Earlier this year, on 31 July 2024, ANZ Group Holdings (ASX:ANZ) completed its acquisition of Suncorp Bank, a move that will significantly expand ANZ’s presence in Queensland. This acquisition incorporated Suncorp’s 1.2 million customers and 3,000 employees into ANZ’s operations. ANZ’s CEO Shayne Elliott said: “This strategically important acquisition boosts our presence in Queensland, adds scale to our Retail and Commercial businesses, and means we can compete more effectively across the Australian market”.
ANZ recently provided an update on accounting-related adjustments impacting its 2024 second-half results arising from the acquisition. These include an accelerated software amortisation charge of $25m after tax and a Collectively Assessed Credit Impairment Charge (CIC) of $171m after tax. These adjustments were made to align Suncorp’s accounting policies with ANZ’s standards and do not affect the assessed value of the acquired assets.
ANZ’s financial position remains strong, despite these adjustments leading to a minor impact on its capital metrics. Specifically, ANZ’s Common Equity Tier 1 (CET1) ratio saw a reduction of approximately 2 basis points due to the changes. The bank plans to report Suncorp as a separate division in its full-year results, providing clearer insights into the performance of the newly integrated entity.
The acquisition faced scrutiny during the approval process, particularly from the Australian Competition and Consumer Commission (ACCC), which initially opposed the deal, citing competition concerns. However, the Australian Competition Tribunal reversed this decision in February 2024, allowing the $4.9 billion acquisition to proceed. This clearance was pivotal for ANZ’s strategy to compete more robustly with other major banks in Australia.