A merger of Bendigo and Adelaide Bank and Suncorp Bank “would effectively double their scale and allow them to effectively compete”, the Australian Competition Tribunal heard on Friday.
A potential merger of the two banks is the principal counterfactual advanced by the ACCC in its reasons for blocking ANZ’s attempt to merge with Suncorp Bank.
“The commercial likelihood of the Bendigo Suncorp merger is evident from three undeniable commercial propositions or realities,” barrister Nicholas De Young, for Bendigo, told the Tribunal.
“The first is scale. Second, the merger delivers substantial synergies, and third, the two businesses are very complementary,” De Young said.
“It is not in dispute that scale is critical.
“The major banks have great scale. The regional banks do not have anywhere near the scale; they need that scale to compete with major banks.
“A step up in scale spreads their fixed costs in regulatory and compliance, both of which are growing.
“To compete with major banks, they need to spend vast amounts … they need scale.”
The counterfactual merger, De Young said, would “result in very substantial synergies … not linked to Queensland branch closures or Queensland employees.
“The substantial synergies … they’re [a] real chance. There is no suggestion they are not.”
“What is in dispute is timing.
“They’re a material strategic fit … good cultural fit, and a good fit from a geographic perspective.”?