ANZ says low unemployment rate would mitigate job losses from Suncorp deal

Any job losses resulting from the integration of Suncorp’s banking arm into ANZ will be tempered by Australia’s record low unemployment rate and outweighed by the public benefits of a tie-up between the two companies, the bank has argued.

In its submission to the competition watchdog, ANZ also said that while bank branches could be shut down as a result of the $4.9 billion takeover, public detriment from closures was “difficult to assess” and likely to be minimal as more and more people move towards online banking.

Suncorp agreed to sell its banking arm to ANZ in July in what would be the biggest banking deal in Australia in over a decade.

However, the deal faces tight regulatory and political scrutiny, requiring approval from federal Treasurer Jim Chalmers and the Australian Competition and Consumer Commission (ACCC). It will also require amendments to Queensland’s legislation.

While the tie-up was given a cautious thumbs-up by analysts and investors, it was met with fierce opposition from the financial services union and a number of regional banks and smaller players, who questioned the effect it would have on an already concentrated banking sector, and its benefit for consumers.

ANZ estimates it will achieve annual cost-saving synergies of $260 million from the deal. Seeking to get it over the line, it has pledged to keep Suncorp branches in Queensland open for three years, and promised there would be no Suncorp job losses in the bank’s home state.

However, the big four bank said in its merger authorisation application to the ACCC on Monday that after this three-year period, it would be able to save costs through the “rationalisation of duplicative managerial roles”.

“ANZ has not made any decisions about the numbers or roles of employees, or the numbers or locations of branches or contact centres that it will need to serve customers and run the bank [after three years],” the submission reads.

“The [expert report from RBB Economics] finds that savings due to the removal of duplicative roles represent an increase in productive efficiency, which is a public benefit even if it involves redundancies, and is likely to outweigh any potential detriment in the form of unemployment, given that the current unemployment rate in Australia is the lowest it has been in almost 50 years.”