Australia's Competition Regulator Blocks NAB’s Bid Worth $3.7 billion
The blocking of the National Australia Bank's $3.7 billion bid for AXA APH by the Competition and Consumer Commission has left the four banking pillars of the nation awe-struck.
The Chairman of the Australian Competition and Consumer Commission argued that it has undertaken the blocking of the bid only on the basis of the worth of the deal and not in view of controlling the dominance of the four banking giants NAB, Westpac, Australia & New Zealand Banking Group and Commonwealth Bank of Australia, in the economy.
However, the decision has been a rude shock for the four banks hindering their growth ventures.
These banks account for 82% of all the loans available in Australia, and 83% of the deposits made. This allows the banks to dominate on standards of service and lead to high lending rates.
According to a Frontier Economics report, the bid would have had negative effects on the growth in the banking sector, overall.
"A NAB acquisition would harm competition compared with an acquisition by AMP because it would lessen competition in the activity of wealth management", quoted the report.