Suncorp argues the sale of its bank to ANZ would not reduce competition or impact the level of service provided to customers.
In its response to the Australian Competition and Consumer Commission’s statement of preliminary views, in which the regulator warned it was not convinced on the merits of the bank sale, Suncorp has said the banking sector was facing a shifting business landscape which threatened the market shares of all incumbents.
Suncorp said the changes were related to issues of funding, scale, and competitiveness, warning there was no alternative sale counterfactual and no reasonable likelihood that Bendigo Bank could acquire Suncorp Bank.
“The proposed acquisition, a cash sale, will provide Suncorp with an opportunity to be a stronger insurer,” Suncorp said.
In its submission, Suncorp argued brokers played a significant role in driving new lending for its bank business.
The bancassurance group claimed the acquisition of its Queensland-based bank would not “cause a price increase or diminution in quality in any material aspect”.
In its response to ANZ and Suncorp, the ACCC said it held concerns over the impact on the agribusiness market in Queensland if Suncorp were to be snapped up by its heavyweight rival.
But Suncorp said there was strong competition in the agribusiness market and NAB and Rabobank were key competitors.
“There is plenty of choice in agribusiness for customers,” Suncorp said.
Suncorp also attempted to trash claims from Bendigo bank, that if it had not been denied by Suncorp’s Queensland management it would have been the obvious suitor to merge with the bank.
But Suncorp said there was “no real commercial likelihood” of the counterfactual acquisition or merger by “any other mid-tier bank”.
Suncorp CEO Steve Johnston said the sale of the group’s bank would not lessen competition. John Feder/The Australian.
Suncorp Group chief executive Steve Johnston said the company’s response showed there was “no real commercial likelihood of any alternative transaction”.
“The proposed transaction with ANZ is in the best interests of our customers, shareholders, employees and communities,” Mr Johnston said.
“Our response also details why we believe the proposed transaction with ANZ would not substantially lessen competition or have a detrimental impact on the competitive environment for customers.”
ANZ landed its bid for Suncorp in July last year, in a cash deal valuing the bank at $4.9bn
The takeover would see ANZ regain a swath of the share of the home lending market that fled the bank in the past few years.
But in an attempt to keep regulators and the Queensland government onside, ANZ has committed to no Suncorp branch closures or net job losses in the state for at least three years.
However, ANZ has also said it expected to bank $260m in cost savings after a three to four-year separation period.
The sale requires sign-off from the ACCC, as well as the Queensland government.
Mr Johnston said the Queensland government was working constructively over the deal, noting the sale of the bank and funding of the insurance operation “will deliver significant public benefits to Queensland and Australia”.