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Competition tsar Rod Sims says he will take an extremely close look at any attempt by National Australia Bank to buy Citigroup’s domestic retail banking unit, after the big four lender this week said it was in talks about a possible acquisition.
In response to media speculation, NAB this week confirmed it was in discussions about the potential purchase of the Citi’s Australian retail business, adding there was no certainty the talks would lead to a transaction.
ACCC chairman Rod Sims: “Citi is an important player, particularly in cards, so this is something we’d have a very very close look at.”Credit:Alex Ellinghausen
Mr Sims said the Australian Competition and Consumer Commission (ACCC) had been paying close attention to the financial services sector, and Citi’s unit was “much more substantial” than the neobank 86 400, which the ACCC allowed NAB to buy earlier this year.
“We don’t know the status of it, but if it was to go ahead we’d have an extremely close look at it. Obviously you’ve got the four big banks - we think the competition between them is fairly muted, and therefore competition from other players is important,” Mr Sims told The Sydney Morning Herald and The Age.
“Citi is an important player, particularly in cards, so this is something we’d have a very, very close look at.”
The deputy chair of the House of Representatives banking inquiry, Labor MP Andrew Leigh, said he thought the big four banks should be trying to grow organically rather than through acquisitions.
Dr Leigh questioned NAB’s CEO Ross McEwan and rival bank bosses about the potential acquisition of Citi earlier this year. Mr McEwan said at the time that he would not speculate on the issue.
“We’ve seen in other areas, such as social media platforms, the problems that occur when the largest players snap up smaller competitors. And here I think it is a problem. NAB is looking to grow not organically but through acquisitions in a sector that is already highly concentrated,” Dr Leigh said.
“Politicians shouldn’t tell the ACCC what to do, I’m sure they’ll be doing their job. But as somebody who would like to see more competition in the Australian banking sector I’m troubled by the prospect of a smaller player being purchased by a larger one.”