Australia and New Zealand Banking Group (ANZ.AX) is owns the banking arm of insurer Suncorp Group (SUN.AX) for A$4.9 billion ($3.33 billion), as the smallest of Australia’s major lenders seeks to revive growth at home after falling behind rivals.
The deal announced on Monday will boost ANZ’s retail presence in a fast-growing domestic region and increase its assets in mortgages, the most lucrative business for Australian banks, by nearly a fifth, helping it to overtake National Australia Bank Ltd (NAB.AX) for third spot in the business.
ANZ had previously expanded rapidly in Asia, which it has been unwinding over the past few years. It lags Commonwealth Bank of Australia (CBA.AX), Westpac Banking Corp (WBC.AX) and NAB by market value and some other metrics.
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“It’s not offshore, it’s not away from their core capabilities, in terms of acquisitions this is not a bad one,” said Hugh Dive, chief investment officer at Atlas Funds Management, which owns shares of ANZ and Suncorp.
ANZ aims to raise A$3.5 billion by issuing new stock to pay for the deal, in Australia’s biggest equity capital raising of this year.
The buyout, which is subject to regulatory approval, will boost ANZ’s mortgage book by A$47 billion to A$307 billion. It shows how important mortgages are to Australia’s banks even as rising interest rates and cost-of-living pressures throttle house prices, with many economists forecasting a recession within a year.
ANZ missed most benefits of a COVID-19 driven real estate boom that saw home values leap by a quarter in the year to early 2024 due to delays in processing applications, analysts have said.
The lender said separately it had dropped talks to buy accounting software maker MYOB from private equity firm KKR & Co (KKR.N). ANZ had disclosed the talks a week ago.
“(ANZ’s) acquisition appetite is troubling, given growing recessionary risks and ANZ’s poor operational performance to date,” Jefferies analyst Brian Johnson said in a client note.
“The ANZ core franchise is already struggling, and adding more complexity during a period when MQG is driving up deposit costs looks ill-disciplined,” he added, referring to mortgage challenger Macquarie Group Ltd (MQG.AX).
Shares of ANZ were untraded as the bank readies its new stock issue. The new shares were being sold at A$18.90 each, a 12.7% discount to ANZ’s closing price of $A21.64 on Friday, according to its filings.
Shares of Suncorp, which has been trying to offload an asset deemed non-core, rose 5.7%, against a broader market gain of 0.6%. The company will return most of the sale proceeds to shareholders.
ANTITRUST REVIEW
The deal would represent a geographic expansion by Melbourne-headquartered ANZ into Queensland state, where Suncorp is based and has most of its business. ANZ sees itself as under-represented in Queensland and would keep the target’s headcount and branding in the state for at least a few years, ANZ said.
ANZ would also commit to funding a host of energy and infrastructure projects in Queensland, including some tied to the 2032 Olympic Games in its capital Brisbane.
The deal would create a “simpler, stronger platform for growth” that “does advance our strategic ambitions”, ANZ CEO Shayne Elliott said.
The purchase price amounted to 13.8 times past earnings for Suncorp’s banking unit, ANZ said, below the price-earnings ratio of Suncorp’s overall business but in the range of Australia’s major banks.
Suncorp Chairman Christine McLoughlin said the agreed price “fairly values the bank” and reflects the “progress made on delivering our strategic objectives”.
The deal presents the biggest task so far for new antitrust regulator Gina Cass-Gottlieb who started as chair of the Australian Competition and Consumer Commission (ACCC) in March. In a statement, the ACCC said its review of the deal would include the role of regional banks and competition with the majors.
“We will consider Suncorp’s role as an effective competitor and challenger to the major banks in Queensland and in other states,” an ACCC spokesperson said.
ANZ’s Elliott said on a call with journalists that the bank hoped its status as the smallest of the major banks would help secure approval. “We look forward to making the case but we’ll work through that over the coming months,” he said.
