ANZ has signed a deal to buy the banking arm of Suncorp for $4.9 billion with Suncorp announcing its acceptance of the deal on Monday. The acquisition by ANZ solidifies its place as a big four lender and bolsters its presence in Queensland.
Suncorp’s insurance operations in both Australia and New Zealand will not form part of the deal and the Group’s head office will continue to be in Queensland.
The agreement reached dictates that Suncorp’s banking arm will continue for five years under the leadership of its current chief executive Clive van Horen but he will report to ANZ’s CEO Shayne Elliott. Under the deal, none of Suncorp’s Queensland branches will be closed in the next three years, nor will there any job losses in that time.
ANZ will initially maintain the Suncorp brand for 50 million (10 million per year for five years) before deciding if it becomes ANZ.
To many, the deal makes sense. Suncorp’s insurance core is very strong with it owning some of Australia’s biggest brands including AAMI, Apia, GIO and Shannons. While ANZ’s retail business has not been as agile in mortgage processing, it is looking to strengthen its hold in the home loan market. ANZ will absorb $47 billion worth of home loans with strong risk profile, $45 billion in deposits as well as $11 billion in commercial loans.
The sale continues the reshaping and simplification of the Suncorp Group, and positions both the insurance and banking businesses for ongoing growth and success – benefiting employees, customers and other stakeholders.
Suncorp’s chair, Christine McLoughlin, said “Both businesses will benefit from a singular focus on their growth strategies and investment requirements”.
ANZ Chief Executive Officer Shayne Elliott said, “This is a growth strategy for ANZ and we will continue to invest in Suncorp Bank and in Queensland for the benefit of all stakeholders.”
It is the first substantial acquisition by a major bank since Westpac bought St George and CBA bought Bankwest during the GFC in late 2008.
The acquisition is expected to take at least a year and must meet certain conditions. Federal Treasurer Jim Chalmers and the Australian Competition and Consumer Commission must approve the deal.