The Financials sector could get a boost today after Suncorp Group Ltd (ASX: SUN | ADR: SNMCY) announced the Federal Treasurer’s approval of the proposed acquisition of Suncorp Bank by ANZ Banking Group (ASX:ANZBY) Ltd under the Financial Sector (Shareholdings) Act (FSSA).
"Today, we are announcing that the ANZ acquisition of Suncorp bank can go ahead, but subject to strict and legally enforceable conditions," Dr Jim Chalmers said in a press conference on Friday morning.
"The conditions that I am proposing and imposing on the transaction are all about ensuring access to vital banking services, particularly in the regions, and also making sure that employees aren't left behind in this transaction."
The approval marks a significant milestone for the transaction, initially announced in July 2022. It follows approvals from the Australian Competition Tribunal in February 2024 and Queensland legislation passed in June 2024 amending the Metway Merger Act.
Suncorp and ANZ aim to finalise the transaction by July 31, 2024.
Suncorp Group Chairman Christine McLoughlin expressed gratitude to shareholders and employees for their patience during the approval process.
“The Suncorp Group Board remains committed to returning to shareholders the majority of net proceeds following completion of the sale,” McLoughlin said.
She added that the capital return to shareholders is expected in the first quarter of 2025, pending finalisation of completion accounts and necessary approvals from the Australian Tax Office and the Australian Prudential (LON:PRU) Regulation Authority.
Suncorp Group CEO Steve Johnston highlighted the strategic shift towards becoming a dedicated Trans-Tasman insurer, headquartered in Queensland.
“Following completion, Suncorp will focus on meeting the evolving needs of insurance customers and addressing increasingly complex challenges such as climate change and affordability,” Johnston stated.
He also noted that the transaction aligns with a jobs and investment package agreed with the Queensland government, benefiting both Queensland and broader regions.
Johnston further announced that due to conditions attached to ANZ’s FSSA approval, Suncorp has waived the A$10 million annual brand licence fee for five years.
ANZ welcomes approval
ANZ welcomed Jim Chalmer’s approval, viewing it as a pivotal step in its expansion plans in Queensland.
“This is a significant milestone in our plans to expand our presence in Queensland and bring the best of ANZ to Suncorp Bank customers,” ANZ CEO Shayne Elliott said.
Elliott highlighted Queensland’s robust economic growth and expressed excitement about integrating Suncorp Bank customers into the ANZ Group, ensuring continuity in service and the introduction of ANZ’s leading technology.
The approval includes conditions such as maintaining regional branch numbers and preventing net job losses in Australia for three years.
“We’re pleased to see commitments that for three years, no regional ANZ or Suncorp bank in Australia will be closed, there will be no changes to the number of Suncorp branches in Queensland and no net job losses across Australia as a result,” Finance Sector Union president Wendy Streets said in a statement on Friday.
“This gives our finance workers greater job security during what is a challenging process. Importantly, vital banking services will be protected in regional communities, something that is desperately needed amid the slew of regional bank closures we’ve seen take place in recent years."
ANZ will also seek an agreement with Australia Post to offer Bank@Post services.
Elliott noited the strategic importance of the acquisition, saying, “Looking ahead, we’re pleased to be one step closer to this strategically important acquisition which will allow us to add scale to our Retail and Commercial businesses while enabling ANZ to more effectively compete in the Australian market.”
The transaction's completion remains contingent upon the start of the Queensland State Financial Institutions and Metway Merger Amendment Act.