($1 = 1.4734 Australian dollars)
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Reporting by Byron Kaye in Sydney and Sameer Manekar in Bengaluru, with additional reporting by Scott Murdoch; Editing by Daniel Wallis, Richard Chang, Kenneth Maxwell and Muralikumar Anantharaman
If Suncorp Bank was to move under ANZ’s authorised deposit-taking institution (ADI) licence, it would mean that any account holders with separate ANZ and Suncorp accounts totaling more than $250,000 would no longer be fully covered under the Financial Claims Scheme though.
Overview of Public Universities in South Africa
Here's an overview of some public universities in South Africa, including general admissions requirements and estimated application periods. Keep in mind, specific program requirements and dates can vary significantly, so it's important to check each university's official website for the most current information.
University of Pretoria
- Admissions Requirements: National Senior Certificate with minimum scores in specific subjects related to the chosen program; for international students, equivalent qualifications.
- Application Period: Usually opens in March and closes at the end of July for most programs.
University of Cape Town
- Admissions Requirements: National Senior Certificate with pass levels required for degree study; subject-specific requirements depending on the program.
- Application Period: Application opens in April and closes at the end of July.
Stellenbosch University
- Admissions Requirements: National Senior Certificate with required marks; some programs have additional testing.
- Application Period: Opens in March and typically closes at the end of June.
University of the Witwatersrand
- Admissions Requirements: Matriculation certificate with university exemption; required scores vary by faculty.
- Application Period: Begins in March and ends on the 30th of September.
University of Johannesburg
- Admissions Requirements: Matric exemption with a minimum APS score; specific subject requirements based on the faculty.
- Application Period: Opens in April and generally closes by the 30th of September.
University of the Free State
- Admissions Requirements: National Senior Certificate with specific marks for the program applied to; additional requirements for certain courses.
- Application Period: Typically opens in April and closes at the end of August.
University of Venda
- Admissions Requirements: Completion of the National Senior Certificate with an endorsement for diploma or degree studies; specific APS scores needed.
- Application Period: Usually from May to September.
University of Fort Hare
- Admissions Requirements: National Senior Certificate with university exemption; certain programs may have specific requirements.
- Application Period: Opens around May and closes at the end of September.
University of the Western Cape
- Admissions Requirements: National Senior Certificate with specific performance levels; additional requirements for certain programs.
- Application Period: Generally from May to September.
North-West University
- Admissions Requirements: National Senior Certificate with university exemption; program-specific requirements may apply.
- Application Period: Opens in March and usually closes by the end of August.
Rhodes University
- Admissions Requirements: National Senior Certificate or equivalent; minimum academic performance in certain subjects.
- Application Period: Applications open in April and close at the end of September.
Nelson Mandela University
- Admissions Requirements: National Senior Certificate with required scores for chosen programs; portfolio or additional tests for some faculties.
- Application Period: Opens in April, with a deadline at the end of August for most programs.
Cape Peninsula University of Technology
- Admissions Requirements: National Senior Certificate with specific scores; additional requirements for certain courses.
- Application Period: Opens in May and typically closes by the end of September.
University of Limpopo
- Admissions Requirements: Senior Certificate with endorsement for diploma or degree courses; specific APS scores for different programs.
- Application Period: From April to September.
University of Zululand
- Admissions Requirements: National Senior Certificate with an endorsement for bachelor’s degree studies; specific score requirements for various programs.
- Application Period: Usually between April and November.
Central University of Technology
- Admissions Requirements: National Senior Certificate with specific scores for the chosen field of study; additional criteria for certain programs.
- Application Period: Application period generally starts in May and ends in October.
Vaal University of Technology
- Admissions Requirements: National Senior Certificate with a pass that qualifies for admission to bachelor’s degree, diploma, or higher certificate programs.
- Application Period: Typically from May to September.
Walter Sisulu University
- Admissions Requirements: National Senior Certificate with required scores for chosen programs; additional criteria for certain faculties.
- Application Period: From April to September.
This list provides a starting point for understanding the admissions landscape across South Africa's diverse higher education institutions. Given the variability in programs and requirements, it's crucial to consult each university's website for the most accurate and up-to-date information.