ACCC says – not so fast…
When NAB’s CEO fronted the parliamentary committee last Friday, he had plenty to say about home prices, but when it came to potential acquisitions, Ross McEwan refused to rule out a Citi takeover – or comment further on the potential of another purchase by the big bank.
"Our strategy today is to grow through our own activities, but you know, every business, be it a bank or anybody else would look at areas that might add to the customer services and make it more efficient," he said.
Mortgage lending is already highly concentrated in the big four banks, and NAB’s recent $220 million acquisition of Neobank 86 400 hasn’t done anything to help perception that the big four have too much of a grip on the market. So while McEwan’s posture at the committee hearing was a clear message that he would do what he thought was best for shareholders, in reality Australia’s third-largest lender might well think twice before buying Citibank’s $6.6 billion housing loan book.
And it may be Citibank’s credit card business that poses the greatest danger of regulatory interference.
"Given the five main credit card providers are the big four plus Citigroup, there would certainly be competition concerns if one of the big four wanted to buy this Citigroup business," said ACCC chairman Rod Simms on Friday. "It's something we're going to take an extremely close interest in."
Sims was explicit enough to say that if NAB, or any of the other Big Four tried to purchase Citi’s business then the ACCC would investigate, and could well block the deal.
"If we take a very close look at something through a public review, then taking a decision to oppose a merger is always an option" he told the ABC.
Citibank by the figures
5th biggest player in Australian credit card market with around 12.6%
$6.6 billion in housing loans
36 years in Australia
1200 employees nationally
Timeline in Australia
1985 – first foreign bank to be granted a banking license
1999 – buys Diners Club Australia
2001 – Citibank Centre opens in Sydney
2002 – launches CitiGold Wealth Management
2009 – following the GFC, Citi splits into Citi Holdings (troubled assets, brokerage, consumer finance) and Citicorp (retail banking, credit cards, business banking)
2019 – appoints Marc Luet CEO
Top 10 mortgage lenders in Australia by market share
CBA 25.7
