Federal Government Permits Sale Of Suncorp Bank To ANZ

Australian Treasurer Jim Chalmers has approved ANZ’s proposal to acquire Suncorp Bank, subject to several conditions.

Chalmers said the decision was an “on‑balance call” consistent with advice he received from Treasury and regulators following nearly two‑years of scrutiny and input from industry, the Finance Sector Union, the Queensland Government and other stakeholders.

“Following this lengthy and robust process, I received clear advice from Treasury, incorporating views from APRA, ASIC, the ACCC and Department of Home Affairs, that it would not be in the national interest to prohibit this transaction,” he said.

“I took seriously the competition concerns raised by the ACCC as part of its decision on 4 August 2023, but the Australian Competition Tribunal ultimately concluded it would not be likely to have the effect of substantially lessening competition. As the ACCC has since publicly acknowledged, the Tribunal’s decision demonstrates the checks and balances of an administrative merger approval process.

“I also took into account the unique features of this proposal, including the fact that Suncorp is one of the few remaining combined bank and insurance companies in Australia. The proposal will allow Suncorp to focus on its insurance businesses at a time when the sector faces a range of specific challenges, including access and affordability.”

Federal conditions attached to the approval include:

  • ANZ will maintain its and Suncorp Bank’s regional branch numbers throughout Australia for three years.
  • There will be no net job losses in Australia as a direct result of the acquisition for three years.
  • ANZ will continue its ongoing best efforts to reach an agreement with Australia Post, on a commercial basis, to offer Bank@Post services to its customers.

Suncorp Group Chairman Christine McLoughlin said the company’s board is committed to returning the majority of net proceeds to shareholders following completion of the sale.

“Timing of the planned capital return to shareholders is dependent on finalisation of the completion accounts, receipt of a ruling from the Australian Tax Office, and approval from the Australian Prudential Regulation Authority. We expect the capital return will occur in the first quarter of the 2025 calendar year,” said McLoughlin.

According to Suncorp CEO Steve Johnston, the approval is an important step towards Suncorp Group becoming a dedicated Trans-Tasman insurer.

“This decision also brings us another step closer to the delivery of the jobs and investment package Suncorp agreed with the Queensland Government as part of the sale process, with benefits not only for Queensland but across Australia and New Zealand more broadly,” added Johnston.

Given the conditions attached to ANZ’s FSSA approval, Johnston said Suncorp had agreed to waive the $10 million-per-annum brand license fee that ANZ was to pay for a period of five years.

ANZ Chief Executive Officer Shayne Elliott said the approval marks a significant milestone in ANZ’s plans to expand its presence in Queensland.

“Looking ahead, we’re pleased to be one step closer to this strategically important acquisition, which will allow us to add scale to our Retail and Commercial businesses while enabling ANZ to more effectively compete in the Australian market. Our plans for the integration are well advanced and we are confident of the substantial benefits that will flow,” he added.