ANZ sets out five reasons the ACCC was wrong to block Suncorp deal

afr.com:

ANZ will make five key arguments in a hearing next month when it will attempt to convince the Australian Competition Tribunal to overturn the Australian Competition and Consumer Commission’s decision in August that blocked its $4.9 billion acquisition of Suncorp Bank. 

ANZ chief executive Shayne Elliott, right, with the bank’s head of institutional banking, Mark Whelan.  Arsineh Houspian

ANZ wants to buy Suncorp Bank to increase its exposure to Queensland and to recover lost share in the home loan market.

It argues its increase in mortgage market share after a deal – from 13 per cent to 15.3 per cent – won’t move the dial in terms of mortgage competition overall.

To uphold the ACCC’s decision, the tribunal has to find a deal would substantially lessen competition in a market.

But ANZ will argue this will not occur because the Commonwealth Bank will remain a clear market leader in home loans and retail deposits, while National Australia Bank will maintain its lead in business banking.

New competitors, including Macquarie in home loans, Rabobank in agribusiness, and Judo Bank in small business lending would continue to capture material market share, even if the deal is allowed, ANZ is arguing.

Even with the acquisition, ANZ would remain the smallest of the four major banks by assets and marginally overtake NAB to be third in home loans.

ANZ will argue the ACCC and its expert economic witness, Mary Starks, “wrongly suggest that competition in the market is unlikely to endure”.

It says the decision to block the deal gave “insufficient weight” to longer-term trends of increasing competition, which can be seen in declining market shares, lending margins, and other profitability measures.

“The incorporation of Suncorp Bank (the