Halfway through last year, ANZ agreed to a deal worth $4.9 billion to take over Suncorp, aiming to boost its foothold in Queensland.
On Friday however, the ACCC has rejected the proposal on the grounds it would likely harm competition in home loans and retail deposits as well as business and agricultural banking.
The watchdog said the merger would "further entrench the oligopoly market structure that is highly concentrated within the four major banks."
The 'big four' collectively holds about 72% of Australia's banking system assets, and more than three quarters' worth of residential home lending.
The decision also said the merger would remove "the best and most meaningful opportunity for another second-tier bank to bolster its ability to effectively challenge the major banks through a step change in scale."
This is a reference to Bendigo and Adelaide Bank, which made an alternative proposal to acquire Suncorp's banking division.
However the two regional banks are similar in terms of assets size, making the acquisition more difficult; the acquisition price is also very close to Bendigo and Adelaide Bank's ASX market cap.
ANZ CEO Shayne Elliott said the decision was disappointing, but that the bank would be appealing.
"We are closely reviewing the determination and will seek an independent decision through the avenues of review available to us," Mr Elliot said.
Likewise, Suncorp Chairwoman Christine McLoughlin said she was "surprised and disappointed" by the decision.
"We were of the firm belief it was in the best interests of our customers, shareholders and employees and that it would provide a net benefit to the Australian economy," Ms McLoughlin said.
The outlook for consumers
A 2018 ACCC report into competition in the Australian financial system highlighted 'significant concerns' about the extent the big four dominate Australian banking.
The report found there was an "accommodative and synchronised approach to pricing" between CBA, ANZ, NAB and Westpac.
The size of the big four means it's difficult for new banks to grow enough to challenge the majors.
ANZ's argument was since it is the smallest of the big four, acquiring Suncorp would help it better compete within the oligopoly, a submission the ACCC considered.
The ACCC though said it was "highly uncertain" whether blocking the deal would substantially hurt ANZ's ability to challenge the others, while the suggested Bendigo/Suncorp merger would likely create a second tier bank "better placed to grow its market share through increased competition and trigger a stronger competitive response from the major banks."
More competition means more competitive rates for all banking products, including home loans, personal loans, savings accounts and term deposits.
The decision therefore is intended to prevent further consolidation of power among the big four, and increase the likelihood other banks will be able to compete.
ACCC Chairman Mick Keogh said the proposed acquisition would have "increased the likelihood that the major banks adopt a ‘live and let live’ approach to each other, aimed at maintaining or protecting their existing market shares."
Top 10 Banks - Residents' Assets, end-June 2023
| Rank | Bank | Value (billion) |
| 1 | Commonwealth Bank | $1,154.425 |
| 2 | Westpac | $1,031.659 |
| 3 | NAB | $945.319 |
| 4 | ANZ | $709.351 |
| 5 | Macquarie Bank | $253.640 |
| 6 | Bank of Queensland | $120.021 |
| 7 | Bendigo and Adelaide Bank | $111.749 |
| 8 | ING | $100.052 |
| 9 | Suncorp | $93.296 |
| 10 | HSBC | $59.625 |
Source: APRA Monthly ADI Statistics
Advertisement
Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.
| Bank | Savings Account | Base Interest Rate | Max Interest Rate | Total Interest Earned | Introductory Term | Minimum Amount | Maximum Amount | Linked Account Required | Minimum Monthly Deposit | Minimum Opening Deposit | Account Keeping Fee | ATM Access | Joint Application | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
4.40% p.a. | 5.75% p.a. Intro rate for 4 months then 4.40% p.a. | $289 | 4 months | $0 | $250,000 | $0 | $0 | $0 | Featured |
| |||||||
4.75% p.a. | 5.35% p.a. Intro rate for 4 months then 4.75% p.a. | $269 | 4 months | $0 | $249,999 | $0 | $0 | $0 |
| ||||||||
1.20% p.a. Bonus rate of 4.20% Conditions apply. | 5.40% p.a. | $271 | – | $0 | $250,000 | $1,000 | $0 | $0 | Featured |
| |||||||
0.10% p.a. Bonus rate of 5.00% Conditions apply. | 5.10% p.a. | $256 | – | $0 | $250,000 | $200 | $0 | $0 | No monthly fees |
|
Ready, Set, Buy!
Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!
With bonus Q&A sheet and Crossword!
Brooke Cooper
Harry O'Sullivan
Harrison Astbury
