At around 5.30am on Monday morning, ANZ Bank CEO Shayne Elliott and its chairman, Paul O’Sullivan, gave the final green light to a deal Elliott said had been in place for seven years. march.
In Brisbane, after a hectic weekend of board meetings and final preparations, the two men signed the largest acquisition of ANZ in nearly two decades: the $ 4.9 billion purchase of Suncorp’s banking branch.
ANZ CEO Shayne Elliott on Monday in Brisbane. Credit: Peter Wallis
Under Elliott, CEO since 2016, the bank has focused on cutting costs and unloading non-core businesses, saying the deal is a signal that it is now moving toward growth.
In reality, however, Suncorp Bank has been on ANZ’s radar as a possible target for well over seven years: ANZ was also close to buying the Bank of Queensland during the 2008 global financial crisis.
If Monday’s deal is approved by regulators, it will be the largest Australian banking transaction since Westpac swallowed St George during the global financial crisis; will make ANZ the third largest mortgage lender in the country; and will be one of Elliott’s most important strategic moves.
However, it is likely to face significant regulatory scrutiny, and it has also been seen that another Suncorp bank suitor, its regional partners Bendigo and Adelaide Bank, lost the opportunity to join forces with Suncorp. Private equity group KKR, which had been in talks over the sale of $ 4 billion of MYOB to ANZ, has also been told that ANZ is withdrawing from the talks, after considering the purchase just last week.
There has long been market speculation about whether Suncorp, which gets about two-thirds of its profits through insurance brands like AAMI and GIO, would sell its bank.
In April this year, ANZ had a chance to dust off its files at the Queensland lender, after it was told Suncorp was considering its options for the bank. While Suncorp CEO Steve Johnson had previously argued the case to keep the financial conglomerate as one, Monday said he also regularly assessed the potential to discharge the bank and focus solely on insurance.
“What we’re seeing is a significant increase in the cost of running these two companies in terms of regulatory costs, compliance costs, and investments in systems,” Johnson said Monday. “We didn’t want to get to a position where we had to move capital to parts of the business that were missing others, who could use that capital.”