By Friday, the ACCC must hand down its decision on ANZ’s application for authorisation for the proposed $4.9 billion takeover of Suncorp Bank.
Things do not look promising for ANZ.
The ACCC commissioned a supplementary report from UK-based independent expert Mary Starks from Flint Global, one that elaborates on her already cynical conclusions on the impact of this merger.
Starks’ supplementary report, which adheres to ACCC guidance on the themes to explore, concludes that an alternative merger of Suncorp Bank with Bendigo and Adelaide Bank “could be a more effective competitor than Bendigo would be alone”.
So, very soon Bendigo and Adelaide Bank may find itself stepping into the spotlight with an alternative takeover offer for Suncorp Bank.
It will be scrip heavy. It will have to be. Bendigo’s market capitalisation is roughly the same as the value of ANZ’s cash offer, and a third of the market cap of Suncorp Group.
Bendigo might have to make it an all scrip offer.
And what are they buying in Suncorp Bank? A perennial underperformer and a disappointment in the ranks of challenger banks, which in the mid 1990s Suncorp set out to be.
Bendigo’s market share in mortgages is around 2.9 per cent and Suncorp’s is 2.5 per cent, giving it a similar market share to that of Macquarie Bank. Its combined deposit share would be around 5.8 per cent.
Bendigo’s board, presumably, is in a position it wanted to be in and it will be fascinating to see what they deliver from here.