The Australian Competition and Consumer Commission (ACCC) has rejected Suncorp’s plan to sell its banking business to ANZ in a proposed $4.9 billion deal, with the insurer saying it is "surprised and disappointed" by the decision.

“We are not satisfied that the acquisition is not likely to substantially lessen competition in the supply of home loans nationally, small to medium enterprise banking in Queensland, and agribusiness banking in Queensland,” ACCC Deputy Chair Mick Keogh said today.

“These banking markets are critical for many homeowners and for Queensland businesses and farmers in particular. Competition being lessened in these markets will lead to customers getting a worse deal.”

The ACCC says it accepts that ANZ would benefit from cost savings from the proposed acquisition and Suncorp Group would benefit from being able to focus on its insurance business, while there may also be prudential benefits from the transaction.

But the ACCC considers that those benefits don’t outweigh the likely detriments, particularly competitive detriments, likely to result from the proposed acquisition.

“After taking into account all of the claimed benefits we are not satisfied they are enough to outweigh the likely significant detriments to competition in banking markets that have the potential to impact many Australian households and businesses,” Mr Keogh says.

The ACCC has released its determination and an executive summary of its reasons today and will release further details on Monday after confidentiality checks with parties.

Suncorp Group Chairman Christine McLoughlin says Suncorp is "surprised and disappointed" with the determination and would "fully support ANZ" in referring the ACCC’s decision to the Australian Competition Tribunal, which can review ACCC decisions.

“When we embarked on this transaction, we were of the firm belief it was in the best interests of our customers, shareholders and employees and that it would provide a net benefit to the Australian economy,” Ms McLoughlin said.

“There is nothing we’ve seen throughout the ACCC process that has caused us to change our view on these matters and we believe the Tribunal will accept the merits of our case.

“In fact, the 12 months that have passed since the transaction was announced have only reinforced the rationale for the sale, and the importance of the benefits it will deliver for our stakeholders, the state of Queensland and the broader public.

“Together with ANZ, we will make our case to the Tribunal, which is led by a justice of the Federal Court of Australia. The Tribunal will look at all of the evidence with fresh eyes before forming its own view.”

Suncorp Group CEO Steve Johnston says the group remains fully committed to Suncorp Bank while the process continues.

“We will continue to deliver valued banking and insurance products and services through our trusted brands and dedicated people," he said.

Should the Tribunal approve the sale, Suncorp says it remains subject to the amendment of the State Financial Institutions and Metway-Merger Act and final approval from the Federal Treasurer under the Financial Sector (Shareholdings) Act.

"Subject to all approvals being received, we now expect completion by the middle of the 2024 calendar year," Suncorp said.