Steve Johnston, Suncorp CEO, has stated previously that selling the bank will allow the Queensland-based financial services group to focus on its larger insurance business, one of the leading players in the personal lines market. However, the competition watchdog raised several issues and concerns in a statement of preliminary views released today, including impacts on SME and agribusiness banking, home loans, and insurance.
ACCC Doubts Improvement in Suncorp Insurance Business
The ACCC is skeptical that the sale will result in Suncorp becoming a “stronger insurer” and highlighted that Suncorp has operated the dual insurance-banking model for many years, with positive outcomes for the business. It also raised questions about whether the proposed acquisition would improve the overall performance of Suncorp’s insurance business compared to a future without the proposed acquisition.
“The ACCC is also considering the weight that should be given to any such benefits, noting that the extent to which they might pass through to insurance customers is unclear,” the statement says.
Response from Suncorp and ANZ
Suncorp and ANZ responded to the ACCC statement, saying that they will address the concerns raised and are committed to seeing through an agreed transition plan for Suncorp’s banking arm. Suncorp maintains that the sale of Suncorp Bank to ANZ is in the best interests of its customers, employees, shareholders, the state of Queensland, and the nation, and will result in a stronger insurance and banking system in Australia.
ANZ CEO Shayne Elliott says the bank will examine the ACCC's preliminary views in detail and address the matters raised.
Final Decision from ACCC
ACCC is seeking submissions to the points raised in the statement of preliminary views before making its final decision, which is scheduled for June 12, on whether to approve the deal. Approvals from the Queensland Government in relation to the State Financial Institutions and Metway Merger Act, as well as from the Federal Treasurer, are also required.
“Our statement of preliminary views outlines the key competition issues we’ve identified to date,” said Mick Keogh, Deputy Chair of the ACCC. “Before we finalise our views, we welcome further submissions from stakeholders and consumers alike on the issues raised.”
Submissions to Public Consultation
The ACCC received several submissions to the public consultation, with many raising concerns over the deal. Aon supported the divestiture, believing that Suncorp will be “more focused” on the insurance industry if it sells banking arm, which will help to drive innovation in the insurance sector to address unmet client needs.
The closing date for submissions is April 18.
