Suncorp sells banking business to ANZ for $3.33b

ANZ will continue to operate it as Suncorp Bank for five years.

Suncorp Group has sold off its Australia and New Zealand banking business for $3.33b (AU$4.9b) to  Australia and New Zealand Banking Group Limited.

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.

Suncorp will be paid a minimum fee of $34.02m (AU$50m) for the use of the Suncorp Bank brand, to be received over time in increments of $6.8m (AU$10m) per year. This licensing agreement may be extended for a further two years for an additional fee of $6.8m (AU$10m) per year.

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The transaction is expected to yield net proceeds of $2.79b (AU$4.1b). The indicative proceeds are net of the impact of separation costs, transaction costs, other divestment-related costs and provisions for indicative capital gains. Additionally, there will be a Transitional Services Agreement with ANZ for a period of two to three years post-completion. Suncorp is targeting the removal of stranded costs arising from the transaction within three years post-completion.

The sale is subject to a range of regulatory approvals from the Federal Treasurer and the Australian Competition and Consumer Commission. Suncorp plans to complete the sale in a year’s time.