Suncorp Group has announced that it has signed a share sale and purchase agreement with Australia and New Zealand Banking Group Limited (ANZ) to sell its banking business.
ANZ has agreed to a $4.9 billion deal to acquire Suncorp’s banking arm in a bid to boost the size of its mortgage book as the country’s housing market cools.
Suncorp has also noted that its insurance operations in both Australia and New Zealand will not form part of the transaction and the group’s head office will continue to be in Queensland.
The Bank will continue to operate under the Suncorp Bank brand pursuant to a licensing agreement between ANZ and the group for a period of five years post completion.
The Transaction is subject to a range of regulatory approvals from the Federal Treasurer and the Australian Competition and Consumer Commission. At the same time, the targeted timeframe for completion of the transaction is approximately 12 months, during which time Suncorp Group will continue to run the bank.
In addition, ANZ has indicated its intention to potentially run the bank as a separate business to minimise disruption and support the bank’s ongoing growth for at least the following three years. The transaction creates an opportunity to accelerate the plan for Suncorp Bank under ANZ’s ownership.
The transaction also supports the ongoing transformation of Suncorp’s insurance businesses as it builds on its leading market positions and scale in attractive and growing segments in Australia and New Zealand.
Suncorp Chairman, Christine McLoughlin, said: “This proposal has been assessed through the lens of creating value for shareholders and, just as importantly, to ensure there is alignment of purpose and values and positive outcomes for our people and customers.
“Suncorp Group, which is the proud home of several of Australia and New Zealand’s leading and most trusted insurance brands including AAMI, GIO, Shannons, Apia and Vero, and of course the Suncorp brand, will continue to offer the same great service to Queenslanders. Both businesses will benefit from a singular focus on their growth strategies and investment requirements.
“We believe the agreed price fairly values the Bank and reflects the hard work of our people and progress made on delivering our strategic objectives. Our purpose of building futures and protecting what matters – the focus of our company for over 100 years – will remain at our core and enable our people to deliver on our vision to create the leading Trans-Tasman insurance company.”
Suncorp Group CEO, Steve Johnston, added: “As a dedicated insurance business we will be singularly focused on meeting the needs of our customers and communities at a time when the value of insurance has never been greater.
“We acknowledge the needs of insurance customers are rapidly changing, with a preference for digital interactions and for product design to take into account personal circumstances and risk profiles. At the same time, the external environment has seen more frequent and severe natural hazard events resulting in increased costs and affordability challenges.
“Suncorp will continue to be at the forefront of advocating for a more resilient Australia and for all levels of Government to focus on mitigating the impacts of major weather events through improved public infrastructure, subsidies to improve private dwellings and an overhaul of planning laws.”
Johnston, continues: “By combining with a larger banking group, Suncorp Bank will be well positioned for the future. Customers will see benefits including access to a wider range of products and services, and career opportunities will be enhanced for our people. ANZ is committed to growing its presence in Queensland and I am pleased about the commitments they are making to our customers and employees.
“Suncorp Group remains fully committed to supporting the Bank until completion of the sale.”