Conditions include no branch closures and no job losses for three years
The federal government has provided formal approval to ANZ’s purchase of Suncorp Bank, leaving only the commencement of Queensland legislation as the final step remaining before the deal can occur.
Federal Treasurer Jim Chalmers (pictured above left) announced on Friday, June 28, that the acquisition can proceed subject to enforceable conditions.
These include no regional ANZ and Suncorp Bank branch closures Australia-wide for three years, no changes to the total number of Suncorp Bank branches in Queensland for at least three years and no net employment losses across Australia for three years due to the transaction.
ANZ’s proposal has faced a number of hurdles since the major bank signed an agreement two years ago to buy the Queensland-based bank for $4.9 billion.
Among the barriers were the ACCC’s rejection of the deal due to its concerns about reducing competition, Suncorp Bank staff’s fear about job cuts, and even a bid from Bendigo and Adelaide Bank to buy the bank instead of ANZ.
However, the wheels are now firmly in motion for the acquisition deal to be completed, following the Australian Competition Tribunal’s decision to authorise the proposal and now Chalmers’ seal of approval.
All that remains is for the Queensland government’s State Financial Institutions and Metway Merger Amendment Act to be proclaimed, which will amend the Metway Merger Act and is the final piece of the regulation puzzle. ANZ expects the acquisition to be complete at the end of July.
Treasurer approves acquisition of Suncorp Bank
Chalmers said his decision to allow ANZ to acquire full ownership of Suncorp Bank, subject to enforceable condition, came after “careful consideration, much deliberation and consultation, and a long and thorough process”.
“This was an on‑balance call, consistent with advice I received from Treasury and regulators and following nearly two years of scrutiny and input from industry, the Finance Sector Union, the Queensland government and other stakeholders,” Chalmers said.
He said the proposed acquisition had been subject to ongoing examination by regulators and the Treasury since it was announced on July 18, 2022, and has been under formal consideration under the Financial Sector (Shareholdings) Act 1998 (FSSA) since the application was lodged on March 26, 2024.
“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.
“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.”
Chalmers said as the ACCC had since publicly acknowledged, the Tribunal’s decision demonstrated the checks and balances of an administrative merger approval process.
He also considered the unique features of the proposal, including the fact that Suncorp was 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.”
To ensure the transaction was in the national interest, Chalmers said he decided to approve this proposal subject to strict conditions, which were legally binding, and “would ensure Australians continue to have access to vital banking services, employees aren’t left behind, and Queensland and Australia benefit from the transaction”.
Conditions on the acquisition
The federal government and Queensland government have imposed a number of strict conditions on the ANZ/Suncorp Bank deal in terms of bank presence, including:
- no changes to the total number of Suncorp Bank branches in Queensland for at least three years;
- no regional ANZ branches closed Australia-wide for three years;
- no regional Suncorp Bank branches closed Australia-wide for three years;
- Suncorp Bank to renew its current agreement with Australia Post for the provision of Bank@Post services for a minimum of three years; and
- ANZ to make best endeavours to join Bank@Post on commercial terms for a minimum of three years.
Lending conditions
The governments also imposed a number of conditions relating to lending commitments including:
- $15 billion of lending and other commitments for Queensland renewable energy projects and to support infrastructure development in preparation for the 2032 Olympic Games;
- $10bn of new lending to support energy projects in Queensland, including bioenergy and hydrogen projects over the next decade;
- $10bn of lending to support Queensland businesses over the next three years; and
- substantial home lending commitments in Queensland, including house lending targets of 3,000 homes and $350 million in housing‑related lending.
Employment conditions
Concerns over the impact on jobs has also resulted in a number of conditions regarding employment:
- no net job losses across Australia in Suncorp Bank and ANZ, as a result of the transaction, for three years;
- provide employees affected by the acquisition with specialist support and maximise opportunities for redeployment and external placement;
- work with consumer advocates, community stakeholders, and the Finance Sector Union to minimise community concerns about the acquisition;
- physical office for an ANZ Queensland managing director;
- create a Tech Hub in Brisbane to employee at least 700 individuals for five years and at least 450 after five years;
- enter into an agreement with Google for ANZ and Google to work with Queensland universities on curriculum initiatives, strengthen the focus on women in technology; create a cloud digital leader program for ANZ Queensland employees; and partner on reskilling initiatives.
Chalmers said ANZ would be required to provide annual reports and CEO certification of its compliance with the federal government’s legally enforceable conditions.
ANZ welcomes government approval
The major bank has welcomed the Treasurer’s approval of the deal to purchase Suncorp Bank.
“This is a significant milestone in our plans to expand our presence in Queensland and bring the best of ANZ to Suncorp Bank customers” ANZ CEO Shayne Elliott (pictured above right) said.
“Queensland is thriving. With strong economic growth, high workforce participation and more interstate migration than any other state or territory, we’re excited about the opportunities Queensland presents for ANZ and our customers.
Elliott said the bank was another step closer to welcoming Suncorp Bank customers into the ANZ Group.
“Suncorp Bank customers will continue to receive the same great service, from the same exceptional Suncorp Bank staff. Over time, we’ll make available to them ANZ’s leading technology, giving them access to the very latest in banking services.
Elliott said ANZ would continue its ongoing best efforts to reach an agreement with Australia Post, on a commercial basis, to offer Bank@Post services to its customers.
He said the Treasurer’s conditions aligned with the commitments ANZ made when it announced the proposed acquisition, which included maintaining Suncorp Bank’s current branch footprint and no net job losses for Suncorp Bank for three years post completion 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.”
Just last week, ANZ managing director Suncorp integration Daniel King highlighted how critical the first 100 days would be once the deal is finalised, saying it required a holistic approach involving numerous stakeholders, detailed processes, diverse technologies and operational change.
