Quotes: Market reaction to approval for ANZ's buyout of Suncorp bank unit

Karnataka Bank

20/02/2024 24:17

SYDNEY, Feb 20 (Reuters) - Australia's Competition
Tribunal approved ANZ Group's  ANZ.AX  A$4.9 billion ($3.2
billion) buyout of Suncorp's  SUN.AX  banking business on
Tuesday, allowing the bank to press ahead the acquisition. 
    The takeover still requires approval by Australian Treasurer
Jim Chalmers and a sign-off from the government of Queensland,
where Suncorp is based.
    Here is some reaction from financial markets:
     
    AZIB KHAN, BANKING ANALYST AT E&P FINANCIAL:
        "We expect completion of the acquisition to weigh on
ANZ’s relative share price performance as it reduces the
magnitude of potential capital return, and will see ANZ dealing
with the integration over the next 3 years for potentially very
modest EPS accretion. We also believe the acquisition will add
to ANZ’s cost challenges and that the acquisition will not
significantly shift the dial in terms of ANZ’s capital
allocation which sees the greatest percentage of capital being
allocated to its lowest ROE division (being Institutional)."
    
    MORNINGSTAR ANALYST NATHAN ZAIA:
        "The acquisition adds scale to areas where ANZ Bank
trails major bank peers, with home loans balances to increase by
18%, customer deposits by 14%, and business lending by 9% (but
likely closer to 20% in SME lending). Consolidating systems and
processes should help lower the cost base, and we see potential
for some funding cost savings over time given ANZ's better
credit rating. The integration risks are worth taking in our
view."     

 (Writing by Praveen Menon; Editing by Neil Fullick)
 ((praveen.menon@thomsonreuters.com; Reuters Messaging:
praveen.menon.thomsonreuters.com@reuters.net; Twitter:
@Journopraveen))