ANZ and Suncorp are appealing theAugust rejection by the Australian Competition and Competition and Consumer Commission (ACCC),which said allowing ANZ to swallow Suncorp’s banking unit would entrench the nation’s banking oligopoly.
A key debate is likely to bethe extent of competition in the mortgage market,the biggest source of loans for Australian banks and a crucial driver of profits.
Banks’ returns from mortgages have fallen sharply recently amid fast growth from the likes of Macquarie Group,and ANZ argues this proves the idea of a cozy banking oligopoly is outdated. But the ACCC maintains ANZ would have less incentive to compete fiercely if it bought Suncorp’s bank,which would see ANZ overtake National Australia Bank as the third-largest mortgage lender.
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ANZ’s submission,lodged with the tribunal last month,argued that buying Suncorp would create a more efficient bank better able to compete with industry giant Commonwealth Bank,claiming savings from the merger would be passed on to customers.
It said,“the evidence does not establish an existing oligopoly” among the major banks,highlighting the threat of smaller players such as Macquarie and business-focused Judo Bank.
“Scale benefits will not dilute ANZ’s incentives to compete to retain Suncorp Bank’s customers,who can readily switch to other banks,” it says.