it would not appeal the decision.
Analysts have said it was unlikely Dr Chalmers would kill the deal.
At the weekend, the federal government said it would also legislate to force banks to tell customers of interest rate changes, and making it easier to switch lenders with direct consumer access to discharge forms.
Regional banks welcome review
It will also order the Council of Financial Regulators and the ACCC to review challenges faced by mid-tier banks, which are squeezed by growing capital and regulatory costs.
Bendigo & Adelaide managing director Marnie Baker said she welcomed the new measures. “We look forward to discussing new ways to level the playing field for all small- and medium-sized banks,” she said.
“We are a genuine and compelling alternative to the major banks … but reform to further increase competition is needed.”
Australian Banking Association chief executive Anna Bligh said the new regulations around deposit pricing would lead to more transparency.
“It is already the case that banks have to disclose certain information to their customers. I think these new regulations will just mean that they need to do it in a more prominent and easier to access way,” she said.
“If you want to get the price, you need to shop around. Australians are already shopping around like never before, and I think these changes can make it easier for them.”
Dr Chalmers is no stranger to the prospect of an ANZ takeover of Suncorp’s banking arm. He was a senior adviser to then-federal treasurer Wayne Swan during the 2008 global financial crisis, when ANZ almost acquired the beleaguered Suncorp bank and wealth management business for $3.4 billion.
