Why ANZ deal should quickly get ticked off
THERE is no good reason for any regulator – or government – to stop ANZ’s purchase of Suncorp’s bank. Indeed, there is no good reason – apart from regulatory ineptitude – for any serious delay in what should be a speedy approval process.
The deal requires the approval of the Queensland and federal governments – actually, specifically the federal Treasurer, Queenslander Jim Chalmers – and the competition regulator, the ACCC.
The ACCC is easily the last to be putting any hurdles in the way of the buy. Not after it ticked through the far more clearly anticompetitive purchase by Westpac of St George Bank.
St George was easily the biggest and most potent non-big four bank – indeed, it was regarded as the closest thing we had to a ‘fifth major’ and was particularly strong in Westpac’s home state NSW. The ACCC allowed Westpac to really ‘bulk up’ in our biggest and most important state – becoming in the process easily the second-biggest home lender nationally behind the mega-CBA – back when, in 2008, bulking up still delivered competitive advantages.
There is no way it could object in 2022 to ANZ marginally increasing its national mortgage share (from 13 per cent to 15.5 per cent) and bulking up, at least initially, only in Queensland.
More fundamentally, whether the ACCC is going to end up saying ‘yea’ or ‘nay’, it should – it must – do it quickly. If it doesn’t know by now what the competitive banking issues are, and more importantly what it should decide about them, it really needs to find another day job. Two competitive boats have long since sailed.
A few decades ago one might have hoped for some or all of the regionals to build a ‘fifth major’. The ACCC buried that hope by allowing big four banks to progressively pick off the regional plums – with the ‘plumiest’ St George.
The second was tech and the explosion of online banking, with a bit of help from Covid. Forget about branches, even ATMs are now antiques. ‘Customer loyalty’ is long since gone, driven by the banks being disloyal to their customers. The idea of either depositors or home loans being ‘sticky’ got left in the 20th century.
In short, there are zero – repeat, zero – competition issues raised by the deal.
The ‘perfect Queensland merger’ alternative, with BoQ, is a non-starter. So also with Bendigo. They can’t pay big bank cash and they would be merging into a mega-mess. Any idea that the Queensland government might have of maintaining a Queensland-headquartered bank is a fantasy. The choice is Melbourne or Sydney – and keeping a muchstrengthened, Brisbanebased Suncorp Insurance.
Finally, there’s a rather interesting twist to the deal. It’s a Suncorp non-executive director, who signed off on selling the bank to ANZ, with one of the most memorable names in down under business – Elmer Funke Kupper.
Why so? Because he ‘could have been’ CEO of none other than ANZ – albeit, not now but a dozen years or so ago. In the ‘naughties’, EFK was one of the leading internal candidates – in his own mind, the leading candidate – to succeed then ANZ chief John McFarlane.
But then ANZ chairman Charles Goode opted for an outsider, Mike Smith from HSBC, who promised to deliver an Asian growth strategy. So EFK ‘opted out’ of ANZ – to successively be CEO of Tabcorp, Echo and the ASX, gambling companies all; landing more recently as a non-exec at Suncorp just in time for the ANZ deal.
Both Smith and the ‘Asian growth’ also would depart ANZ; then came Shayne Elliott and a seeming ‘strategy’ of running fourth in a field of four.
McFarlane would return as the ‘post-Hayne’ new broom chairman of Westpac; and Goode now heads Flagstaff Partners, which advised ANZ on the Suncorp deal. It’s a small world.