Treasurer to green-light $4.9b ANZ-Suncorp deal

ANZ Bank’s $4.9 billion takeover of Suncorp’s banking arm is expected to receive the green light from Treasurer Jim Chalmers, subject to conditions requiring the merged bank to protect jobs and retain a regional presence.

After ANZ successfully overturned the competition watchdog’s opposition to the takeover through a court challenge earlier this year, it is expected that Chalmers will on Friday tick off on the transaction, which is the biggest banking deal in Australia since Westpac bought St George in 2008.

As part of the approval, Chalmers is expected to announce requirements for ANZ to retain a presence in regional Australia, and there will also be a commitment regarding jobs.

ANZ’s chief executive, Shayne Elliot.

ANZ has already pledged there will be no change in the number of Suncorp branches in Queensland for at least three years after the deal is completed, and the bank last year committed to establishing a technology hub in Brisbane with 700 jobs in the state under an agreement with the Queensland government.

Chalmers last night declined to comment, but a spokesman said a decision was close.

The expected sign-off from Chalmers is the last key hurdle for the deal, which was first announced in July 2022, as part of a plan from chief executive Shayne Elliott to bulk up in retail banking.

Meanwhile, on Thursday Elliott said the number of struggling customers needing financial help will continue to climb, as high interest rates squeeze borrowers and lenders face pressure to improve their hardship assistance schemes.

After the corporate watchdog last month said mortgage lenders were making it too hard for borrowers who could not meet their repayments to access help, Elliott said the number of people seeking hardship assistance had been rising, and the trend was likely to continue.

Amid debate over whether the Reserve Bank will lift interest rates in August, Elliott said ANZ had tried to improve its hardship arrangements, which can include measures such as temporary repayment pauses or restructuring debts.

“In line with the broader economic environment, the number of ANZ home loan customers in hardship has risen over the last year to around three in 1000 people. The number for small business customers is similar, at around two in 1000,” Elliott told a briefing on environmental, social and governance (ESG) issues.

“While these numbers are still low in historical terms, we expect they will continue to rise given the external environment, and we are working hard to help people who are struggling.”

Speaking at the same briefing, ANZ’s customer fairness adviser, Evelyn Halls, said the bank had put in place an “action plan” to improve the outcomes and experience for customers needing support. The plan focused on areas including better communication, improving training and policies, and specialist support for vulnerable customers.

In a sign of the pressure on borrowers, Fitch Ratings on Thursday said the number of customers falling behind on their home loan repayments had hit an eight-year high.

The rating agency tracks payment rates on home loans contained within residential mortgage-backed securities, which are packages of mortgages pulled together and sold to investors.

It reported that the proportion of loans within these securities that were at least 30 days behind in repayments climbed to 1.3 per cent in the March quarter. The proportion in the early stage of arrears, which is between 30 and 59 days in arrears, lifted to its highest level since February 2016.

For non-conforming loans, which are those to people with poor credit histories or self-employed borrowers with low documentation, the arrears rate climbed for a third consecutive quarter to its highest level since 2019.

Monthly inflation data from the Australian Bureau of Statistics on Wednesday showed consumer prices rose by 4 per cent over the 12 months to May, up from 3.6 per cent in the 12 months to April.

Financial markets now put the chance of an interest rate rise at the Reserve Bank’s early August meeting at 50-50.

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