No surprise on Westpac/St George

The ACCC has approved the Westpac/St George merger. Why? They are both reasonably small in any geographic market. Indeed, my reading of the language of the decision indicates that bank mergers, if allowed, could go further:

The ACCC considers that the proposed acquisition would be unlikely to result in a substantial lessening of competition in any of the retail banking markets. Barriers to national entry are high and appear to be even more significant for branch-centric products. However, the level of aggregation arising from this transaction is relatively limited and a number of competitors — the other three majors, regional banks, credit unions and building societies, and other niche players — will pose a constraint on the merged entity post-acquisition. Further, while St George is competitive in terms of price and customer service, it does not appear to be unique or a market leader in either attribute.

Substitute any major bank for St George and reduce the number of majors from three to two and this paragraph would read almost the same. Now we can see why the Government has kept Four Pillars.