Suncorp will support ANZ in an appeal against the Australian Competition and Consumer Commission’s (ACCC) decision to block the sale of the insurer’s banking division and says it’s now targeting deal completion by the middle of next year.

The ACCC on Friday rejected the proposed $4.9 billion sale of Suncorp Bank to ANZ due to concerns it would substantially lessen competition in home loans as well as SME and agribusiness banking in Queensland. 

Suncorp Chairman Christine McLoughlin says the company was surprised and disappointed by the decision and would support a referral of the ACCC ruling to the Australian Competition Tribunal, which is led by a Federal Court justice. 

Ms McLoughlin says Suncorp continues to believe the transaction is in the best interests of customers, shareholders and employees, will provide a net benefit to the Australian economy and will not adversely impact competitive dynamics. 

“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,” she said. 

“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.” 

ANZ CEO Shayne Elliott says the bank is reviewing the ACCC determination “and will seek an independent decision through the avenues of review” available. 

“All of the relevant markets are intensely competitive and will continue to be intensely competitive after the acquisition,” he said. 

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

“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,” Deputy Chair Mick Keogh said. 

The ACCC says there’s also a realistic likelihood that if the ANZ deal didn’t go ahead Bendigo and Adelaide Bank would make an offer, potentially creating a larger second-tier bank. 

S&P Global Ratings notes the acquisition of Suncorp’s bank by ANZ “remains a plausible outcome” given the likely referral to the Australian Competition Tribunal. 

The deal, if cleared by the tribunal, would remain subject to the amendment of the State Financial Institutions and Metway-Merger Act and final approval from the Federal Treasurer. 

“Subject to all approvals being received, we now expect completion by the middle of the 2024 calendar year,” Suncorp said on Friday. Previously, the company had expected the sale to be wrapped up by the end of this calendar year. 

Morningstar says the ACCC could be overruled “but it is looking increasingly unlikely the deal will proceed”, while alternatives including a separate bank listing or tie-up with Bendigo and Adelaide would likely be less appealing for Suncorp shareholders compared to the ANZ proposal.