The competition regulator has declined to give ANZ permission to acquire Suncorp’s banking arm in a $4.9bn transaction that would have shaken up the banking industry.
The Australian Competition and Consumer Commission said on Friday the proposed acquisition would “further entrench an oligopoly” in a sector already dominated by the four major banks.
It wasn’t satisfied the transaction would not lessen competition in the supply of home loans, small to medium enterprise banking in Queensland and agribusiness banking in Queensland.
“These banking markets are critical for many homeowners and for Queensland businesses and farmers in particular,” ACCC deputy chair Mick Keogh said.
“Competition being lessened in these markets will lead to customers getting a worse deal.”
Second-tier banks such as Suncorp Bank were important competitors against the major banks, he said, especially because barriers to new entry at scale into banking are very high.
“Evidence we obtained strongly indicates that the major banks consider the second-tier banks to be a competitive threat,” Keogh said.
“The proposed acquisition of Suncorp Bank by ANZ would further entrench an oligopoly market structure that is concentrated, with the four major banks dominating. It also limits the options for second-tier banks to combine and strengthen in a way that would create a greater competitive threat to the major banks.”
Keogh said the regulator thought it was more likely there’d be co-ordination between the four major banks in the supply of home loans if Suncorp Bank becomes part of ANZ.
ANZ and Suncorp have the option of appealing the matter to the Australian Competition Tribunal or the Federal Court.
“We are naturally disappointed and disagree with the ACCC’s decision,” ANZ CEO Shayne Elliott said in a statement.
“We are closely reviewing the determination and will seek an independent decision through the avenues of review available to us.
“We believe the acquisition will improve competition, which will benefit Australian consumers, particularly in Queensland. All of the relevant markets are intensely competitive and will continue to be intensely competitive after the acquisition.
The treasurer, Jim Chalmers, said the government respected the independence of the ACCC and wouldn’t comment.
The deal was first announced back in July 2022.
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