The National Australia Bank Ltd (ASX: NAB) share price will be on watch today after the Australian Competition & Consumer Commission (ACCC) gave an update about the 86 400 acquisition.
What did the ACCC decide about NAB and 86 400?
The ACCC said that it won’t oppose the proposed acquisition of 86 400.
After consulting with a number of different financial players – including banks, non-bank lenders, fintechs, mortgage brokers, industry and consumer bodies – the ACCC said that most interested parties raised no or limited concerns with the transaction.
The ACCC pointed to the fact that many financial institutions outside of the big four have been heavily investing in their technology and service to improve the user experience.
ACCC Chair Rod Sims said: “Innovative fintechs play an increasingly critical role in the market, challenging the established banks, leading to more innovative and cheaper banking for consumers. We therefore examined the proposed acquisition, particularly closely, including extensive consultation with industry participants, given the important role of that innovation.
“Market feedback suggested that while 86 400 is innovative, particularly in reducing the time and effort in completing home loan applications, there are a number of other businesses with similar offerings or the ability to replicate them. These other competitors continue to bring a similar disruptive influence to the market.”
Australia’s competition regulator noted that the removal of 86 400 is unlikely to substantially lessen competition in the market. However, due to the fact that the big banks tend to accommodate each other rather than compete to win market share, any acquisition of a rival or potential rival needs to be closely monitored.
Summary thoughts about the NAB acquisition
I’m not sure how much this is going to change for NAB or its customers. At the time of the acquisition, the big four bank said that it would enable it to better attract and retain customers. It’s hard to measure how much of a difference this will make.
NAB and other big four banks could certainly do with improving their technology for customers, but it’s not like you can measure the benefit in profit terms. It’s necessary though.
The NAB share price has grown a lot of the past year, as well as the last six months. I’m not sure how much more it can go in the near term.
