Already a subscriber?Treasurer Jim Chalmers has turned ANZ’s deal to buy Suncorp Bank into a once-in-a-generation chance for a big four bank to snap up a regional rival.
The conditions mirror those imposed on the past two major regional bank deals – Westpac/St George and CBA/Bankwest – that happened in the middle of the global financial crisis in 2008, which were also once-in-a-generation deals and were helped along by financial conditions at the time.It’s difficult to see how Chalmers’ approval leaves room for the big four banks to pick off any of the larger regional players, at least in this generation of banks, politicians and competition regulators.
Chalmers seems torn between ANZ buying Suncorp and letting it rip in the evergreen big four battle, and the likes of Suncorp being a competitor to the big four banks. Which competition does he really want to see?The big four are so much bigger that the Suncorps of the world are never going to have equal access to funding or generate the same sort of profits to be re-invested into technology systems, including cyber-fraud prevention.
Even if a big four bank were targeting off one of the smaller players, why would any big bank now have the risk appetite to try to do an ANZ/Suncorp?ANZ was brave enough to go there two years ago, realising the Steve Johnston-run Suncorp was finally done with its blended insurance and bank strategy. After years of trying, Suncorp just couldn’t make the model work; there were significant headwinds on both sides, and it wanted to focus on the bigger part.
To be clear, ANZ chief executive Shayne Elliott and his board still love the deal – it will mean about 20 per cent more customers and loans, and it will boost the bank’s presence in fast-growing south-east Queensland – but investors do not see it as a game changer. Elliott’s fight has only just begun. While he has won regulatory approvals and the Suncorp acquisition should complete late next month, the job now is to make it work for shareholders.
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