The Australian Competition and Consumer Commission (ACCC) said it will not oppose the proposed acquisition of BankWest and St Andrew's by the Commonwealth Bank, after concluding that the acquisition is unlikely to substantially lessen competition under section 50 of the Trade Practices Act 1974 in the markets in which they compete.

The ACCC considered information provided by BankWest that its aggressive pricing was driven by its east coast expansion strategy and therefore would not continue because of the cessation of these plans. The ACCC also examined whether alternative buyers for BankWest would be likely to continue with BankWest's expansion strategy and aggressive price competition. Any buyer would need to be in a position not only to raise the purchase price but to repay the approximately $16 billion in intra-group loans from HBOS.
Following inquiries with financial regulators, BankWest's parent company, Australian and overseas banks and other consortia which may have had an interest in acquiring BankWest, the ACCC concluded that an alternative buyer was unlikely in the current funding environment. The ACCC also concluded that, even if another buyer were in a position to acquire the business, it was highly unlikely that they would choose to invest the capital necessary to continue with its expansion plans.
The Australian Prudential Regulatory Authority and the Reserve Bank of Australia have provided information to the ACCC's review that supports the conclusion that BankWest would not continue to be in the same position to provide strong competition going forward.
"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," Mr Samuel added. "The ACCC's views regarding the likely competitive effect of this proposed acquisition are specific to the circumstances of this acquisition. In particular, the financial situation of BankWest's UK parent, and the associated changes it is likely to make to BankWest's operating model in the absence of the transaction, have strongly informed the ACCC's conclusions. The ACCC will closely analyse the competition implications of any further proposed acquisitions of regional banks."
The basis upon which the ACCC has reached its decision will be outlined in a Public Competition Assessment, which will be available shortly on the ACCC's website.