Weakened BankWest position leads to green light for CBA
While the proposed BankWest/St Andrew’s acquisition by the Commonwealth Bank of Australia (CBA) will go unopposed, other acquisitions of regional banks by the big four are unlikely to receive such easy passage.
The Australian Competition and Consumer Commission (ACCC) found that as a result of the challenges facing BankWest’s UK parent, HBOS, the group’s position as an aggressive competitor in the banking space was unlikely to have continued.
As such, the ACCC found that CBA’s acquisition of the group is unlikely to have a substantial impact on competition in the market in which they compete.
While BankWest was a keen competitor prior to the financial crisis, the ACCC said it had received evidence that its expansion plans were to be “significantly scaled back” as a result of HBOS’ woes.
Furthermore, any alternative buyers would have been unlikely to have continued BankWest’s expansion strategy.
But the ACCC said in the absence of the financial crisis and the funding difficulties faced by HBOS, its conclusion may have been different.
“The decision today by the ACCC should not be viewed as a green light to the acquisition of other regional banks by the big four,” ACCC Chairman Graeme Samuel said.
Samuel said the ACCC will closely analyse the competition implications of any further proposed acquisitions of regional banks.
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