First 100 days critical to complex project's success, says integration boss
For ANZ’s acquisition of Suncorp Bank to be successful, it will require a holistic approach involving numerous stakeholders, detailed processes, diverse technologies and operational change.
That’s the view of the man in charge of the transformational project – Daniel King (pictured above), ANZ managing director Suncorp integration.
King shared his views about ANZ’s $4.9 billion purchase of Queensland’s Suncorp Bank, and how the first 100 days after the deal is finalised will be critical to the success of the acquisition.
Approval of the deal has been a long time coming – ANZ signed an agreement to buy Suncorp Bank back in July 2022 but it has faced a number of roadblocks including the ACCC’s rejection of the acquisition, which claimed it would lessen competition in home loans nationally and banking in Queensland.
However, following ANZ and Suncorp Group’s appeal, in February the Australian Competition Tribunal overturned the ACCC’s decision, authorising the deal to go ahead.
Now all that remains is the commencement of the State Financial Institutions and Metway Merger Amendment Act, which will amend the Metway Merger Act to facilitate the acquisition. The deal also requires the Federal Treasurer’s approval.
On June 14, ANZ welcomed the passage of the amendment bill into Queensland Parliament.
First 100 days will be vital
King, sharing his views on the acquisition on the ANZ website, said if the bank stays “true to our values and purpose and remains focused on the deal logic, we will make this work”.
He said the deal would accelerate growth in ANZ’s retail and commercial businesses, with 1.2 million Suncorp Bank customers set to come across to ANZ.
“As of December 2023, the acquisition includes $56 billion of home loans with strong risk profile, $52 billion in high-quality deposits and $12 billion in commercial loans,” said King.
“Importantly, this opportunity will tilt our organisational axis north and it’s exciting to tap the potential of bigger exposure to the Queensland market – a fast-growing state buoyed by a rising population.”
King said the acquisition was getting closer to completion, expected to take place in August.
Such a large-scale transformation was complex and would require services, systems and processes to be in place to ensure “the incoming Suncorp Bank customers and team experience a seamless day one”.
Beyond that, ANZ needed to invest heavily in planning for the integration of the businesses.
“To achieve sustainable business outcomes requires a holistic approach involving multiple stakeholders, intricate processes, diverse technologies and operational change,” said King.
“We also know the harsh reality; many acquisitions fail. According to Harvard Business Review, most studies show 70% to 90% of acquisitions do not achieve the original aspiration of the transaction.”
King said failure to successfully execute – not the wrong strategy or the wrong deal – caused many acquisitions to fall short of expectations.
ANZ’s Integration Management Office (IMO), led by King, would act as the ‘control tower’ for all integration work.
King said the whole-of-bank transformation required everyone across commercial, retail and enablement to work together, with shared accountability paramount.
“In the first 100 days leaders across our bank will want to (and need to) engage with the Suncorp Bank team and fellow leaders in order to deeply understand the business and prepare for the future,” he said.
King said clarity was also required between ANZ and Suncorp Bank on how “we will best operate these two businesses side by side”.
“If we don’t take the time to do this in a clear and consistent way, we risk overwhelming the Suncorp Bank team, potentially disrupting business momentum,” he said.
“We know from acquisitions globally this is a real and present risk. So the IMO will help navigate through this period.”
Fast pace needed
King said while bringing two banks together would take years, the key to success was a strong first year.
He said McKinsey’s evidence showed that if key milestones were delivered on time, organisations were twice as likely to meet and exceed their targets and hit long-term strategic objectives.
“As we look to move at speed, there will be bumps along this multi-year program, in particular during the first year. Our ability to adapt and respond quickly to these hurdles will be critical,” he said.
King said ANZ and Suncorp Bank must solve any problems as one bank – not by function or business unit.
Clear communication required
King said communication was vital – it needed to be simple and uncomplicated so that responsibilities, goals and expectations were clearly understood.
“It’s about Suncorp Bank continuing to operate without disruption and interference and ANZ delivering on the basic elements necessary to ensure employees are safely onboarded and customers experience no change,” he said.
This meant the IMO should be in charge of all communication between ANZ and Suncorp Bank, at least for the first 100 days.
King said the aim was to be one team with the same purpose, strategy and goals.
“Our branding might look different but our focus on our people and our customers will be the same – and we can only win together,” he said.
Culture trumps strategy
King said he recently joined fellow integration leads in the US to share experience and best practice and the key message from merger and acquisition experts was that culture could kill deals.
He said when integrations went poorly, nearly half the time it was due to cultural issues not being dealt with properly.
“We are working with Suncorp Bank’s leadership team to understand cultural similarities and differences,” he said. “This work will ramp up following day one.”
King said spending time understanding the Suncorp Bank culture would result in less friction.
“[We can] identify where cultural shifts are required and look to leverage some of Suncorp Bank’s strengths,” he concluded.
What do you think of ANZ’s acquisition of Suncorp Bank? Will it result in any benefits for your home loan customers? Comment below
